Serialization in the Pharma Industry: Battling Counterfeiting and Ensuring Safety

Serialization is the process of uniquely identifying each Stock Keeping Unit (SKU). If you inspect any FMCG product, you'll likely find a barcode on its smallest packaging, ensuring its traceability throughout the supply chain. This same principle, when applied to pharmaceuticals, is crucial in combating a pervasive issue: counterfeiting.

The Importance of Serialization in the Indian Pharma Industry

Have you ever noticed a barcode, QR code, or serial number on the packaging of your medicines? If not, you might be surprised to learn that serialization is a mandatory practice for pharmaceutical exports from India. As of 2021, India's domestic pharmaceutical market was valued at approximately $42 billion, with projections to reach $65 billion by 2024. India also supplies 25% of the global demand for generic drugs (India Brand Equity Foundation, 2021). To ensure the integrity and authenticity of these medicines, Indian regulations mandate serialization at all packaging levels—primary, secondary, and tertiary.

• Primary Packaging: Each strip or individual SKU

• Secondary Packaging: Boxes containing multiple packs of medicines

• Tertiary Packaging: Larger containers for bulk B2B shipments

Serialization and Counterfeiting

In this section, we focus on serialization at the primary packaging level. Counterfeiting poses a significant threat to the Indian pharmaceutical industry, impacting public health and causing potential revenue losses for pharma companies. Serialization can mitigate this issue by including various elements in the unique identifier:

• GTIN (Global Trade Identification Number)

• Serial Number

• Expiry Date

• Lot/Batch Number

Combining these elements creates a unique identifier for each primary pack, allowing for precise tracking and tracing through the digital supply chain. However, implementing serialization is complex and capital-intensive, involving substantial setup and compliance costs. With over 3,000 pharma companies and 10,500 manufacturers in India, ensuring uniform compliance remains a significant challenge.

The Economic Impact of Counterfeiting

Counterfeiting causes severe economic damage, particularly through returns and reverse logistics. Pharma returns account for approximately 1% to 3% of total sales, translating to around $400 million . The reverse logistics chain is especially vulnerable to counterfeiting. Counterfeit manufacturers replicate packaging and use heat printing to mimic expiry dates and batch numbers of original products. This deceptive practice allows them to reintroduce expired products into the supply chain, making it difficult for pharma companies to distinguish between genuine and fake products.

Addressing the Challenges with Technology

Despite these challenges, advancements in technology offer promising solutions. Implementing blockchain and enhancing traceability through digitized supply chains can significantly improve the efficacy of serialization. Integrated systems that track serialized products can help ensure that each medicine's journey from manufacturer to consumer is transparent and secure. Serialization in Pharma to battle Counterfeiting is a must.

Serialization stands as a critical defense against counterfeiting in the pharmaceutical industry. While the journey to full compliance and technological integration is fraught with challenges, the potential benefits for public health and economic stability are immense. By embracing advanced technologies and robust traceability systems, the pharma industry can protect consumers and uphold the integrity of its products, ensuring that every pill and potion reaches its destination safely and securely.