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PARALLEL DISTRIBUTORS 

The Cinderella of Serialisation 

In the pharmaceutical industry the parallel distributor buys licensed medicines from one market and then sells them on to another. The European Union, European Free Trade Area and United Kingdom will be implementing new serialisation laws from February 2019 that could considerably increase the workload of these parallel distributors. 
 
These laws, the Falsified Medicines Directive (FMD), make the participating countries into a single market each with their own specific regulations and languages. Before the directive came into force the key role of the parallel distributor would be to buy medicines from one country, adapt the packaging to another and sell them on there. 
 
Inserts within the packets would also need to be replaced to reflect the target language and all local legislation matched on the new packet labelling. Licenses are involved and the process is fully legislated but in essence the business model is re-packing, in some cases sophisticated re-labelling of the existing packs will be sufficient. Income is derived by buying goods at a relatively low price in one market and selling them on in another. 
 
This practice is perfectly legal and under government control but is not always with the blessing of the original manufacturers who may prefer to keep a tight rein on distribution and pricing structures. 
 
The FMD will change the business model for parallel distributors with additional overheads to encompass supply chain integrity. Every manufacturer of prescription drugs within the FMD market must ensure that packets are protected with a tamper proof seal and are marked with a unique reference number. The reference number is stored in a central database allowing distributors and dispensers to verify that a pack is genuine and not already dispensed before dispensing it themselves. 
 
The first new hurdle for our Cinderella is dispensing all the packs they are importing. As any FMD labelled pack will have a tamper-proof seal the whole pack will be destroyed when any new internal pack literature is inserted to meet the target market requirements. Before this can be done the existing pack identification code needs to be decommissioned with the country that issued the code. The code includes an element identifying the product, which is country specific, a batch number, date and serial number. The serial number could be retained for re-use when the drugs are re-packed or a new number generated. A serial number is unique to a product code but can be repeated between differing product codes. 
 
It is possible to decommission packs in bulk rather than scanning them in one at a time. This would require that the original supplier of these packs provided an electronic file with the unique identification code of every pack in the delivery. Considering the nature of parallel distribution relies on the purchase of surplus goods at a competitive price this scenario is unlikely. 
 
After decommissioning the drugs will need to be repacked for the new destination market. This will require a different product code as that code identifies the drug and its target market. Only licensed Manufacturing Authorisation Holders (MAH) are allowed to pack with new unique identification codes. The original code being useless as it is not tied to the correct market. Luckily the parallel distributors are classified as MAHs so will be allowed to create new codes. They will still need to pass the new unique identification codes onto the database of the target market. This is the same process, create codes, pack, then print a unique code onto each pack as will be carried out by the original manufacturer but with fewer of the economies of scale. The new packs will also need to encompass a tamper-proof seal, another potential change to the parallel distributor’s existing production line. 
 
There is a situation where the parallel distributor might get off lightly. It is possible to pack a prescription drug with a product code that applies to more than one country. This together with the associated, serial number, batch and date are stored in the verification databases of all the target countries. Unfortunately variations in language and local labelling restrictions limit the cases in which that might apply. One plausible example would be a product aimed at the UK, Republic of Ireland and possibly also Malta. In cases such as these it will not be necessary to repack the drug if it does not leave the group of countries specified by its product code. The parallel distributor can get away with buying and distributing much as they do now within markets with common laws and languages. In all other cases there will be additional costs to decommission, repack and recommission each prescription drug packet that they handle. 
 
The parallel distributor needs to prioritise their role as a creator of new unique codes. This process involves working as or with an On Board Provider (OBP) to upload details of their repacked products to the verifying authority. It is the responsibility of that authority to ensure that only approved packers can add this information, that being the key to keeping the distribution network secure from rogue products. Proving eligibility as a Marketing Authorisation Holder and that appropriate data transfer methods are in place will take careful planning. The process to decommission existing prescription drug packs is comparatively simple but once a packet has been decommissioned it can no longer be dispensed, even in its original target market. 

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