The European Falsified Medicines Directive (FMD)
The European Union Falsified Medicine Directive for Italy & Greece
To fight counterfeit medication, the European Union (EU) adopted the Falsified Medicine Directive (FMD), effective as of February 9th, 2019. The directive, referred to as 2016/161/EU, has been in place for quite some time since first being published on February 9th, 2016. Now, we will focus on the two outlying countries that use their own systems and have not implemented FMD: Italy and Greece. These countries are still navigating their compliance journey until 2025. To make this transition, Italy must move from pre-existing labels, like Bollino, to GS1 standards, and Greece must move existing label infrastructure and processes to the FMD Unique Identifier (UI) to properly manage data migration for shared packs.
Overall, the regulation details safety features that the remaining healthcare supply chain stakeholders need to implement by the looming deadline. It aims at improving public health and protecting patients from being affected by fake medicines and outlines the critical steps to build a safe system to trace the prescription drugs distributed in Europe where 32 countries are affected (Figure 1). The intended result of this legislation is to have a safer healthcare supply chain with enhanced patient safety and improved insights into supply chain operations. The EU FMD requires stakeholders of the healthcare supply chain to put a series of systems in place to comply with the directive. This complex legislation requires the healthcare industry to change processes and Information Technology (IT) systems, but fortunately, there are solutions on the market that will simplify this journey for healthcare stakeholders.
The EU FMD is complex and requires a lot of process & IT changes.
Facilitating Communication Amongst EU Members
To increase patient safety, the EU has implemented several systems to facilitate communication across Europe:
- The European Medicine Verification System (EMVS)
- The National Medicine Verification System (NMVS)
The systems aim at increasing patient safety by tracing prescription medicines across borders and across the supply chain. Depending on the type of supply chain stakeholder, they will have to communicate with one of these systems. Through verification of the UI or serial numbers and by connecting to these EU systems, the different contributors within the supply chain can make sure that the goods passing through their facilities are not counterfeit, stolen, recalled or expired.
What Does Serialization Mean for the Pharmaceutical Industry?
Safeguarding the manufacture and delivery of medicines has always been a key priority for the pharmaceutical industry, but changes are afoot to enshrine this responsibility in law. Is your business ready to meet impending regulations?
The pharma industry is characterized by highly complex supply chains between manufacturers and end consumers. Over-the-counter drugs are produced, distributed, repackaged and sold by a series of entities before reaching the patient, introducing the potential for criminal activity.
Globally, pharma companies lose around $75 billion every year to counterfeit, gray market and stolen product. Counterfeit drugs pose patient safety risks including contamination, containing the wrong ingredients, containing no active ingredients or containing the right active ingredient but at the wrong dose. Other illegal schemes include social reimbursement fraud, meaning false claims are submitted to insurers or programs such as Medicare for financial gain, with the latter hitting governments and taxpayers in the pocket.
Navigating the Evolving Regulatory Landscape
Serialization aims to combat these illicit activities by tracking & tracing the passage of prescription drugs through the supply chain from manufacturing to dispensing, typically through automated, electronic means. Serialization is already a legal requirement in several countries, such as Turkey, Brazil, South Korea and China (Figure 2), but in this white paper, we will focus on the impact of two major pan-regional regulations currently impacting two countries: Italy & Greece.
In Europe, the EU Falsified Medicines Directive (FMD) came into force on February 9, 2019 and impacts manufacturers, wholesalers, distributors and pharmacists. The legislation requires all parties to be able to verify the authenticity of a medicinal product, identify individual packs and determine whether the outer packaging has been tampered with. The FMD mandates the use of a tamper-proof security seal and a 2D barcode, serialized with a unique, randomized number.
Establishing a Standard to Mitigate Complexity
As pharmaceutical supply chains are complex and global by nature, the industry is looking to standardize on a common identification system. GS1 is a globally recognized and endorsed standard that is based on a foundation of unique identification keys (Global Trade Item Number). It enables product attributes to be recorded, including batch or lot number, expiration date and unique serial number, and is visualized as a GS1 DataMatrix 2D barcode, which enables a substantial amount of data to be encoded in a small physical space.
The EU FMD is also an opportunity to achieve substantial operational gains.
With the EU FMD compliance regulation looming large, businesses can't afford to focus myopically on putting a barcode on a bottle or a box. The challenge of item-level serialization extends beyond the confines of the packaging hall and implementing serialization across the enterprise will involve both digital disruption and business transformation. However, it's also an opportunity to achieve substantial operational gains such as combating ineffective product recalls and returns, increasing supply chain efficiency and visibility and providing a data foundation for analytical tools to predict individual patient behavior and drive innovation.
