Item Level Serialization:
Getting Ready to Meet the California ePedigree Law
March 1, 2008; Updated May 20, 2008
Prepared by: Nosco, Inc.
Introduction:
Sometimes it feels like there may be more questions than answers regarding how
to comply with the California ePedigree law. The path to readiness is complex and can
be overwhelming to even the most enthusiastic advocate. As an industry, the
Pharmaceutical Market has both a challenge and an opportunity. The challenge is to
create Pedigrees and Mass Serialize all Rx Prescription Drugs. The opportunity is to
provide our country with a much stronger level of Patient Safety and our companies with
an improved Supply Chain, Brand Protection, and perhaps, at the end of the day, an ROI
on the time and money invested in the process.
One major challenge is delivering serialization at the item level. This paper will
provide serialization options and an overview of some of the key questions, which must
be faced along the journey to implementation.
Contents:
Page:
• California Requirements Summary……………………….…….………1
•
United States Congressional Legislation Update……………………….4
•
Nosco Introduction……………………………………...………………4
•
Item Level Serialization Options - Roadmap………………..……….…5
•
Top 10 Serialization FAQ’s……………………………….…….………7
•
Introduction to the California Express Solution……………………….. 15
•
Contact Information…………………………………………………..... 16
California Requirements Summary:
The California Board of Pharmacy delayed the implementation date of the
ePedigree Law to January 2011. Even so, wholesalers need serialized product by 2010,
which is not far away. When manufacturers begin to fully understand the scope of the
initiative within their own organizations, most wish they had started earlier and are
rapidly deploying pilot programs, or implementing directly on selected SKUs.
There are now at least 35 states with electronic pedigree (e-pedigree) legislation being
considered. Twenty-one of those states have actually passed laws requiring an e-pedigree.
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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California’s law is the most far-reaching, involving manufacturers explicitly and having a
January 2011 implementation deadline. The law can be summarized as follows:
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Requires an electronic pedigree whenever a change in ownership occurs from sale
by a drug manufacturer through to the pharmacy
Shall be created in an interoperable electronic system
Will track each Rx drug at the smallest package or the intermediate container
Must use a unique serial number for each item
Requires “certification” that the pedigree is true
The heart of the law requires that each container of prescription drug dispensed by a
pharmacy, hospital, or clinic be mass serialized with a unique ID for the purpose of
tracking and tracing each item. This will mean that the smallest unit of sale delivered to
the pharmacy will need to have a method for mass serialization deployed on the
packaging. The two most common methods for mass serialization are a 2D Data Matrix
code or an RFID tag. In addition to mass serialization, an ePedigree will be created which
the pharmaceutical supply chain will use to record and certify the chain of custody of
each Rx drug.
The next Board of Pharmacy Meeting will be held on June 24th and is open to the public.
Resources:
You can click on the comprehensive FAQ provided by the California Board of
Pharmacy for more detail: http://www.pharmacy.ca.gov/forms/pedigree_q_and_a.pdf
California Board of Pharmacy Home Page: http://www.pharmacy.ca.gov/index.shtml
California Board of Pharmacy Memo to the FDA, May 12th 2008
In early 2008, FDA began requesting comments on both technology and standards
in an attempt to provide industry a cohesive road map. A public memorandum entitled
“RESPONSE OF THE CALIFORNIA STATE BOARD OF PHARMACY
Technologies for Prescription Drug Identification, Validation, Track and Trace, or
Authentication; Request for Information” by William Powers, President, California State
Board of Pharmacy was issued May 12th, 2008. The Board appears to be supporting
RFID as the primary technology, and is looking to the GS1/EPCglobal organization to
complete their standards road map.
Comments on technology
Mr. Powers wrote, “We are unfamiliar with any encryption technology or
nanotechnology applicable to this task. Every industry participant, technology vendor, or
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
3
other source of information from whom we have heard over the last several years has
identified two possible technologies to be used in isolation or together for this task: 2-D
(Data Matrix) Barcodes, and RFID (EPC) tags.
Of the two, it is clear to the Board from all of the evidence that it has received that
RFID is a vastly superior technology for all of the purposes served by an electronic
pedigree/track and trace system, and should be the industry standard for data carriers. 2-D
Barcodes have utility as a temporary or interim solution, and as a back-up technology on
packaging in the event of a (rare) RFID tag failure. However, in the long term, 2-D
Barcodes should not be a primary technology, and should be used solely as a secondary
or back-up technology to the primary RFID tag(s).
