Big Loophole in New EU Serialization Proposal

The European Commission released its “pharmaceutical package” yesterday. As I mentioned in Monday’s post, a strict ban on repackaging of parallel traded drugs was not included in the final proposal. However, the Third Legislative Proposal, which deals with counterfeit drugs, proposes “security devices” with traceability for pharmaceuticals. Yup, that means serialization (actually, serialisation), but nothing like the Californian vision of serialized e-pedigree that’s due to take effect in only 2,212 days.

The Financial Times emphasized the anti-counterfeit nature of the proposal in European Drugs To Carry Barcodes, but I see some significant concessions to parallel traders in the proposed legislation. The proposal puts some limits on the extent of repackaging but seems to contain a major loophole (described below) that could negate any benefits from serialization.

Three links for your reading pleasure:

• Pharmaceutical Package (main page)
• Press release (with a statement from Vice President Günter Verheugen)
• Text of Third Legislative Proposal

Be forewarned – the proposal is written in the international language of “bureaucratese” and perhaps should be read only by true fans of supply chain security. Here are a few items for your consideration:

A serialized track-and-trace foundation. Product must have “safety features making it possible to ascertain identification, authenticity and traceability of medicinal products.” In other words, the proposal lays the groundwork for a full track-and-trace system, but does not require it.

On-package security will grow. These safety features must allow wholesale distributors and pharmacists to: “(a) verify authenticity by assessing overt, covert, or forensic devices; (b) identify individual packs; (c) verify whether the outer packaging has been tampered with.” Note that point (b) also supports serialization.

Multiple serial numbers? The proposal states that the safety features can not be removed or covered-up. However, there is an exception (loophole?) that allows the repackager to remain compliant even when "replacing the safety feature with a safety feature that is equivalent as regards the possibility to ascertain identification, authenticity and uninterrupted traceability of the medicinal product" Replacing?!?

The last point sure makes it sound like the manufacturer’s original serial number could be covered up by a repackager’s number. Presumably, there would have to be some sort of mapping between the two numbers. In practice, I wonder if replacement could end up negating the benefits of serialization by creating multiple sets of numbers on packages from the same production lot.

Nonetheless, I suspect that most pharmaceutical manufacturers in Europe will take the first step and ramp up serialization efforts in anticipation of this proposal being formally adopted. Keep in mind that all proposals still need to be approved by the member countries.

As always, just my €0.02.

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P.S. Check out the latest Health Wonk Review at the e-CareManagement blog.