The clock is ticking – What to expect from the serialization process in Russia

Russian serialization regulations appear to be very difficult and confusing for most of the local and foreign manufacturers. The experimental phase of the extensive track-and-trace implementation concerning all Rx and OTC products is supposed to be over by the 1st of January 2020. However, most of the companies are not prepared for the upcoming changes. The recent amendment introduced by the State Duma on the 3rd of November 2019 proposes to extend the period of track-and-trace implementation until the 1st of July 2020.

Mike Cohen – Regulation.

What’s the big deal?

Back in 2017, the Russian government introduced regulatory requirements concerning the mandatory serialization and tracing of all medicinal products. Through these measures the government expects to enhance traceability and patient safety, while also avoiding a pharmaceutical grey market.

According to these requirements, a scannable code of black and white squares and 128 linear barcodes needs to be on all secondary and tertiary packaging. Secondary packs must also include a unique identifier which contains various data elements, such as serial and cryptographic codes. However, legislators proposed unrealistically short deadlines considering the very complex nature of crypto labelling together with the confusing and illogical requirements.

Only half of the local companies are ready for a big change

Most of the domestic and foreign players are struggling to comply with the new requirements. First of all, there are multiple technical difficulties which arise when concerned with the manufacturer’s infrastructure and the global nature of production, the processes of development, data exchange with the operator’s information system, including software upgrades, testing and further validation on production line. The whole process might take from 6 months to 1 year from the moment these requirements have been finalized.

Positive results of crypto labelling testing have been observed among those who have installed the latest equipment. According to recent updates from domestic companies, only 52% of 860 production lines possess such equipment. 11% of packaging lines are expected to be supplied with equipment in accordance with the signed contracts, while 37% of packaging lines are still in the process of being equipped. As for foreign players, only those who have managed to import the products before the 1st of January 2020 may freely store, transport and distribute them without a crypto label before the expiration of the shelf life.

Will the new deadline be approved?

The recent bill introduced for discussions, suggests establishing a multi-staged introduction of the labelling system until the 1st of July 2020. In addition to ensuring the stability of the drug supply to the Russian population and preventing the disruption of the supply of medicines, the bill proposes to give the Government of the Russian Federation the right to establish the procedure and timing of the labeling system implementation.

What’s coming next?

After the experimental phase has been concluded, the monitoring system will have to track about 6.5 billion packages, covering more than 1,000 manufacturers, 2,500 wholesalers and 350,000 medical & pharmacy organizations. Taking into account that only 15% of participants and approx. 8% of the medicines are currently registered in the track and trace system, the experimentation phase is not very likely to be completed on time.

Simply put, the problem with serialization has two sides of a coin. Firstly, the majority of manufacturers do not have the technological solutions and financial power to implement these modifications in such a short period of time. Secondly, the entire drug monitoring system indicates high risks of failing since it lacks a clear procedure and has not yet been fully tested on all actors of the distribution chain (manufacturers, distributors, pharmacy chains, medical institutions). As the State Duma has yet to set the dates for the official hearings to discuss the newly introduced changes into the law, companies can only hope for a positive outcome of this difficult situation regarding serialization.