Pharma Serialization: Managing the TransformationBy making the right investments in the right technology with the right business partner, the pharmaceuticals ecosystem can alleviate and hopefully eliminate the threat of counterfeit drugs to patient safety and wellness.

Executive SummaryThe global pharmaceuticals industry faces problems of counterfeiting, theft, diversion and false returns to manufacturers. The World Health Organization (WHO) estimates counterfeit drugs are approximately 1% of the supply in developed countries and 30% to 40% in developing coun-tries. Though the 1% figure seems small, it consists of millions of prescriptions in the U.S. alone.

Pharmaceuticals companies and governments of countries worldwide believe that counterfeiting by organized crime can be reduced significantly by implementing product serialization. Serializa-tion requires a comprehensive system to track and trace the passage of prescription drugs through the entire supply chain. Every product should be identified by a unique serial number in addition to the origin, shelf life and batch number. This will allow the product’s lifecycle to be traced from production, through distribution and finally to dispensation to patients at the drugstore or hospital.

Serialization needs careful assessment, diligent planning and swift implementation. This white paper offers pharmaceuticals companies critical

information on leveraging global best practices when implementing serialization. It covers:

• The need for serialization.

• Key challenges for implementation.

• An implementation maturity model.

• Our approach to serialization.

Serialization regulations are in place today in Turkey, India, China, Brazil, Argentina and South Korea; regulations are pending in the U.S., Canada and the EU. Each nation, however, follows its own guidelines/legislation — e.g., California’s e-pedigree law, U.S. FDA’s serialization guidelines, Turkey’s serialization guidelines, China’s SFDA serialization requirements, etc. — to curb counterfeiting and thus ensure patient safety. Despite differences in the countries’ laws, each nation’s regulations tend to be built around GS1 standards1 and are sufficiently similar. This means pharmaceuticals companies, generally, can develop one program that meets all global requirements. Although the GS1 format is the favored standard, International Organization for Standardization (ISO), Internet Engineering Task Force (IETF) and other compet-ing standards also apply to serialization.

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Why Serialization? Serialization is fast becoming a necessity for the pharmaceuticals industry (see Figure 2) as a result of the following factors:

• A highly complex distribution network from manufacturer to consumer in which products change hands as many as 10 times.

• The authentication of the product at various levels in the supply chain becomes very difficult without data sharing across the supply chain.

• Current business processes are very labor-intensive and, as a result, the price paid by the consumer for pharmaceuticals products is high.

• The high price of prescription drugs and the relative ease of duplication and diversion make them a prime target for counterfeiters.

• Current and pending regulatory requirements mandate that manufacturers deploy track and trace tools for product movement as well as utilize authentication tools to retain their com-petitiveness.

Serialization could result in economic benefits, as well as improved brand protection and consumer confidence in their medications.2

What Drives Serialization?

Serialization is not just about generating unique serial numbers for any saleable units, but also maintaning those identifications to provide visibility and full traceability within the supply chain. It requires collaborative action from partners throughout the supply chain for accurate recording, tracking and managing of data as the product moves from manufacturer to distributor to the dispensing point.

Serialization: Implementation Challenges

Managing and administering serialization is a complex process that leads to additional cost if not managed properly. Key operational challenges include:

• Creation of unique serialization codes for individual products during the production process.

Hierarchy of Benefits

Brand Protection

Patient Safety

Regulatory and Legislative

Supply Chain Synergies and Efficiencies

Anticounterfeiting Supply Chain

Figure 1

Product Mix-upThe risk of the wrong product being put into distribution.

CounterfeitingManufacturing of inferior copies of a genuine “branded” product labeled with the original brand name.

Gray MarketingUnauthorized distribution of branded products.

Pharmaceuticals Impact• Loss in revenue.• Loss in profit.• Loss in brand equity.• Potential lawsuits.

Figure 2

Factors Necessitating Product Serialization

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• High-speed printing and verification of the codes generated.

> Production rates up to 500 units per min-ute, as well as dust- and vibration-prone packaging lines makes printing and verifi-cation challenging.

• Cross-site coordination for serial generation for similar product lines.

• Integration with enterprise systems.

• Optimum utilization of existing technologies/machineries.

The packaging line must be revalidated as equipment is added to generate each bar code. Each code must be linked to product data and applied to packages to enable tracking throughout the supply chain. And, last:

• Change management: Employees must be trained to handle the new equipment.

