As the Clock Ticks Down for Item-Level Serialization

October 19, 2018

By Robert Barton

The U.S. deadline for pharmaceutical manufacturers to implement item-level serialization as part of a global regulatory effort to stem product counterfeiting and diversion is less than a month away — a key step in a process designed to deliver a fully secured U.S. drug distribution system by the end of 2023.

“We are actually at the deadline for phase one,” said Steve Tallant, Director of Product Management and Marketing at Systech, whose technology provides supply chain security solutions to organizations around the world, including in the pharmaceuticals sector. “We were the first vendor to offer a productized serialization solution, so these deadlines are exciting.”

During this first phase, manufacturers need to ensure they are compliant with the requirements for implementing the equipment and processes needed to accommodate the serialized data and barcodes that have to be printed on packages. And while compliance is required, it can also be leveraged to provide additional business benefits, including things like increased supply chain visibility and data exchange, according to Tallant.

What the new system probably won’t do, however, is put a stop to drug counterfeiting that generates roughly $200 billion per year, according to Tallant. “Serialization is intended to solve counterfeiting, but it doesn’t necessarily do that,” he said, pointing out that counterfeited products use replicated barcodes that read the same and provide the same information as legitimate products. In addition, counterfeiters also have easy access to the same additive mechanisms, such as foils, seals and holograms as legitimate manufacturers. “In and of itself, serialization is not going to stop counterfeiting or the gray market. Those products can be fabricated, and they look legitimate, but there’s garbage in the box.”

However, manufacturers can take advantage of the time and expense invested in serialization to use those efforts to vastly improve product security, according to Tallant. Systech has identified miniscule variations in the printing of individual barcodes that allow it to derive a unique, individual digital e-Fingerprint to each barcode, creating an identifier that cannot be reverse engineered or duplicated.  A copied or fabricated serialized 2D barcode, even if it matches a “real” number, would never match the digitally derived e-Fingerprint of the authentic.

In addition, the company has figured out a way to combine its e-Fingerprint capabilities with Blockchain to create the industry’s only proven way of linking the all-digital Blockchain with the physical package of pharmaceuticals, according to Tallant. Blockchain — which allows for a trusted chain of possession incorporating security and immutability — can be applied to offer the industry a truly secure system for protecting and ensuring the legitimacy of its drug products. “With blockchain, you have a trusted, secure ledger,” Tallant said.

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