The pharmaceutical industry is experiencing a paradigm shift. There are factors leading to an increasing regulatory burden, greater fears regarding counterfeit medicines, and higher demand for supply‑chain transparency, all shifting pharmaceutical manufacturing practice in new directions. Serialization and track-and-trace efforts are causing seismic shifts in pharmaceutical supply chains.

For active pharmaceutical ingredient (API) contract manufacturing, this movement introduces many complexities, as well as opportunities. API contract manufacturing firms act on behalf of a third party, which has a drug product manufacturer, who has a regulatory obligation to maintain compliance with regulatory expectations and trade associations, while also ensuring compatibility with downstream manufacturers and distributors.

This blog takes a closer look at:

• The reasons behind serialization & track-and-trace
• The regulatory context
• Implications for API contract manufacturing
• The increasing significance of comparator sourcing & pharma contract companies
• Best-practice approaches and what to expect in the future

Whether you serve as an executive in an API CMO organization, a supply-chain leader, or a quality assurance professional, this article will give you usable ideas to prepare for serialized pharma.

What Is API Contract Manufacturing?

An API contract manufacturing organization (CMO) provides contract services specializing in developing, manufacturing, and in some cases, formulating active pharmaceutical ingredients. Some of the core services that an API CMO delivers are: 

• Synthetic/biocatalytic process R&D (research and development) 
• Pilot-scale and Commercial manufacturing 
• Analytical and formulation support 
• Regulatory documentation (DMFs, CTD modules) 

API CMO partners concentrate on the core API molecule, ensuring it is produced in compliance with global GMP and quality frameworks. API partners are increasingly required to comply with the “track-and-trace” mandate, similar to those imposed on full drug product CMOs.

Key Drivers of Serialization & Track-and-Trace 

What is motivating regulators to enforce serialization and track-and-trace principles? There are several reasons:

1. Combat Counterfeit Drugs & Diversion – Thousands die each year due to counterfeit drugs. Serialization is designed to stop the infiltration of counterfeit products from the supply system.
2. Ensure the Drug’s Integrity – Tracking packages throughout the supply chain minimizes the risk of error and diversion, while also allowing for greater scope for quickly and easily retrieving faulty products, if necessary
3. Enable Quick Recalls – Dental codes allow identification and tracing to individual batches/products, meaning recalls can have precise targeting.
4. Increase Transparency, Compliance & Tracking – Governments, payers, and auditors are asking for stricter compliance measures.
5. Allow Digital Readiness – Serialization facilitates planning for Internet of Things (after all, how can you connect a product to the IoT if you can’t enumerate it), blockchains, and enables real-time analytics.

Each of these reasons will impact the entire supply chain, including your API contract manufacturing operations.

What Are Serialization & Track‑and‑Trace?

Serialization: Assigning a unique identifier (a standardized identifier) to each saleable unit (e.g., vial or bag), generally with some sort of GS1 DataMatrix or linear barcode with: 

• Global Trade Item Number (GTIN)
• Serial number 
• Expiration date 
• Lot/batch number 

Track-and-Trace (T&T): Collecting and reporting on movement & status data of unique saleable units across packaging, shipping, wholesaling, and dispensing. There are different regulatory systems:  

• EU Falsified Medicines Directive (FMD): SN’s plus Aggregation via NMVS
• US Drug Supply Chain Security Act (DSCSA): Transaction data sharing over time 
• India’s GDP & IT requirements: 2-D barcodes and traceability 

T&T essentially links serialized numbers to product lineage, time stamps, the tracking history, and custody information.

Regulatory Landscape: Global Requirements

Below are some specific recommendations regarding serialization and track-and-trace responsibilities based on distinct global parameters:- 

European Union (EU)

• Serialization: Serialization has been mandatory since February of 2019.
• Track-and-Trace Requirements: Aggregation is required.
• Legislation: Compliance is based on the 2011 Falsified Medicines Directive (FMD).

United States (US)

• Serialization: All serialized units must be implemented by November 2023.
• Track-and-Trace Requirements: A smoothed track-and-trace system is expected to exist by 2023.
• Legislation: Governed by the Drug Supply Chain Security Act (DSCSA) enacted in 2013.

India

• Serialization: Requires barcodes on Active Pharmaceutical Ingredients (API) and Finished Dosage Forms (FDF). 
• Track-and-Trace Requirements: Work is actively being completed.
• Guidance: Aligns with guidance from January 2023.

 China

• Serialization: Volume-based serial number barcodes required. 
• Track-and-Trace Requirements: Requires a stock ledger with real-time uploads. 
• Status: Pilot programs have kicked off to check the feasibility of the system.

