In addition to the ERP providers, best-of-breed companies, such as SupplyScape and Acsis Inc., are providing vertical capabilities in the areas of e-pedigree and pharmaceutical-specific track-and-trace functionality.

"If you set up a production run in a manufacturing facility today, you have an eight-hour shift making the same product and you put the same identifier on any of the products that are produced that day," says Stuart McCutcheon, CEO of Acsis, which offers the PharmaTrak serialized distribution application, which works with SAP. "We take serialization to the next level where you have visibility to each pallet of product, each case, each individual item. Pharmaceutical makers don't currently have systems in place with that kind of granularity that would allow them to do that."

Facilitating Drug Recalls

Once those systems are in place, however, companies can expect to see real business value from these compliance-driven initiatives, particularly with regard to their ability to handle product recalls.

Just ask US Oncology, a distributor of oncology drugs, which was one of the first to roll out SupplyScape's e-pedigree software, in mid-2006. When one of its pharmaceutical manufacturers issued a recall that year, US Oncology was able to tap into the e-pedigree database and within minutes knew the exact location of all of the affected shipments so that it could expedite the recall process.

"The whole thing took 15 or 20 minutes instead of weeks or even months," says Rolando de Cardenas, US Oncology's vice president and general manager of Oncology RX.

Sharp Corp., a contract pharmaceutical packager, views its ability to handle serialization and the e-pedigree directives coming out of California and other states as a key competitive differentiator. Therefore, it sees an investment to create track-and-trace capabilities as worthwhile. Sharp is partnering with Systech International, which delivers packaging execution systems for the pharmaceutical industry, and its ERP provider QAD, on its e-pedigree and serialization solution. "We see this as a technology-enabler for our business and an opportunity for us to establish ourselves as a top-tier contract packager," says Rick Siebert, Sharp's vice president of project management and business development.

Yet, Siebert doesn't downplay the money and effort it will take to gear up Sharp's technology infrastructure. "This means we have to revitalize our entire manufacturing process to have the hardware capabilities and software to individually mark the lowest unit of sale," he says, citing new 2D bar coders, RFID tags and readers, printers, and cameras among the investments Sharp will have to make to equip its 50 packaging suites. "To equip one packaging suite to do e-pedigree and serialization is about a $400,000 to $500,000 investment, which is very significant for a company our size," he says.

In the end, however, it's the consumer who should benefit from the e-pedigree and serialization efforts and the pharmaceutical industry's focus on supply chain best practices. "To be able to have supply chain visibility to trace a product down to a consumer level ultimately lets a company react [to a recall] within hours," says Phil Friedman, vice president, consumer goods, and the head of QAD's life sciences vertical division. "What you want to be able to do is be super-responsive and protect the brand at the same time."