Bio/Pharmaceutical Serialization Requirements May Drive Sponsors to Re-examine Their CMO Use

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Bio/pharmaceutical serialization will soon be a reality around the world, and the effort to comply with the complexity involved with compliance is likely to create winners and losers in the Contract Manufacturing Organization (CMO) industry.

Serialization, sometimes known as track-and-trace, refers to systems—usually country-specific—used to track the passage of bio/pharmaceutical products through the supply chain to dispensing at the hospital or pharmacy level. Generally speaking, regulations require that each product package be labeled with a unique identifier or serial number, as well as other information such as batch numbers, lot numbers, origin/country registration code and expiration date. Specific requirements for presenting these data vary from country to country. In some cases, the shipping carton will require a bar code as well aggregating information on the individual packages contain in it.

The manner in which serialization is implemented has the potential to be very disruptive. Smaller CMOs may not be able to afford the cost of implementing serialization while those bio/pharma companies that are willing to front some of the costs to their contract manufacturing organizations may decide to concentrate their investment in just a few packagers. The result is likely to be that many smaller CMOs will find themselves out of the packaging business and potentially forced out of business altogether.

Graham Clark, CMO/CPO partnership manager at TraceLink, a company that provides cloud-based software for pharmaceutical track-and-trace operations, estimates that the largest global bio/pharma companies have 30-60% of their products packaged externally; the top 20 pharma companies may work with as many as 100 CMOs. The demands of serialization regulatory requirements may drive some of these companies to rationalize their CMOs more, he said. For instance, some CMOs may be supplying a single product, and pharma companies may consider replacing those CMOs with others that are able to manufacture or package more of their products in order to leverage the serialization investment.

“They may move workload around if a current CMO can’t meet the requirements, if they leave it too late and miss deadlines,” he said. “It is an opportunity for CMOs, but it’s also a risk.”

When developing their strategies, CMOs need to consider serialization as it fits in with overall operations. That means considering the operational impact on any existing processes and integration of serialization strategies with site-level systems.

This is also the time for bio/pharmaceutical contract manufacturers to look at their existing operations or potential early upgrades that will allow them to offer value-added services, such as serial number management or government reporting, Clark suggested.

This article is reprinted from the April 2015 issue of Bio/Pharmaceutical Outsourcing Report. To learn more, click here.

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Jim Miller is the founder and president of PharmSource Information Services, Inc. A preeminent expert in bio/pharmaceutical outsourcing, Jim established and presides over the industry’s principal resource for serious consumers of information on contract drug development and manufacturing, PharmSource STRATEGIC ADVANTAGE. He is editor and publisher of Bio/Pharmaceutical Outsourcing Report and Emerging Markets Outsourcing Report.

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