 Brazil

• Serialization: Since 2017
• Track-and-Trace: National Track-and Trace program has been operational since 2021.
• Legislation: Brazilian Decree compliance published(document no. not provided).

Other Markets (LatAm, GCC, SAU)

• Serialization & Track-and-Trace: Diverse local regulations applied.
• Status: With regards to the regulations ongoing rolling implementation.

Implications for API Contract Manufacturing Organizations (CMOs)

• Additional Requirements: API CMOs will need to serialize APIs for export to regulated markets.
• Data Reporting: There is a requirement to report serialization data to national databases, such as the SRS Export hub.
• Upgrades to Infrastructure: Upgrades to the packaging line and systems used to manage the data from regulated markets are becoming necessary to ensure these new, evolving regulations can be followed.

These facts summarize the serialization and track-and-trace obligations concerning international markets, along with the impact on the industry.

Serialization’s Impact on API Contract Manufacturing

Data Management & IT Integration

Historically, API CMOs focus on recording batches in LIMS and ERP systems. Serialization adds: 

• Unit-level serialization metadata (SN, GTIN, expiry).
• Aggregation relationships linking individual items to packs or pallets.
• Integration with packaging lines to write barcodes during secondary packaging.
• Linking to regulatory databases (e.g., EU HUB, FDA SRS, Saudi Mada).
• Improved data governance to ensure accuracy, timestamp data, and auditing.

For API CMOs still managing these processes with legacy databases and wanting to modernize their platforms, serialization software solutions (e.g., M-Systémes, SEA Vision, Adents) may offer modernization solutions.

Operational & Process Reorientation 

Moving to serialization requires you to rethink some fundamental core processes (operations):

• Packaging configuration to decide which items need serialization versus packaging as bulk.
• Develop scalable processes for batch splits and aggregation.
• Look to minimize line downtime due to changeovers.
• Validate new equipment (printer, cameras, aggregation readers).
• Train QA/QC staff on scanning and data quality checking.

These changes will need to be reflected in updated SOPs and GMP documentation to demonstrate audit readiness for inspections.

Supply Chain Transparency

API CMOs are increasingly communicating serialized data with:

• Pharmaceutical contract companies are getting packaging instructions.
• Comparator sourcing teams track similarities and regulatory parity.
• Downstream contract manufacturing companies receive the product post the finished dose.

For example, a US-based API being used by an EU licensor requires a SN main package acceptable in the EU.

Validation & Compliance

Serialization requires a few extra layers of validation, including:

• IQ/OQ/PQ for line equipment.
• Computer System Validation from serialization software.
• IT/infrastructure validation for regulatory system connectivity.
• Regular audits and the use of mock recalls to verify traceability.

Strong validation programs can mitigate the risks of non-compliance and holding a product.

Partnering with Comparator Sourcing & Pharma Contract Companies

Comparator sourcing & pharmaceutical contract companies provide programming to API CMOs, including:

• Sourcing comparator APIs for clinical bioequivalence (BE) studies.
• Packaging matching with mutable & aggregation with the same standards.
• Ensuring regulatory parity for the region where the product is going to be exported/imported.
• Aggregating and providing T&T data to downstream partners.

These organizations provide CMOs with access to serialized APIs at the point of integrating them into finished dosage forms, which lowers risk & time delays.

Comparator Sourcing & Pharma Contract Companies: Role & Strategies

Let’s dig into both comparator sourcing & pharma contract organizations’ support of serialization initiatives.

• Global comparator sourcing.
• Identifying which APIs to procure as reference standards.
• Utilizing serialized packaging and GMP oversight.
• Shaping import/export compliance.
• AG integration.
• Reuse with validated serialization & aggregation systems.
• Barcode format/reg content is country-specific.
• Hand off both downstream partners with metadata and track-and-trace lineage.
• Regulatory support.
• Authoring regulatory filings (COAs, batch info, serialization certificates).
• Interfacing with regulators on audits or more formal submissions
• Risk share and compliance as a service.
• Visibility into packaging bottlenecks and audit gaps.
• Providing more than a turn-key solution, e.g. sourcing, serializing, exporting and tracking.

Engaging with such capable entities allows API CMOs to achieve compliance more quickly by drawing on aggregate expertise, allowing them to sidestep complexity and minimize costs.

Conclusion

Serialization and track-and-trace regulations are changing the pharmaceutical landscape, from the manufacture of APIs to the launch of the pharmaceutical product. For API contract manufacturing, the effects are considerable: 

• Increased compliance burdens.
• More IT & Operating relationships.
• Better integrated with comparator sourcing & pharma contract companies.
• A way to increase digitization in supply chains.

However, with the proper approach, ‘thinking through pilot programs’, partner selection, data governance, and planning readiness, API contract manufacturers can use these impacts to create competitive advantages.