Viewpoint: A shot in the arm for generics producers

There is nowhere to hide from the Falsified Medicines Directive. It impacts generics producers in the same way as any other drug manufacturer or re-packager selling into Europe. With just under 48 months to go before the deadline, which is likely to be mid-2018, the clock is ticking for all producers to get their house in order.

The subject was hot on the agenda at the European Generics Association (EGA) meeting in Madrid earlier this month. As generics manufacturers often supply products with much lower margins than patented drug producers, their budgets are restricted when it comes to new investment - which is why many of them have been holding out until the last minute to find the ‘best-fit’ solution for their businesses.

Many of the existing generics manufacturers have full order books and there are relatively few with spare capacity. It means there is precious little time to shut lines down for upgrades or improvements, placing huge strains on already scarce resources.

This has now placed enormous time pressures to comply with the new rules. The legislation - designed to reduce drug counterfeits - has similar restrictions in other territories around the world. It means manufacturers will not be able to sell their products unless they comply with strict serialisation rules and, in many cases, a complete restructuring of their existing manufacturing lines.

Generics producers have the upper hand over ethical manufacturers in other respects; they have the knowledge and capacity to make their lines work harder and smarter. Short-run, quick turnaround production is the ‘ace up the sleeve’ for many generics producers. But adding serialisation elements potentially slows production as it adds more hoops and hurdles into the production process. 

For context, one company we work with said producing 300 units per minute was comfortable, 400 to 450 achievable but not fully robust, and 500 per minute and beyond extremely challenging. For many in the generics sector, this may prove uncomfortable reading.

But not is all doom and gloom. If, as a generics manufacturer, you get it right and get your production lines working in good time, then you are ahead of the game. A few manufacturers will get caught out and fail to meet the deadlines in time - in which case there is business to be made.

The trick is to not be the one to be caught unprepared. Ultimately, serialisation will force generics manufacturers to become even more competitive. As well as increased OEE, inventory losses, returns, recalls and chargeback processes will be handled more smoothly. Crucially, all-round visibility of the supply chain will be within reach, leaving you to substantially improve your outlook and profitability in the future.