This is particularly true for individual unit packaging, but the Board also believes
that the benefits of RFID technology are at least as demonstrable at the case or pallet
level.”
Comments on standards
Mr. Powers further writes, “It appears that all of the standards necessary to full
implementation of RFID technology in the pharmaceutical supply chain have already
been developed and implemented or are in the final stages of development and
implementation. The GS1/EPCglobal system/suite of standards is fully comprehensive,
including standardized identifiers, attributes, and data carriers.
With regard to RFID technology specifically, GS1/EPCglobal has ratified the
necessary data carrier and tag data standards. For example, GS1/EPCglobal has at least
seven standards in place that relate to RFID (EPC) tags and readers, perhaps most
prominent among these its EPC UHF Tag (Class 1 Gen 2) standard for “Gen 2” RFID
UHF tags. GS1/EPCglobal expects full ratification and approval of its EPC HF Tag
(Class 1 Gen 2) – for “Gen 2” RFID HF tags – at or before the end of calendar year 2008.
The comprehensive suite of standards agreed to under the aegis of GS1/EPCglobal has
permitted innumerable vendors to operate in this space, to supply a technology that is
open and standards-based, and therefore interoperable with other vendors.
The only obvious remaining piece with regard to RFID technology and/or
standards is the speculation about whether RFID technology or the fields generated
thereby might have an effect on the stability, potency, efficacy, etc. of biologics,
particularly large proteins. To date, all of the available data of which the Board is aware
suggests there is no such effect, and the Board has not been made aware of any studies or
data demonstrating any such effect. However, the FDA might wish to establish guidelines
or standards for such data collection, or for application to biologics if the FDA
determines that further testing is necessary to demonstrate this lack of effect.” Click to
view the memo: http://www.pharmacy.ca.gov/laws_regs/docket_0121_comments.pdf
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
4
United States Congressional Legislative Update
A new bill was introduced in the U.S. Congress in an attempt to establish a
National ePedigree Law. HR 5839, introduced mid-month as “Safeguarding America’s
Pharmaceuticals Act of 2008” by Reps. Buyer (R-IN) and Matheson (D-UT), would
compel FDA to enforce a national pedigree program starting six months after passage,
and then phase in mandatory serialization and tracking of pharmaceuticals by 2011, and
enforcement for all pharmaceuticals no later than 2013. Serialization techniques
mentioned include RFID, barcodes, nanotechnology or “other promising track and trace
technology,” to be used at the pallet, case, unit or tablet levels. Click to link to the bill:
http://www.govtrack.us/congress/billtext.xpd?bill=h110-5839
Timing of the bill follows the passage of the FDA Amendments Act of 2007,
requiring that instructs FDA to evaluate serialization systems and make recommendations
by March 2010, but goes a step farther by creating a deadline for actual regulations. It
also coordinates well with the California ePedigree Law delay to 2011. The bill is early in
introduction and must go through a lengthy process on its way to becoming law.
Nosco Introduction
Nosco is a leading producer of pharmaceutical printed packaging with a
collaborative problem solving promise. Printed packaging products include folding
cartons, packaging inserts/outserts, and labels. Nosco offers pre-serialized 2-D Data
Matrix codes with HP® Security Publishing Solution, and RFID-enabled printed
packaging with data certification produced under cGMP/QSR-based processes. Nosco
serves more than 300 pharmaceutical customers, and belongs to the California Express
Solution and has been a pharmaceutical printed packaging provider for more than 75
years, serving as a JIT Certified Supplier to several manufacturers.
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Item Level Serialization Options – What’s the Roadmap?
One challenge that producers face is defining serialization technology. Working with
several manufacturers, Nosco has defined two primary technologies: 2-D Data Matrix
serialized codes, available at the case and item level, and high-frequency (HF), ultra-highfrequency (UHF), and UHF near-field (NF) options at the case and item level, with proven
field read rates. Both technologies (2-D and RFID) can help the pharmaceutical industry
comply with mass serialization and ePedigree, but each has distinct differences.