Moreover, serialization demands that voluminous data repositories are shared at all nodes of the pharmaceuticals supply chain. High data volumes, accuracy, security and data reliability all add to the challenges of implementing serialization.

Serialization: Our ViewWe see product serialization as one of the top priority activities for pharmaceuticals and medical devices companies, as mandated by regulatory agencies.

The serialization system is expected to perform the following higher-level workflows:

• Organizing and managing serial numbers for the entire system.

• Ensuring number uniqueness and randomness via integrated algorithms.

• Assigning the numbers to a batch.

• Passing serial numbers on to the serialization line system (SLS) for further processing.

• Maximizing the use of serialization assets that are required by most geographies.

• Ensuring that all serialization systems use common capabilities: product identifica-tion equipment (PIE), product identification middleware management systems (PIMMS) and electronic product code information systems (EPCIS). All of these must be designed to meet global standards and service all markets (“design once, use many”).

Our serialization solution addresses the challenges at the shop floor and plant levels, and connects to the enterprise level. Our solution deploys units of unique identification (“serializa-tion”) and creates associated unit-level electronic records that can be easily accessed via the Web or smart phones in real time. Simple and ubiquitous access to product IDs (or UIDs) and related data provide a previously unavailable level of visibility into the production, distribution and use of

Identify Use Apply

Solutions

Strategy

Share Manage

Ways of Working

2D Data Matrix Few Operating Models from a Single IT& Data Model

Pack Data 2D Scanner

PatientPharmacyWholesalerRe-PackerDistributorFactory

Serialize Pack

Parent>Child Association

Data Flow

Material Flow

Common Equipment Solution

Common Global Standards

GS1 Identification Keys

GS1 ECC200 Data Matrix

Barcode

Marchesini & SEA Vision Information

System

GS1-Compliant Application

GTIN: 12345678901234Ser No. 123AFDG789TRExp: 220912Batch: 103 F

Figure 3

Serialization Underpinnings

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products or their components throughout the supply chain (see Figure 4).

Our Methodology and OfferingsWe advocate that pharmaceuticals companies undertake an in-depth analysis of the current scenario and consider multi-phase implementa-tion of serialization (see Figure 5), which entails the following steps:

• Evaluating current systems and processes for product serialization, by considering multiple factors such as functionality, technical elements, interfacing and cost.

• Facilitating discussions on the future state “to be” for serialization and gathering high-level requirements.

Figure 4

Carton Labeling and Association Process Flow

EPCIS

Electronic ProductCode Information Systems

Ente

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Product IdentificationMiddleware Management System

Batch E-codes for Product

Text files per Pack Level

Print and ApplyCarbon Code

Associate Cartonswith Batch

Cartoner Bundler Case Packer Palletizer

Associate Cartonswith Bundles

Associate Bundles with Shipper

Associate Shipperswith Pallet

Upload XML Files to Stock

E-code Stock on SystemGeneration of Batch

E-codes for Product

ExternalAgencies

PIMMSManage Association

Files

Figure 5

Serialization Blueprinting: Approach and Deliverables

Our

Met

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Ser

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PhasesInformation Gathering

Process Mapping and Gap

Requirement Definition

Solution Blueprinting and Implementation

Roadmap

Act

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• Gather and review existing documenta-tion, work manuals.

• Interaction with stakeholders (various business functions and IT stakeholders together) in an envi-sioning workshop.

• Identify weaknesses of the current docu-mentation.

• Identify inputs and outputs of the processes.

• Select processes and packaging lines for in-depth study.

• Process and systems walk-through.

• Interview/focus group meeting with key stake-holders.

• Identify current pain points and challenges.

• Capture process handoffs between people and systems.

• Identify process and technology opportuni-ties for improvements.

• Review the processes with process owners and look for redundant activities, unnecessary process steps, role ambiguity, bottlenecks, cycle time, etc.

• Detailed analysis to uncover data management func-tionality for packing, warehouse and distri-bution operations.

• Our SMEs develop a high level of require-ments for the future “to-be” in discussions with all stakeholders.

• Present final deliver-able and sign-off.

• In this phase, a solution architecture for serialization would be developed taking into consideration the various dimensions such as data management require-ments, packaging line considerations, line and product-specific variations.

• A global master blueprint template for product serialization is developed.

• Present final deliver-able and sign-offs.

Key

Out

puts

• Program overview.

• Workshop themes.

• Measures of success.