Understanding the Five Pharmaceutical Supply Chain Stakeholders
The pharmaceutical supply chain is complex in nature, but in essence, there are five clear stakeholders whom, under legislation, have to share data to support serial number authentication and traceability. The impacts of the legislation were discussed in the previous section 'What Does Serialization Mean for the Pharmaceutical industry?' This next portion reviews the key stakeholders from a European Union perspective and how they are connected together to support serial number authentication and traceability.
Manufacturers
Serialization will require manufacturers to redesign their labels to accommodate the new 2D barcode (see Appendix). Changes in labeling may also involve alterations to or redesign of packaging structure or graphic elements. This will likely have an impact on multiple packaging processes which will need to be resolved either through increased manpower or greater automation for current production levels to be maintained.
Manufacturers' IT architecture will need to be capable of generating, storing, capturing and transmitting millions of serial numbers for numerous supply chains. That will inevitably entail significant capital investment to update exiting equipment, hardware and software and retrain staff.
The EU FMD details how central data repositories will be set up, either at national or supranational level and connected to a European Hub - a non-profit organization funded by manufacturers and brand owners. The legislation requires unique identifiers (i.e. serial numbers) to be uploaded to the European Hub, with verification of medicines performed in the National Medicines Verification Systems (NMVS). To that end, system interoperability, data ownership and access have been agreed on by stakeholders based on mutually endorsed principles (Figure 3).
Wholesalers and Distributors
The obligations of wholesalers and distributors are broadly similar to those of manufacturers: to secure the supply chain and verify any suspicion of falsified medicines. Primary wholesalers who buy from the original manufacturer or Marketing Authorization Holder (MAH) will not need to do risk-based verification as the product is coming from a trusted source. Secondary wholesalers who buy product off the market or from other wholesalers need to complete risk-based verification. Those that sell 'out of market', such as to universities for research, must decommission serial numbers. Distributors must complete risk-based verification for saleable returns prior to reselling the product, regardless of product source (Figure 4).
Pharmacies
This diverse group encompasses community pharmacies, dispensing clinical practices, hospital pharmacies and internet pharmacies. Pharmacists will be responsible for making their connections to the database, as well as for software upgrades.
Community pharmacists need to scan the barcode to verify products at the point of dispensing to the patient. This will also alert the pharmacist in real-time if the product is out of date, recalled or withdrawn from the supply chain.
Hospital pharmacies do not deliver directly to the patient. Instead, they deliver to departments or doctors with many medicines administered in a hospital environment from stock held in clinical areas, such as wards, theatres, accident and emergency departments and intensive care units. It is not always possible to identify which packs of medicines are destined for dispensing directly to patients and which will go to clinical areas in advance. In practice, it may prove impractical to scan twice - on receipt and at the point of dispensing. Hospital pharmacies need to authenticate and decommission medicines before dispensing them or in certain cases, recommission them.
Online pharmacies allow consumers to buy an assortment of medication through e-commerce sites. While many are reputable, others have been a major contributor to the drug counterfeiting trade. In all cases of drug counterfeiting, the product, packaging and label information are designed to look like the original product.
The EU introduced a common logo (Directive 2011/62/EU) for online pharmacies and retailers in EU countries to vouch for the authenticity of the website and guarantee product safety. The logo was adopted through the implementation of Regulation 699/2014 which came into effect from July 1, 2015 (Figure 5). While matrix barcodes for tracking and tracing are not fool-proof, electronic track and trace can help motivated consumers verify the safety of drugs bought online, and regulators can better understand where and how frequently products leave the distribution chain.
Patients
Ultimately, the purpose of both the EU FMD and the U.S. Drug Supply Chain Security Act (DSCSA) is to improve patient safety by securing the supply chain. By ensuring compliance, medications will be authenticated, properly traced and safe for consumption. We can expect to see the emergence of consumer apps linked to the validation system that will enable mobile scanning of the 2D barcode, enabling patients to verify drug safety themselves for extra assurance, ultimately reducing the risk of harm.
Trading with Europe
The main global pharma-producing nations such as USA, Brazil, China, South Korea, Russia and India have implemented or are in the process of implementing mass serialization programs to combat the growing counterfeit industry. These countries operate under their own standards (for instance, the USA uses a national drug number), but there is a movement toward the implementation of GS1 global standards as products continue being produced in and exported from the USA to the European Union. In this case, products need to conform to the GS1 2D barcode format with product serial numbers uploaded to the European hub and national system of the importing country.