The real difference comes down to line of sight and data storage. RFID reading
requires no line of sight. With the size of the pharmaceutical industry, this could be practical
at the wholesale level (or other levels for that matter) as a long-term solution. With the
RFID tag, you can add information as it moves through the supply chain. Security or
encryption-based technology can also protect the data on the tag. With respect to data
storage, the 2-D variable barcode is, in effect, static after the code is first created.
Information can’t be added once the code is created.
Still, 2-D codes can serialize biologic drug products until RFID can emerge as a
viable alternative, or as a way to begin. The advantage of the 2-D barcode is cost. The
implementation hardware and software costs may be slightly less than RFID, but even more
appealingly, the consumable can cost a good deal less. The RFID tag is more expensive than
printing variable 2-D Data Matrix codes.
Consider what will be mass serialized before choosing what to deploy. First,
EPCglobal has developed its Pedigree Messaging Standard that has been ratified for use.
Second, this ePedigree works with a Serialized Global Trade Item Number (SGTIN) 96-bit
code. This 24-character code encompasses such items as manager number, item number,
and a serialized code. This serial number, when embedded into either an RFID tag or a 2-D
code, is a key component in tracking and tracing the product through the pharmaceutical
supply chain. It is included in the ePedigree, which contains much additional information
about the chain of custody.
Options exist for RFID or 2-D Data Matrix codes, or a combination, at the item
and/case level:
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
(Serialization options, continued)
OPTION 2D Codes: Item Level – 2-D Data Matrix; Case – 2-D Data Matrix
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SGTIN 96 on either item level label or carton 2-D Data Matrix Code.
Requires line of sight at the item and case level, making it complex and laborintensive for the supply chain to deploy.
Most cost effective solution, from a unit level consumable basis and cost of capital
for initial hardware and software.
Quickest of the three to adopt.
OPTION Hybrid: Item Level – 2-D Data Matrix; Case Level – UHF RFID
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SGTIN 96 would be in the Data Matrix code at item level.
UHF RFID tag could hold information concerning items within the case.
Allows for a low unit-cost implementation at the item level.
Helps the supply chain by deploying a non-line-of-sight technology at the case level.
Hybrid method allows adoption of RFID, assisting with the initial RFID technology
learning curve.
RFID at the case level adds additional capital and consumable cost for the brand
owner, but it’s likely more realistic and acceptable than full item-level RFID
implementation.
Note: this is still fairly complex for the supply chain to read item-level units,
especially once they have been removed from the original case.
OPTION RFID: Item Level – HF or UHF NF RFID; Case Level – UHF RFID
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RFID tag holds SGTIN 96.
Full RFID solution similar to Pfizer and Purdue Pharma deployments.
RFID tag inserted onto the item-level label or the carton, either HF or UHF NF
RFID tag could contain information either initially or as the product moves through
the supply chain. To protect the data’s integrity, the tag can be secured or encrypted.
Case level would deploy a UHF tag, like the solution above.
The most costly solution of the three. Implementing RFID from the outset, however,
could save time and dollars, providing the supply chain with an easy-to-read system
in compliance with ePedigree based regulations.
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Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Top 10 Serialization FAQ’s:
We will not have time or space to deal with all them in depth, but we will look at
some of the basic issues. We can also take a look at some of the current trends. At the
end, the questions should provide a roadmap process to determine how to start the
journey forward.
Question #1: Should we use RFID or 2D?
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RFID and 2D Variable Data Matrix Codes are both capable of providing Mass
Serialization
Pharma Companies may well begin with 2D and progress towards RFID
Some companies where Biologics, Eye Care Products, Inhalants, Injectables are
involved may determine that 2D is the best choice due to potential
incompatibilities between the biologic drug and the radio frequency (RF) signal
RFID has to be given serious consideration
RFID is the only non-line of sight technology
For the marketplace to Mass Serialize the billions of products prescribed each
year using a technology that must be scanned in a line of sight environment is not
practical
In fact, key wholesalers like Cardinal, AmeriSource Bergen and McKesson all
support RFID and are working to install the systems necessary to use the
technology in their distribution chain
At the present, there is about an equal number of RFID and 2D Pilots and/or
Production beginning
Question #2: Should we deploy Serialization on Cartons or Labels?