• Process maps.

• Gap analysis document.

• High-level require-ments.

• Individual creation/validation of as-is processes.

• High-level requirements/ to-be state.

• Interfacing requirements.

• High-level solution architecture/blueprint document.

• Project implementa-tion roadmap.

• Providing a high-level solution architecture, requirements documentation and roadmap for implementation (see Figure 6).

Implementation Maturity Model for Serialization

Figure 7 depicts a model that we believe will help in identifying an organization’s degree of maturity for a successful serialization implementation.

Conclusion Threats to the integrity of the drug supply are likely to intensify in coming years. According to Peter Pitts, director of the Center for Medicine in the Public Interest, global drug counterfeiting is growing at 12% to 16% a year, and, in 2010, generated as much as $75 billion in worldwide revenues. “It is shocking to realize that in some

Figure 6

Our Standard Framework

TBD

SAP OER/SAP BI

1

2

3

4

5

We have customized consulting, POC and implementation/post-implementation support offerings for serialization, ePedigree, track and trace, product recall and GS1 compliance requirements for pharma companies.

• Functionality is not a key differentiator — all vendors comply with the same international standard.

• All major pharmaceuticals companies are moving to the same SAP modules for their business process.

GS1-Compliant Application

GS1-Compliant Application

External Third-party, e.g., Tracelink , rfExcel

PIMMS-PIE, EPCIS-PIMMS,EPCIS-External (including pedigree)

SAP AIE/Other ERPs

Manage Manage

Serialization

Pedigree

System Interfaces

Mobile Operations

Reporting

SAP AIE 7.x

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Figure 7

Ascending Serialization’s Learning Curve

Level 1 Level 2 Level 3 Level 4 Level 5

PM

O a

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Gov

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Projects are managed at an individual level and the synergies are not exploited. Projects are managed as a discrete unit.

Projects are managed at a unit level with no centralized PMO. Slightly consolidated, no consideration for variations.

A centrally managed PMO with well-defined processes and solutions, from blueprinting to deployment across locations.

Central PMO with active management for site-specific variations and scope variations with clear communication plan and change management.

End-to-end PMO from blueprinting to global rollout with proactive planning, detailed change and risk management, best practices and continuous improvement included.

Con

figu

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Man

agem

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Basic solution configuration set-up that lacks flexibility and adaptation.

Configuration is repeatable, but needs detailed study and design modification to the code base.

Data and packaging line configurations are well-defined and designed with elements that can be assembled and realigned to quickly accommodate changing demands.

Data management and line-specific configurations are captured at the planning stage and global templates are in place.

Adaptable, flexible configurable serialization solution enabling support of wide variety of packaging line functions.

Rap

id

Dep

loym

ent Solution deployment

is planned for only the pilot line with no replicable code base.

Solution can be modified and installed in similar packaging lines, but not readily repeatable and the timelines are not predictable.

Deployment plan is well-defined with all common site and packaging-line-specific serialization variations with actionable timelines.

Deployment plans support multiple serialization and coding requirements with manageable timelines.

Global development playbook is in place and the solution is readily installable, replicable and easily upgradable across packaging lines and locations.

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parts of the world, somewhere between 30% and 50% of drugs to treat serious diseases are actually counterfeit,” said Food and Drug Admin-istration commissioner Margaret Hamburg, who added that the problem “is growing every day.”3 Meanwhile, Joe Ringwood, chief operating officer of Systech International, noted: “Phar-maceutical counterfeiting is a global problem that is growing rapidly.”4 As a result, serialization has the potential to be a very efficient tool for pharmaceuticals leaders in the fight against counterfeiting.

Managing the transformation is a crucial and essential part of the overall serialization imple-mentation strategy. By choosing a reliable partner and developing a diligent implementation plan,

manufacturers can realize even greater benefits such as total supply chain visibility and reduced product recalls, over and above what is required by regulatory compliance.

Making the right investments in the right technology with the right business partner can only help the pharmaceuticals ecosystem — manufacturers, wholesalers, distributors and pharmacies — alleviate and eventually eliminate the threat of counterfeited drugs to patient safety and wellness. Successful serialization will be a key differentiator and a clear competitive advantage for pharmaceuticals companies in the near term and over the long haul as drug counterfeiting is reduced to a distant memory.

Quick Take

We helped in implementing serialization for a leading global pharmaceutical major.

