Last year, Brazil joined the ranks of those countries looking at adopting serialisation of medicinal packs to allow them to be tracked through the supply chain with an ambitious proposal which anticipates the system coming into operation in January 2011.
This focus article looks at the main elements of Brazil's proposals, examines some of the unanswered questions about the implementation plan and gauges how ready the pharmaceutical industry is to meet the deadline.
With 191 million inhabitants, Brazil is the biggest pharmaceutical market in South America, valued at around $17bn in 2008, and is the tenth largest drug market in the world. The market has been experiencing buoyant growth despite difficulties affecting the economy as a whole, but this has been accompanied by an increase in medicines counterfeiting.
Last year, the national regulatory agency - ANVISA - implemented a series of healthcare reforms to shore up patient safety as well as to encourage domestic production of pharmaceuticals.
The Brazilian legislation (Act No. 11.903) was first put forward in January 2009 and set out an aggressive three-year timetable towards a full serialisation and track-and-trace system for prescription medicines, both human and veterinary, via the "capture, storage and electronic transmission" of data.
In November 2009, additional details on the proposed tracking system were disclosed. It will cover the whole pharmaceutical supply chain from producer to end-user, with each transaction in the chain recorded, i.e. manufacturing, importation, distribution, transportation, storing and dispensing of medicine.
The coding system will use a 2D datamatrix carrier- known as a Medicine Single Identifier - which will be unique to each medicine pack and linked to a databank that will detail the product's ANVISA registration number, lot number, manufacturing date, expiry date, the tax payer numbers of the companies remitting and receiving the product and the transaction date.
It will be the medicine manufacturer’s responsibility to apply safety tags containing the 2D datamatrix code "to each medicine unit to be marketed within the Brazilian territory," says the legislation.
In January 2010, additional details were released by ANVISA on the safety labels, including that the 2D barcodes will be printed onto labels by the national mint and it may also be possible for manufacturers to purchase unprinted labels and print the codes themselves. The mint will also install and supply readers for authentication in each pharmacy and licensed drug store.
The latest communications from ANVISA also indicate that the serialisation codes will be compliant with the standards set out by the GS1 organisation and are similar to the sequential Bollini codes introduced in Italy in 2005.
ANVISA is seeking a phased roll-out for the serialisation programme. From 1 June 2010, the tamper-evident label is scheduled to be applied to all drugs in Brazil, and by 1 January 2011 these labels should be serialised with the 2D datamatrix.
The agency will allow a year for non-serialised product in warehouses and pharmacy shelves - manufactured ahead of the 1 January 2011 deadline - to be used up. Then by 1 January 2012 it will be imperative that all drugs in Brazil carry the serialised label.
The intention is to have full traceability from manufacturer to dispenser by the third year of implementation.Still several grey areas
The big unanswered question for pharmaceutical manufacturers at the moment is whether they will be able to source serialisation codes from the Brazilian authorities and apply them to products made outside the country.
Greg Cathcart, chief executive of IT consultancy Excellis Corp, told SecuringPharma.com
that this uncertainty is discouraging drugmakers from pressing ahead with the investment in serialisation technology needed to meet Brazil's requirements.
Excellis has several clients which have begun preparations, including one which is implementing a packaging line for a new product they are launching in the country in 2011, which will support item-level serialisation from launch.
This investment is being made with an element of risk, however, because if Brazil insists that labels are applied within the country, drugmakers will be forced to apply a 'slap and ship' policy, in which product has the security label and serial number affixed on entry into the market.
This approach is already used by a number of companies serving the pharmaceutical market in Turkey, which is also in the midst of implementing a serialisation programme for medicines. Logistics providers, notably DHL, have set up operations in Turkey specifically to handle this type of activity.
"For Turkey, where relatively low volumes of product are concerned, that can be a sensible solution," said Cathcart. But for a market the size of Brazil - one of the fast-growing BRIC (Brazil, Russia, India, China) emerging pharma markets - "it does not give a good return on investment."
There is also some debate about whether additional safety features - initially in ANVISA's proposals - will in fact make it through to the final scheme.
At a meeting hosted by GS1 in Brazil last month, ETCO - a non-governmental organisation hired by ANVISA to run a pilot study for serialisation in 2009 - insisted that serialisation was sufficient to maintain the security of Brazil's medicine supply chain.
Andre Franco Montoro Filho, president of ETCO, told the meeting that any additional safety device is unnecessary, "as it adds to the cost and can be easily forged."
Montoro Filho also cited a McKinsey Corp study which found that about 25 per cent of the medicines circulating in the Brazilian market are counterfeit or otherwise illegal and outside of the legitimate supply chain.
Meanwhile, another company that has clients striving to meet the deadline is Germany's Seidenader GmbH, which says it is currently building machines for a number of clients that are destined for implementation within Brazil by the end of the second quarter of 2010.
Terry Crawford, a product manager at Seidenader's Track and Trace division, believes that there are some concerns about the amount of information that will have to be incorporated into the 2D datamatrix, which could have a knock-on effect on its size and the speed at which it can be printed.
Crawford, whose company also presented a serilisation pilot to ANVISA last year in partnership with local drugmaker Ache and Bayer Technology Services, echoed the concerns about the ability to preprint codes ahead of shipping to Brazil, and also said some questions remain about the database that will be used to store and track the data generated in the system.
"At the moment it's not clear if this will be a government database, as is the case in Turkey, or a commercial system from the likes of Axway, SupplyScape or rfXcel, as is envisaged in the California's electronic pedigree model," said Crawford.Inventory loading?
There are also concerns that the phased deadline for implementation could create its own problems as manufacturers load inventory in Brazil in 2010 ahead of the serialisation deadline, according to Cathcart.
That surplus could present opportunities for parallel traders and eventually even lead to shortages in certain medicines, with counterfeiters potentially taking the opportunity to meet the demand caused by the shortfall, he said.
The commentators polled by SecuringPharma.com
are pessimistic that Brazil will meet the deadline, mainly because the remaining grey areas have led to hesitancy among drugmakers to invest in the packaging line upgrades needed to meet the criteria.
That said, there was an optimism that the initial uncertainties with the system will be ironed out and that Brazil would see a significant benefit in greater visibility in the pharmaceutical supply chain and an accompanying enhancement in patient safety.
The average estimate for full implementation of serialisation in Brazil was three to four years, with a lot of companies importing medicines into Brazil initially adopting a 'slap and ship' approach, with a gradual shift, if possible, to serialisation at the point of production.Related articles:FDA publishes final guidance on serialisationUK pilot shows serialisation and authentication in harmonyPharmacists respond favourably to EFPIA's serialisation pilotTurkish serialisation project misses yet another deadlineGS1 updates on serialisation model for US drug market