Why Drug Traceability is Something to Watch, and why Traceability can Reduce Risk for all Businesses

Traceability in Healthcare

Traceability in healthcare is a growing concern, and so, in fact, is traceability in all industries.

Order a package online, and you’ll get a tracking number.

Handy, right? It’s nice to know when something is going to arrive – and in case it goes missing, it gives you peace of mind to know where it is right now.

But this doesn’t just apply to your Amazon deliveries.

We’re talking about traceability – and it goes much, much further than goods simply being collected from a warehouse and delivered to your door. 

 

What is Traceability?

A useful definition of traceability is the ability to identify, track and trace elements of a product or substance as it moves along the supply chain from raw goods to finished products.

As a process, traceability is a system which can connect gaps in the supply chain, allowing the tracking of activities, products and information from end to end.

In other words – where is the product right now? Who made it? Who handled it?

And what were the reasons or circumstances for each transfer?

 

Why is Traceability Important?

Traceability is important because it gives you real time insight into where your products are. This gives much better control up and down the supply chain, ensuring a business has agility when it needs it – if it needs to recall products quickly, or track products, or issue replacement parts.

This in turn provides a range of benefits to a business:

  • Makes regulatory compliance easier to implement and to demonstrate in audits, therefore reducing the exposure to regulatory risk
  • Better stock control in terms of reducing wastage, managing expired stock, and improving profitability
  • Preventing counterfeit goods from entering the market
  • More efficient supply chain
  • Better for your brand in terms of building trust with customers and suppliers.

When it comes to product recalls, they don’t just endanger lives. They can ruin a business’s reputation and potentially the entire business too.

When traceability and product recalls are an issue, it can be very high profile. Just think back to the ‘Horsemeat scandal’ in 2013, and Samsung’s battery fires in 2016.

 

So let’s look at some stats on traceability.

In the UK, product recalls soared by 48% in 2018, covering sectors such as food, pharmaceuticals and consumer durables. Allergen mislabeling had increased by 62% from 2015 to 2016.

According to Qualio, data from McKinsey reveals that a major product recall causes an average 10% drop in share price for medical device manufacturers. And it’s not just business valuations that are risk.  Over the last decade, issues with medical device quality have caused 83,000 patient deaths.

Over the period 2016 to 2017, 409.5 million medical device units were recalled, averaging 58.19 million units per quarter. Going into 2019, that recall figure jumped up by more than 70% – a staggering 99.33 million units recalled per quarter.

According to Radiology Business, the top two reasons for medical device recalls were software issues and mislabeling. 

More recently, Perrigo Company plc quarantined and recalled all unexpired stock of specific batches of Ranitidine in 2019 – a medicine commonly used to treat heartburn and stomach ulcers. Often branded as Zantac, this product was available over the counter and by prescription, but was found to have possible contamination with NDMA, identified as a risk factor in the development of some cancers, hence the need for the recall.   

Now as we watch manufacturers from a range of sectors spring into action to produce ventilators to meet the needs of governments and healthcare worldwide in the COVID-19 crisis, traceability is again a critical consideration.

Clearly, being able to swiftly manufacture products as well as implement a product recall if needed is essential for patient safety.

 

Are there other benefits to traceability in healthcare?

Aside from patient safety, counterfeiting is a huge issue in the healthcare industry. It is estimated that counterfeit pharmaceutical drugs cause the deaths of over 250,000 children a year.

Clear and comprehensive systems for tracking products from the point of manufacture to the point of use goes a long way towards preventing fake pharmaceutical products and devices from entering the market place.

As we said earlier, it also streamlines business by enabling better inventory management, waste disposal processes, supply chain management and eProcurement.

It also facilitates better regulatory compliance – not just within your own country, but also across borders.

 

Is international traceability a legal requirement for my business?

While in some industries traceability is not a legal requirement, there are strict requirements for traceability in food and feed businesses, and in healthcare. Increasingly, regulations must address cross border transactions and distribution.

In the US, pharmacy or drug traceability is regulated under the Drug Supply Chain Security Act, which creates a track-and-trace system for reporting the chain of custody for pharmaceutical drugs distributed in the US.