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Both Cartons and Labels can accept an RFID Tag or a 2D Data Matrix Bar Code
Determining which one to use is Pharmaceutical Manufacturer dependent
Much depends on the Product and the Packaging Line
For instance, those products which are liquid and packaged in plastic may need to
have an RFID tag placed on the Carton, instead of the Label
Other products may not even be packaged with a Carton, thus requiring the RFID
tag to be placed under the Label
Although the Pharmaceutical Industry started with most applications in Label
format, there are now numerous Projects evolving where the RFID tag will be put
in the Carton
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Question #3: What about Encoding the RFID Tag?
Several issues must be considered here:
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This can be done Pre-Serialized, meaning the RFID Tags come from the
Packaging Supplier already written with agreed upon data
Encoding can also be done on the Packaging Line (termed ‘In-Line
Serialization)
The main benefits to Pre-Serialized Packaging are:
 Minimizing Packaging Line Set-Up
 Less Data Management Complexity in Operations
 Reduced Quality Assurance Requirements
 No Line Speed Limitations
In fact, there is less capital required and less time spent in the conversion of the
Packaging Line to handle RFID if Pre-Serialized Packaging is deployed
With a tight timeline of January 1, 2009 it may be prudent to consider PreSerialized Packaging, at least to start
At the present time, most of the new emerging applications are moving towards
Pre-Serialized Encoding of the EPC
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
Question #4: What is the Serialization Schema and how do I put an EPCcode into
an RFID Tag or a 2D Code?
2D Datamatrix SGTIN Information
The data stored in the 2D datamatrix barcode will be the Serialized Global Trade
Identification Number (SGTIN). The number is made up of the combination of
application identifiers, the product NDC code, and a unique serial number:
2D Datamatrix Encoding Example - SGTIN
Note: The Indicator digit is used to represent the packaging level. It is always 0 for item level.
This number could be 2 for kits with multiple doses, 2 for inner-packs, and 5 for a case. Check
digit is calculated based on the Labeler, Product, and Package codes. It is used to ensure that the
barcode is correctly composed.
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Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Question #5: What Frequency RFID Tag should be deployed?
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Should we use UHF, UHF NF, or HF? The truth is – all can work.
HF may have a slight edge in current read rates, but UHF NF is gaining
ground.
UHF NF is certainly less expensive now, contributing to its overall interest.
Over the past three months, many of the new Pilots are beginning to seriously
evaluate the use of UHF NF.
This time last year UHF NF was not a real player in the market, but today it’s
clear that both HF and UHF NF will be deployed.
We will likely see both technologies deployed in the Supply Chain, using
multi-frequency readers.
Question #6: Is there an ROI for RFID?
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The truth is there may not be an ROI right at the start
However, we are starting to see real advantages in the market from the use of
RFID, especially in the area of Supply Chain Transformation:
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
Inventory Management

Returns and Credits, Billing

Other efficiencies gain opportunities
In fact, there are several closed loop RFID installations, which are starting to
see an ROI through the use of RFID for its Supply Chain benefits
 These systems are being deployed in RFID Cabinet based products in
Hospitals for use with various products like Pacemakers, Stents, and
other medical devices

In addition, as more Pharmaceutical Companies deploy the
technology, it will also come down in cost, assisting in making an ROI
on the technology
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
Question #7: What are the relative Cost Comparison between 2D and
RFID?
Many variables determine the incremental cost to packaging:
- RFID tag type (several options are available even within frequencies)
- Labels or folding cartons
- Item-level or case/pallet
- Production size volume
- Layered security features
- Inks/varnishes
Below is a chart that provide you with a general guideline:
* Labels: Flexographically printed
** 2D: HP Indigo Digital Printing - Variable Vision
*** HF: 2D Bar Code Encodation
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Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Question #8: What is the timing for implementation of Mass
Serialization?
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The California ePedigree law, requiring Mass Serialization, goes into effect
January 1, 2011
Wholesalers would like to have product by July 2010.
Even if California provides some legislative extension, the outlook for
Serialization at the State and Federal level is quite strong
We are all better off to get going now, learning about the technology and how to
deploy it in the Pharmaceutical Supply Chain:
 What we can do is select a line or a brand and get started
 Learn the RFID process and see what the benefits are to Serialization
 More and more Pilots and/or Production have started in the last few
months and activity is quickly moving forward now
Question #9: What about an RFID Solutions Provider?
