The Falsified Medicines Directive (FMD): What should wholesalers and Logistics Partners consider?

By Christian Taylor, Serialisation Business Consultant, Zetes
The Falsified Medicines Directive (FMD) 2011/62/EU will come into full force on the 9th February 2019. With approximately 1% of medicines sold in dev...

The Falsified Medicines Directive (FMD) 2011/62/EU will come into full force on the 9th February 2019. With approximately 1% of medicines sold in developed markets being counterfeit, the global counterfeit drug market is worth US$200bn a year. The legislation aims to prevent counterfeit or unauthorised prescription medicine entering the legal supply chain, providing greater protection for patients.

With less than a year to go until the regulation comes into force, wholesalers and logistics providers know they need to do something now to become compliant. But, some may not know exactly what that looks like in practice.

Christian Taylor, Serialisation Business Consultant, Zetes takes a look at some of the key challenges and practical questions relating to achieving compliance.

What do the requirements mean for different parts of the supply chain?

At the beginning of the supply chain, the pharmaceutical manufacturer has responsibility for serialising cartons, sealing the product and then uploading the unique identifiers to the European Hub, known as the European Medicines Verification System (EMVS).

At the end, the dispensing pharmacist must be able to scan, verify for authenticity and decommission that product against a national hub, known as the National Medicines Verification System (NMVS). If the pack matches the information in the repository, the pack is decommissioned and dispensed to the patient.  Alternatively, if there is a warning related to the pack, the package will not be dispensed to the patient and an investigation will be made to see if the medicine is falsified.

This leaves the middle of the supply chain, where there is also a requirement for wholesalers and logistics providers to implement a ‘risk based’ approach to verification and decommissioning of product passing through their operation. In some cases, they will also need to decommission product.

To achieve compliance by February 2019, wholesalers will need to implement a system that enables verification, decommissioning or recommissioning of packages, linking with the respective country’s national hub.

What’s involved from a practical sense?

In simple terms wholesalers and logistics partners need three components:

1. The ability to scan 2D data matrix barcodes, either using mobile hand held devices, desktop scanners or automated imaging technology.

2. A software application that enables the pack, once scanned, to be verified instantaneously against data held on the National Medicines Verification System (NMVS), managed by the local National Medicines Verification Organisation (NMVO). In some cases, such as for ‘Article 23’ organisations wholesalers will also need the software to decommission or recommission product.

Decommissioning could also be required where the product is being exported out of the EU, or where damage is incurred. For example, if a forklift driver accidentally drives into a pallet and breaks the tamper proof seals on a product, it can no longer be sold and would need to be decommissioned immediately.

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3. The ability to capture and record all events associated with verification and decommissioning for a period of up to 10 years.

The immediate priority for wholesalers must be to comply in the most cost-effective and efficient way possible. For some, there could also be additional business value that comes with being compliant. The ability to manage a serialised warehouse brings greater track and trace capabilities and further safeguards businesses and patients alike.

Can an organisation achieve compliance without overhauling legacy systems?

In short, the answer is yes. There is a concern that in order to introduce FMD compliance into the warehouse, a costly ‘rip and replace’ approach is required. This doesn’t have to be the case. For reduced complexity, speed and cost effectiveness, businesses should look to partner with organisations that can provide a single source solution – warehouse process and technology integration expertise, a data/event visibility platform and seamless connection with a national medicines verification system.

Expertise of integrating with existing WMS or ERP systems is highly advisable. This can provide significantly reduced implementation times (crucial with such tight deadlines) at a much lower cost.

Can a wholesaler communicate with the European Medicines Verification Organisation (EMVO)?

No, Market Authorisation Holders (MAH) are the only organisations that are able to communicate directly with the European Hub (EMVO). However, wholesalers will not only need to have the capability to handle the product but also the ability to send data to and connect to their respective country’s national hub (NMVO) or potentially multiple national hubs if importing.

Any information that is reported by an MAH to the European hub will be sent directly to the relevant national hubs, which can then be accessed by wholesalers, parallel distributors and pharmacists.

The important thing for organisations to consider at this time is that currently, no one is handling the data of individual products on the line. In order to be compliant and report to the national hubs, wholesalers and logistics partners are going to have to review current processes and ensure they can handle data for any single packet within their warehouse.

What about Article 23?

Article 23 is yet to be fully defined, it will cover any prescription medicine destined for non-healthcare institutions e.g. schools, prisons, dentists etc. Ultimately, those organisations wouldn’t have the authority to log into the national hub to decommission a product. Wholesalers delivering to these places will hold the responsibility of verifying and decommissioning prior to delivery.

Beyond compliance; future proofing supply chains

Ultimately, serialisation can be seen as the entry level for track and trace, enabling businesses to capture all of their supply chain events. The ability to capture and store data this way – creating complete real-time visibility and greater traceability will unlock efficiencies throughout the entire supply chain.  It is very likely that legislation will progress in the coming years. It can already be seen in other countries that have undergone serialisation, which have now moved on to track and trace. Behind this legislation, there are distinct efficiency and quality advantages to be found.

The complexity of the pharmaceutical supply chain cannot be disputed, but if organisations embrace these regulatory changes – using them as an opportunity to optimise their supply chains, update data flows and break down silos – they can create true business value, making it pay to be compliant.

There’s no denying that the benefits of the FMD regulation far outweigh any of the complexities. If wholesalers and logistics partners use this opportunity to improve capability within the warehouse, they will open up the ability to build comprehensive and agile visibility infrastructures. This will not only ensure compliance by the 9th February 2019, but these infrastructures can be built upon further, putting wholesalers in a better position to react to any further regulation changes with ease.


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