In Europe, the Falsified Medicines Directive (Directive 2011/62/EU as amended) performs a similar function.

The Medical Devices Regulations 2002 also implement a number of European Directives on medical devices, not just pharmaceutical drugs. (For example: Directive 90/385/EEC on active implantable medical devices, Directive 93/42/EEC on medical devices and Directive 98/79/EC on in vitro diagnostic medical devices (IVDs), as amended.)

With so many different regulations and directives, as well as individual countries with their own jurisdictions and systems, it is hard work – especially for small businesses – to remain compliant.

The labelling, paperwork and reporting requirements can be onerous and expensive to comply with.

 

A Single Streamlined System to Revolutionise Healthcare

This is precisely the driver behind the GS1 standards. GS1 seeks to harmonise different worldwide regulatory requirements to make compliance more accessible and more streamlined.

Using the GS1 barcode and unique identification (UDI) System, you can trust that your products can be tracked, traced and deployed around the world. This is an essential element of traceability in healthcare.

 

What is GS1?

GS1 is an international organisation which develops and maintains standards for business communication.  It has existed for a long time in the retail industry, and now as it relates to healthcare, GS1 are a series of intentional standards which create a traceable, trackable system from product manufacture through to patient treatment.

It is a simple, transparent system based on barcoding standards which minimise errors in delivering healthcare. The system also helps prevent counterfeit products and facilitates regulatory compliance. 

Through data sharing and cross border cooperation, this standardised system:

  • improves patient safety
  • provides supply chain security
  • prevents counterfeit products entering the market
  • effectively manages product recalls
  • ensures regulatory compliance, and
  • speed up logistics in transportation and distribution, saving time and money.

In healthcare, traceability is critically important and is often a legal requirement. There are also reasons for implementing it outside of the healthcare industry. Indeed, we are seeing the growing use of GS1 both inside and outside healthcare.

That’s all down to the trust it gives your customers and your suppliers in you as a business.

It gives supply chain security. It increases accountability, efficiency, productivity, profitability, enhances regulatory compliance, as well as providing more robust risk management. And it even boosts staff morale.

 

The Challenges Posed by Traceability

Implementing a solid traceability system is not without challenge however.

Developing or dovetailing systems can make them weak, vulnerable and cumbersome.

The logistics of creating and tracking a compliant unique identification system for all the markets in which you operate can be a real headache for any business, but particularly for SMEs.

Data capture, storage and communication, such as the GDPR, is a growing concern.

Implementation across borders remains a challenge when you are operating internationally, as is incomplete or inconsistent implementation, as many chains of custody do not drill down as far as the product’s serial number. 

And of course, the costs and the efforts involved in set up can be substantial.

What are the Solutions to Creating Full Traceability?

At KMsoft, we believe that not implementing traceability in your business, particularly in healthcare, puts your customers and patients at an unacceptable risk across the board.

Not having thorough traceability leaves you wide open to risk and to criticism, not to mention arduous investigation and audits by competent authorities. If your system for traceability is not fully transparent, comprehensive and clear, it may not stand up to a rigorous audit.

That’s why we developed StockAssist.

Initially, we were shocked to see how much wastage a normal business tolerates. Each year thousands of pounds worth of stock gets thrown away because items have passed their expiry date while sitting in storage areas.

StockAssist helps with this by monitoring expiry dates and providing accurate cost and stock reporting.

As we grew and as GS1 continued to expand, we saw the range of benefits that traceability can confer on a business.

StockAssist, our labelling and inventory management solution, is fully compliant with GS1.

It provides end to end traceability, giving you and your customers not just peace of mind about your supply chain, but also full regulatory compliance.

Better stock management and supply chain security enables you to create a much more robust and efficient business model.

As more and more businesses and sectors are moving towards GS1 standards, it is becoming increasingly important to able to demonstrate traceability, in healthcare and beyond.

Our objective is to improve stock management and increase both efficiency and profitability for our clients. Using a GS1 compliant system such as StockAssist is a sure way that you can future proof your business.

More robust, resilient, safer and streamlined businesses can all start with a straightforward scan.

 

Click here to find out more about StockAssist.