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CMO Serialization Compliance: A Phased Framework


To avoid supply-chain disruptions due to product serialization, pharmaceuticals companies should closely collaborate with contract manufacturing organizations to jointly implement compliance solutions.

Pharmaceuticals companies are moving quickly to meet fast-approaching serialization compliance deadlines, with approximately 90% of prescribed medications worldwide expected to be serialized by 2020. This requires that they coordinate efforts with contract manufacturing organizations (CMOs), which have, over time, become an important component in the pharma manufacturing ecosystem. In fact, CMOs are expected to generate $79.24 billion in revenue by 2019. Given this codependency, pharmaceuticals companies need to collaborate closely with their CMO partners on serialization to avoid compliance-related supply chain disruptions.

Pharma companies are in various stages of implementing serialization across their supply chain to meet emerging regulatory mandates. As regulations across the globe are still evolving, a standard approach to serialization with well-established ways of working is still in progress. Our experience with CMO serialization has shown that pharma organizations need a structured, proactive and strategic approach covering all phases of program implementation to ensure successful CMO collaboration.

The following four-phase framework is structured, sequential and logical to ensure successful CMO serialization collaboration. The framework’s execution approach has four distinct phases covering the CMO serialization journey, geared toward two primary objectives: ensuring product supply (no supply disruptions) and regulatory compliance (see Figure 1).

Figure 1

Phase 1: CMO Serialization Strategy

The first and arguably most important phase is understanding the overall impact of CMO serialization and devising a strategy that enables a pharma company to successfully collaborate with CMOs. And a first step in grasping the effect of CMO serialization is to know how many products and CMOs are impacted. Most pharma companies have relationships with numerous sizeable CMOs.  Understanding which CMOs will be impacted by serialization will help to determine the overall scope of the CMO serialization initiative.

We also urge companies to undertake a risk assessment exercise at this stage. Serialization by itself introduces significant risks concerning good manufacturing practice and good distribution practice (GxP) related to IT solutions and business processes. According to U.S. Federal Drug Administration (FDA) guidance, each party performing manufacturing tasks is responsible for ensuring compliance with current good manufacturing practice (CGMP) related to those activities.

Key outputs of this phase:

  • An understanding of overall CMO scope.

  • Supply strategy for serialized products manufactured by CMOs.

  • Broad CMO serialization solution options and business processes.

  • GxP risks and mitigations related to CMO serialization.

  • Commercial considerations and negotiation strategy.

Phase 2: CMO Engagement and Implementation Planning

Once an organization has readied its CMO strategy, it must next engage CMOs and jointly prepare individual implementation plans. To select key focus areas, it is helpful to construct a three-dimensional matrix covering timelines for regulatory mandates, product portfolios in particular markets and contributed revenues. To greatly facilitate such activities in this phase, we recommend using the existing organizational channels (teams) that manage and monitor CMO relationships.

Key outputs of this phase:

  • A well-defined CMO engagement approach.

  • Documented IT and artwork requirements.

  • Jointly-agreed-upon implementation plan.

  • A draft of commercial and supply agreements covering serialization activities.

Phase 3: Solution Design

This phase establishes common understanding and leads to finalization of both technical aspects and business process aspects of the CMO serialization solution. As a first step, pharma companies and their CMO partners need to clearly scope out serialization activities and each entity’s associated responsibilities. For example, the question of which party generates serial numbers is a top concern for CMOs and pharma companies.

Companies should give due consideration to the aggregation requirements and the capabilities of the CMO to provide aggregation data. Another key aspect requiring agreement concerns data standards, security and governance. As part of the solution design exercise, companies also need to evaluate or design current/future mechanisms of sharing data in a scalable manner to meet requirements in a serialized environment.

Key outputs of this phase:

  • Design of CMO serialization solution.

  • Clearly identified roles and responsibilities of the pharma company and CMO.

  • Evaluation of network integration solutions and a mechanism to securely exchange serialization data.

Phase 4: Program Execution

Integration projects across organizations are among the most intricate software missions. This is because they involve agreement and alignment between organizations that often have their own methodologies, applications landscape, data standards and governance practices, as well as IT or business constraints. All the tenets of strong program/project management are applicable to serialization.

Key outputs of this phase:

  • Overall execution/project plan.

  • Established governance structure and escalation mechanism.

  • Change management process to cope with the dynamic nature of serialization.

Next Moves

Pharmas must take a holistic view of the CMO serialization process and develop a strategy as a first step to ensure that the company and its CMO partners successfully scale up organizational capabilities to meet serialization challenges. We offer our OneSerial framework to accelerate and streamline your serialization road map, including collaboration with the supply chain.

Serialization is mandatory, not optional, so pharmas cannot wait until all the uncertainties surrounding regulations, technological solutions and supply constraints are sorted out. Moreover, delaying serialization poses a real risk of product disruptions in key revenue-generating markets and potential for financial setbacks.

To learn more, read “A Strategic Approach to CMO Serialization Compliance,” visit the Life Sciences section of the website, or contact us.

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