The Top Three International Regulatory Compliance Challenges

The challenge of complying with supply chain regulations is now greater than ever. Legislators around the world have responded to the risks posed to healthcare supply chains with new requirements. The upshot is that healthcare manufacturers and distributors must contend with a global patchwork of more stringent rules. These legislative efforts are now starting to take effect. In this paper, we look at three pieces of supply chain legislation and how they are affecting compliance.

EU GDP: In Europe, safety feature deadline looms

The European Union is in the middle of a rolling overhaul of its supply chain rules. Revised regulations detailing the need for a quality system, clear definitions of outsourced activities and other elements came into force in 2013. The document represented a major revision of good distribution practices (GDP) in the EU, but fell short of being the last word on the matter.

Enforcement of the regulations’ requirement to record batch numbers — combinations of numbers and letters that identify each batch of a medicine — is tied to another directive on safety features. These elements are applied to the outer packaging of medicines to help secure the supply chain by providing verifiability of authenticity. The EU signaled its intent to publish a document on the topic when it passed the Falsified Medicines Directive in 2011, but the industry had to wait until 2016 to learn what it meant for healthcare supply chains.

Now, companies have until February 9, 2019 to add unique identifiers and anti-tampering devices to their products. The unique identifier is an alphanumerical code enabling the authentication of each pack of medicine. This must be a 2D barcode containing an ISO-compliant product code, expiry date, serial number and batch number. The anti-tampering device shows whether someone has opened a pack. Manufacturers are themselves responsible for selecting the most appropriate anti-tampering device.  

U.S. DSCSA: staggered rollout continues

A similar rolling implementation of supply chain security measures is underway in the United States. President Obama formally began the process in 2013 by signing the Drug Quality and Security Act, which includes the Drug Supply Chain Security Act (DSCSA), into law. That triggered a 10-year phased introduction of systems to ensure drug authenticity, identify illegitimate products and enhance the recall process.

DSCSA is already affecting pharmaceutical manufacturers. Since the start of 2015, FDA has required manufacturers to capture lot-level transaction information, establish systems to quarantine suspect products and confirm their supply chain partners are authorized. FDA has published guidance and hosted webinars to help companies understand and meet their responsibilities.

This is just the start. By FDA’s timeline, six aspects of implementing DSCSA were complete as of the start of 2016. The regulator is yet to detail the data exchange standards, system attributes and drug distribution security measures that will facilitate the electronic tracing of products at the package level. Guidance on these topics is expected in 2021 and 2022.     

Brazil SNCM: An uncertain future

Brazil has spent more than a decade working on medicine traceability and, until recently, was due to start enforcing serialization requirements from the end of 2016. Officials abandoned that deadline and the National Drug Control System (SNCM) legislation behind it in stages throughout 2015 and 2016, but retained a strong interest in establishing a track-and-trace system.

A reworked version of SNCM advanced through the legislative process in Brazil throughout 2016. In September, lawmakers approved new timelines. The agreement gives Brazilian regulator ANVISA four months to write guidelines, after which participants in a one-year pilot project will trial the traceability system using three or more lots of medicines. Officials will then review the pilot project before starting a three-year countdown to full implementation.

The revised timeline means it will be at least five years before Brazil mandates serialization. If Brazil meets that timeline, its traceability system will come into force sometime between the EU GDP and U.S. DSCSA deadlines. What the rules mean for drug manufacturers will only start to become clear when ANVISA releases its guidelines. At that point, companies will need to be ready to digest the requirements and prepare to adapt their operations accordingly.

Remaining compliant, remaining competitive

Legislation in the EU, U.S. and Brazil has already intensified the challenge of complying with supply chain regulations. This task will become harder still as the phased implementation of requirements continues. High volumes of legislation and regulations are in the pipeline. Manufacturers must keep pace to avoid falling foul of the changes, according to Mark Quinlan, director of healthcare strategy at UPS. “It’s important that manufacturers understand the rules in their various markets so that they can remain compliant, and continue to compete in those markets,” he said. “If you can’t get your products across the border, you may rapidly lose market share, customer preference, or even physician preference.”

Faced with this growing workload, manufacturers are assessing whether to expand their regulatory intelligence activities or leverage the existing capabilities of specialist supply chain vendors or competent third party logistics providers with specialist knowledge in this area, such as UPS The regulatory intelligence generated by either approach will be vital if pharmaceutical manufacturers are to ensure the smooth running of their operations and avoid reputation-damaging missteps.

UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. UPS is committed to operating more sustainably – for customers, the environment and the communities we serve around the world.  Learn more about our efforts at ups.com/sustainability. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. The company can be found on the web at ups.com® and its corporate blog can be found at longitudes.ups.com. To get UPS news direct, visit pressroom.ups.com/RSS or follow @UPS_News on Twitter.

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