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Getting started is tough and takes a great deal of time
The key for a Pharmaceutical firm is to first appoint an internal team or leader to
direct the ePedigree and Mass Serialization effort
Next, the team and/or the leader must select a Solutions Provider.
There are many of these providers and the Pharmaceutical Manufacturer can
manage this on their own, dealing with each of the suppliers separately
The team and/or leader can also choose to affiliate with a unified team, which has
all the necessary resources for deployment.
One such team is the California Express Solution Team, consisting of Acsis,
HP, Nosco, SupplyScape, and Systech International, InCode (Verisign)
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Question #10: What is the Data flow of the EPCcode information once
it’s on my Product?
Data flow with SAP and including additional Partners of Acsis and InCode
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
The above ten questions are a good place to get started. Beginning to answer
these will take you to the next level in understanding readiness for your company. Of
course, associated with these question, will be internal issues with IT, Regulatory,
Quality, etc. However, getting a firm handle on how you want to move forward with
RFID for ePedigree and Mass Serialization will help you work with the internal
customers in an easier and more expeditious manner.
ePedigree and Mass Serialization, with either RFID or 2-D, is a journey. The
journey can be fun, interesting, and a learning experience. We will all look back down
the road and marvel at what has changed in the Pharmaceutical Industry for Patient
Safety, Brand Protection, and the Supply Chain as a whole when ePedigree and Mass
Serialization are both fully implemented. We will have made the Prescription Drug
Supply Chain more effective for our country and our companies.
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Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Introduction to the California Express Solution:
The choice is not always clear and easy. However, with state pedigree laws pending
and California mass serialization less than one year from wholesaler inventory receiving,
the time to act is now. To move forward, a compliance and serialization strategy should
be created followed closely by detailed planning and then implementation. Many
companies are looking, not necessarily to have all commodities ready by July 2008, but
to demonstrate best effort and intent to comply by targeting a particular brand or group of
commodities, taking a risk-based approach.
Getting started can be difficult as well. There are many issues and several technology
suppliers. Coordinating this effort on a vendor-by-vendor basis can be a daunting task. A
group of leading companies dedicated to pharmaceutical has developed a complete,
integrated solution for California. The ‘California Express Solution’ integrates leading
component products and software services to enable you to get e-pedigree ready. These
companies and their basic roles are listed below:
Company
HP
Leadership
The world’s largest IT provider and major RFID user,
with 600 million products serialized across 35 countries
Role
Architecture, ERP/WMS
integration and project
services
Nosco
Packaging provider to over 325 pharmaceutical
manufacturers
Pre-serialized packaging
solutions
SupplyScape
Leader in ePedigree and serialization strategy. Over 60
electronic Pedigree implementations.
ePedigree application and
serialization strategy
Systech
Provides top pharma with data management at every
level of the packaging environment. Working with 19 of
the top 20 pharmaceutical manufacturers.
Packaging-line
serialization expertise
Acsis
Serialized Track and Trace Solution Provider
Process automation, device integration, ERP integration.
SAP Focused Company
Process automation, ERP
integration with SAP
InCode, a
Verisign
Company
Recognized as the Consultant of choice in Serialization
and Pedigree. Over 30 Serialization/Pedigree
Implementations, Proven Methodology. In-Depth
Knowledge of Partner Solutions
Consultant for Serialization
and ePedigree
implementations.
Nosco, Inc. Confidential
March 1, 2008; Updated May 20, 2008
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Between them, this team provides e-pedigree and serialization products and
services to the majority of the top pharmaceutical and biotechnology companies and
offers an ‘implementation-focused’ workshop for companies interested in exploring its
integrated approach for California. Click here to learn more and Register for a Workshop:
http://www.supplyscape.com/news/events/20080604.html
The time to get started is now. There are many issues to be covered in the strategy
and planning efforts before implementation can begin. In addition, the resources in the
market will be limited as the industry begins to deploy. Those firms who begin now and
take a leadership position will find their deployment will yield results.
Contact us to learn how we can help you:
Gregg Metcalf
Industry Manager
Strategic Initiatives
Nosco, Inc.
704.641.0771
gmetcalf@nosco.com
Craig Curran
General Manager
Strategic Initiatives
Nosco, Inc.
407.739.2572
ccurran@nosco.com
Learn more about Nosco® Item level Serialization at
http://www2.nosco.com/protectpatients
Learn more about Nosco at www.nosco.com