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Serialization to entail big spending for Hungary’s pharmas

Hungary’s pharmaceutical industry, similarly to other European markets, will soon be facing “tremendous investment pressure” due to serialization becoming mandatory across all EU countries in 2019, according to a press statement sent to the Budapest Business Journal by serialization automation supplier Servicepoint Oy.

Pharmaceutical serialization is the tracking and tracing of the passage of prescription drugs through the supply chain from manufacturing to dispensing. Finlandʼs Servicepoint, the leading serialization automation supplier in the Nordic countries, believes immediate action is required in order to make sure that the production of pharmaceuticals can continue without interruption. 

The company notes that the spread of fake pharmaceuticals is a globally significant and escalating problem, as the fake drug market cuts into the business of pharmaceutical companies and can cause tragic results for people who use illicit medication. 

For instance, the company recalls, last summer Interpol’s Operation Pangea IX - an international joint operation targeting illicit online sale of medicines and medical devices involving police, customs and health regulatory authorities from 103 countries - announced that police in Hungary had seized some 65,000 anxiety medication tablets hidden in the back seat of a car and inside the spare wheel, using the same modus operandi often used to smuggle narcotics, while an underground laboratory producing fake medication and steroids was discovered in Austria.

“In the future, the requirement for serialization and authentication can apply to any product. As an example, children’s food packages and car parts may need to be serialized. This is to prevent toxic foodstuffs and forged parts from entering the markets and prevent abuse of such substances,” according to Iiro Jantunen, CTO of Servicepoint. 

Once the serialization requirement is in place, pharmaceutical companies will need to mark the packages they produce with a traceable 2D barcode, Servicepoint explains. Wholesalers and distributors then record the codes in their systems for the purpose of ensuring authenticity and investigating any possible drug thefts, the company adds. The pharmacies and hospitals at the end of the distribution chain check the origin of the drugs they sell based on the barcode. In future, consumers will also be able to check the authenticity of a product with their smartphone cameras.

Drug production might become risky

From the perspective of pharmaceutical factories, the implementation of serialization is an unavoidable added expense. A substantial portion of the costs will come from installing new technology in packaging lines, Servicepoint predicts. Some production lines will need to be fully remodeled and automated, while the EU is urging measures to protect the integrity of pharmaceutical packages by means of gluing or taping them shut.

“Too many pharmaceutical factories have delayed their decisions on the necessary investments. Soon, everyone will be rushing to meet the requirements at the same time and only those who had the sense to begin their serialization projects in good time will make the cut. The concern is genuine as there are a limited number of equipment manufacturers and automation integrators like Servicepoint in Europe. Delivery times are getting longer and longer,” according to Jantunen.

“In the worst-case scenario, this will mean that pharmaceutical companies will not have the time to implement the changes in their packaging lines fast enough, forcing them to turn to third-party providers of industrial packaging services. The production of some pharmaceuticals may even stop temporarily in Europe,” the professional added.