Scenario

• Client wanted to implement e-code serialization which uses common capabilities (PIE, PIMMS, EPCIS) and is designed to meet global standards and service all markets.

• A complete solution was required to address data management and packaging functions.

Our Role

• Ensuring client standards are met through engaging appropriate architecture, EIS and quality resources at the right time.

• Engaging with other teams to deliver project requirements.

• Managing and monitoring the change management plan.

• Managing IT risks and issues.

• Providing regular status reports to IT management.

Benefits Attained

• Track-and-trace products deployed from the point of packaging to the pharmacy.

• Reduced the risk of counterfeit products being dispensed.

• Expired products now detected automatically.

• Performs product recalls more effectively and efficiently.

• Delivers the right product to the right patient.

E-code Serialization for a Pharma Major

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Footnotes1 GS1 is the international standards group whose healthcare component is working on pharmaceuticals

product tagging standards. The GS1 system of standards is the most widely used supply-chain standards system in the world. It is composed of four key standards: barcodes (used to automatically identify items), eCom — electronic business messaging standards allowing automatic electronic transmission of data, global data synchronization standards (GDSN), which allow business partners to have consistent item data in their systems at the same time and EPCglobal which uses RFID technology for real-time item tracking. For more information: http://www.gs1.org/about/overview.

2 “Mass Serialization in the European Pharmaceuticals Market,” Frost & Sullivan, page 23. www.frost.com/prod/servlet/cio/140658996

3 http://drugstorenews.com/article/counterfeit-threat-intensifies

4 http://www.contractpharma.com/issues/2012-03/view_features/packaging-serialization-update/

References

• World Health Organization, “Medicines: Counterfeit Medicines,” Fact sheet No. 275 (January 2010), available at www.who.int/mediacentre/factsheets/fs275/en.

• Pharmaceuticals and Packaging News (PMP News), “Combating Counterfeits,” Sept. 9, 2011, available at http://www.pmpnews.com/article/combating-counterfeits.

• Center of Medicines in the Public Interest, “Counterfeit Drugs and China NEW,” available at http://www.cmpi.org/in-the-news/testimony/counterfeit-drugs-and-china-new.

• Pharmaceuticals and Packaging News (PMP News), “Best Practices in Serialization,” June 18, 2009, available at http://www.pmpnews.com/article/best-practices-serialization.

• GS1 Healthcare Reference book 2011/2012: http://www.gs1.org/docs/healthcare/GS1_Healthcare_Reference_Book_2011-2012.pdf.

• Life Science leader “The Long Road to Serialization and Track and Trace,” March 27, 2012, http://www.lifescienceleader.com/magazine/current-issue-3/item/4083-long-road-to-usserialization-Track-and-trace.

• Life Science Leader “Planning Serialization for Pharmaceuticals Manufacturer”: http://www.lifescienceleader.com/magazine/current-issue-3/item/4124-planning-serializationfor-Pharmaceuticals-manufacturers.

• EFPIA “Coding and Identification of Products: Towards Safer Medicines Supply”: http://www.efpia.eu/Content/Default.asp?PageID=566

Other Useful Links

• http://www.bluespherehealth.com/wordpress/?p=236

• http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2888553

• http://www.healthcarepackaging.com/archives/2012/02/fda_changes_to_drug_bar_code_r.php

• http://www.bluespherehealth.com/wordpress/?tag=serialization

• http://www.bluespherehealth.com/wordpress/?p=845

About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 150,400 employees as of September 30, 2012, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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About the AuthorsAravindhan Ramakrishnan is a Senior Consultant within Cognizant Business Consulting. He has extensive experience across life sciences, energy and consumer goods industries. As an operations and technology expert Aravindhan has been working with clients to help them transform their businesses. He focuses on strategy development and implementation, technology strategy, organization design, operational excellence and innovation management. Prior to Cognizant, Aravindhan was employed by IBM’s Strategy & Transformation Practice and by Honeywell. He holds a bachelor’s degree in engineering and an M.B.A. Aravindhan can be reached at Aravindhan.Ramakrishnan@cognizant.com.

Ghazala Yasmin is a Consultant within Cognizant Business Consulting. She has over one year of experience in management consulting and business development, and has supported projects across various industries: life sciences, chemicals and consumer goods. She holds a bachelor’s degree in chemical engi-neering and an M.B.A. from NITIE, Mumbai. Ghazala can be reached at Ghazala.Yasmin@cognizant.com.