The Landscape of Alert Management
Alert management is the process of handling and responding to alerts produced from falsified medicines identified within the supply chain system. Based on the FMD, the National Medicines Verification Organization (NMVO) requires the monitoring of these incoming alerts to ensure action is taken to resolve counterfeiting issues. If alerts are not addressed in a timely and effective manner, not only does this cause potential risks for patient safety, but this could also create legal compliance issues, loss of trust within the market and reputation damage across organizations.
The Appendix
Why Does the Pharma Industry Use GS1 DataMatrix 2D Barcodes on Their Packaging?
The healthcare industry is facing market forces such as drug counterfeiting placing global public health at risk, social reimbursement fraud, ineffective product recalls and supply chain inefficiencies. As a result of country-based initiatives, such as the U.S. DSCSA and the EU FMD, being overseen by healthcare regulators, manufacturers and supply chain partners look toward having a global standardized identification system from manufacturers to patients, which will support product traceability and combat drug counterfeiting. These legislative mandates have introduced the concept of mass serialization where the end selling packaging unit is uniquely serialized based on a random number.
Pharmaceutical supply chains are complex and global in nature. While trading internationally to support product traceability (track and trace), the pharma industry is attempting to implement standards using a common identification system like GS1.
Country vs. International
USA-based manufacturers using a combination of the National Drug Code (NDC) and a serial number must meet DSCSA guidelines, which is perfect while trading domestically, but if the product is exported to the EU, then the NDC is not a recognized protocol. The FDA does not enforce the use of the NDC number, leaving manufacturers to make their own decision. Given this, many have adopted the international product identification standard: GS1 and the Global Trade Item Number (GTIN).
Why GS1?
The GS1 system is a globally recognized and endorsed standard by the healthcare supply chain, as well as other regulated industries such as food and beverage, and is widely used. Based on a foundation of unique identification keys, the Global Trade Item Number and product attributes such a batch or lot number, expiry date or unique serial number, is uniquely suited to meet the needs of the healthcare industry.
What is a GS1 DataMatrix 2D Barcode?
GS1 DataMatrix is the preferred two-dimensional (2D) matrix bar code symbology that efficiently meets all of the needs of the pharmaceutical and medical device industry by:
- The encoding and marking of large amounts of data within a small space
- Enabling direct part marking
- Providing error detection and correction capabilities
- Allowing the printing of variable information at high production rates
The format of the GS1 DataMatrix is a series of data encoded black and white modules arranged in a compact square pattern, which can store up to 2,335 alphanumeric characters based upon a pre-determined module, grid size and mathematical formula. It is legible in an omnidirectional manner (360-degree orientation) and contains the following data:
- Global Trade Item Number (GTIN) - 14 digits
- Expiry Date - 6 digits (YYMMDD)
- Batch / lot Number - up to 20 alpha-numeric characters
- Unique Serial Number (randomized) - up to 20 alpha-numeric characters
What About QR Codes?
GS1 2D barcodes come in two formats GS1 DataMatrix vs QR Codes. They are both similar containing the necessary data required of the industry, but a QR Code can hold more data such as a website URL to view product information or a video used for marketing purposes. With the invention of smartphones and constant desire to enrich the customer experience, more and more pharma enterprises are adding QR Codes to packaging materials.
Where Are They Used?
Depending on the legislation of the country, the frequency of serial number verification will differ. To close loops between the manufacturer, European Medicines Verification System and the patient within the EU, the GS1 DataMatrix is scanned at the pharmacy to verify if the serial number of the product being sold and dispensed to the patient is an authenticate serial number.
About Engineering Industries eXcellence
As regulations for serialization and demands for product traceability grow in size and scope, so will the value of integrated technologies for tracking and tracing. The strong technical expertise, profound industry knowledge and successful delivery record of our Track & Trace specialists makes Engineering Industries eXcellence a power player in the arena of serialized manufacturing and logistics.
Within the Engineering Industries eXcellence technology portfolio for Digital Supply Chain and Industry 4.0, Movilitas.Cloud is our proprietary Software-as-a-Service track and trace solution that makes serialization and compliance simple and efficient. As a long-standing member of HDA and the Open Credentialing Initiative (OCI), we continuously strive to fulfill our mission of helping companies meet the demands of today's dynamic economy.
