Adapting packaging lines, implementing a new anti-tampering system, a 2D data matrix with a unique serial number, software adjustments, efficiency loss because of slowed production, and costs related to data exchange between European and national data banks. These terms probably sound dreadfully familiar to those involved in serialization.
Falsified medicines can easily be confused with their authentic counterparts but may contain ingredients of bad or toxic quality, or in the wrong dosage; posing a very real risk to patients. This threat to global health is answered by a comprehensive strategy both at a European and international level in the form of serialization. The EU Directive: 2011/62/EU aka Falsified Medicines Directive (FMD) is intended to prevent the entry into the legal supply chain of falsified medicinal products; thus creating a safer environment for patients.
The basic set-up is the following:
The scheme below gives a broad overview of how the system is designed.
Obviously, nothing is free and to no one’s surprise, the current hot topic is the price of medicines, which is bound to rise. The European Commission has already carried out an impact analysis in 2015 (Ecorys) to determine the effect of FMD on the price of drugs. They estimated a rise of up to 3 euro cents per packaging in general (so no differentiation between innovative drugs or generics etc.)
Other reports show significantly differing numbers like a report from
As for the manufacturing companies that will be affected, the organization ‘Medicines for Europe’ has estimated that updating packaging and production lines will cost the average company 5 million with an additional 2 million annually for running and maintenance costs. According to their calculations serialization will cost the entire pharma industry 5 billion to update packaging and production lines and also 90 million the implement the EMVS accompanied with an equal amount annually to keep it up and running.
These additional costs that companies will be facing can vary to a great extent as they depend on factors like:
Also, depending on total revenue, the number of products, and their presentations, FMD costs will vary per manufacturer. Especially for companies with relatively low volumes and/or low margins in a relatively small medicines market, costs will be ‘higher’ due to the vigorous investments (which have no guarantee of any possible payback). For instance, this will put a lot of pressure on generics and small scale companies, which may consequently choose to discontinue certain products or worse.
The intended result of increased patient safety will be paired with significant costs in any case and may even be too much to handle for some of the smaller companies. But how much exactly? Based on our experience we’ve come up with a calculation tool which should give you some insight into the ballpark figure to help you prepare.
So, now you may have a ballpark figure, but what’s next? Preparing a business case, funding and actually getting started are the logical next steps. It might be helpful to consider using Lean Six Sigma as a methodology, this approach offers various tools that are well-suited for projects like these. And though compliance with the FMD is the primary objective you may very well be able to
Feel free to contact us to find out how or any other questions you might have.
Blog by: Nick Veringmeier