There is no denying that the EU-FMD is a complex piece of legislation, and it has taken some time to understand the full implications of the original Directive in 2011 and the related Delegated Regulations on Safety Features on 9th February 2016.
One such area is the question: what will be the impact on the various stakeholders? The assumption so far has been that the impact would be felt particularly by the pharmaceutical manufacturers and the pharmacists, but that other stakeholders would be getting off lightly by comparison.
A closer examination of the EU-FMD requirements shows, however, that there may in fact be a lot more to the EU-FMD requirements for wholesalers and distributors than a first glance reveals.
It is true that the EU-FMD does not require full end-to-end tracking of the medicines as they make their way through the distribution chain, i.e. it does not oblige wholesalers to systematically scan all shipments as they pass through their hands. But Article 20 of the DR clearly sets out scenarios where wholesalers will be obliged to verify the authenticity of the UI of the products in their ‘physical possession’ to ensure that the pack in question is not marked as blocked, dispensed, exported etc.
This applies to all returns and for all products not received directly from the manufacturer or the manufacturer’s official distributor. While this will only cover a limited share of the medicinal products flowing through the European supply chain, a quick calculation shows that the number of checks that must be carried out will not be insignificant.
It is worth taking a peek across the pond to compare notes with the situation in the United States. Here two of the three major distributors – McKesson and CardinalHealth – have recently written to all their pharma manufacturer trading partners. McKesson and CardinalHealth are required, under the terms of the DSCSA, to verify all the saleable returns in November 2019. McKesson calculate that even a small percentage of returned goods mean they will need to carry out 18 million verifications every year.
The conclusion is that this can, realistically and cost-effectively, only be achieved if their pharma manufacturer partners provide these distributors with the electronic data, including not only the item serial numbers, but also aggregated data up to shipment.
The message these distributors give to their pharma manufacturing partners is very clear: “Aggregation is necessary to efficiently provide serial numbers as part of Transaction Information and to easily move product through the supply chain. Cardinal Health expects that manufacturers will aggregate individual units up to the case level.”
So even though aggregation is an explicit US requirement only in the 2023 time-frame, major trading partners are issuing implicit requirements to establish aggregation and aggregated data exchange capability far earlier than the explicit legal requirement.
Given the comparable numbers of sales packs flowing through the European healthcare supply chain that fall under this risk-based verification requirement, it would be a fair assumption that manufacturers will start receiving ‘McKesson letters’ in the not too distant future that will ask them to seriously consider establishing the technical and process capabilities to supply their goods as well as the corresponding data in aggregated form.
In fact, the issue may become more urgent in Europe because of further requirements listed in Chapter V of the DR, where wholesalers would be required to scan the packs they manage systematically that extend beyond the returns use case. This includes exports from Europe (Article 22 and Article 23) that recognises the need to accommodate the rich variety of processes across Europe by allowing Member States to define additional points in their national supply chains when the verification of the safety features and the decommissioning can be delegated to wholesalers.
How the Member States will interpret this provision is not yet clear, but given the primary aim of the EU-FMD legislation – to protect patients by closing all loopholes through which counterfeit medicines might infiltrate the legal medicines supply chain – it would be a safe assumption that national authorities will want to maximise the powers granted to them by the European legislation.
Likewise, whilst we don’t yet know what the details of these interactions are, it is likely that this obligation on wholesalers will, in turn, extend to pharmaceutical manufacturers.
The conclusion is that the established view that European Requirements are item-level only is too narrow a view to take. True, the data reporting to the European Hub will be sales pack item UIs – as will the scan at the pharmacy – checking back against the connected National Systems.
In order to support the physical and logical flow through the European Medicines supply chain in a cost-effective way for all stakeholders, 3C Excellis Europe are therefore advising all customers to aim their systems and processes to be aggregation-ready from the start.
Our exclusive whitepaper containing vendor-independent advice is available to download today. In it we outline how you can meet the EU-FMD requirements in time and without affecting your current profitability.
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