March 29 by Aodhan O Tuairisg

The Falsified Medicines Directive (FMD) exists primarily for patient safety. Medicines are generally high margin products that can be difficult to manufacture yet have significant impact on people’s health. Nefarious players attempt to disguise falsified medicines as the real thing so that they can make substantial profits. Bad or toxic quality, wrong dosages or the incorrect ingredients can cause harm both from the side effects of these drugs and none of the intended effects of authentic medicines.

Medicines are not consumed in the place that they are manufactured. There is a long supply chain with many players that extends from gathering the material elements to the delivering to the patient. Since 2011 the European Union (EU) has had a directive in place on how combat falsified medicines. It is in place to reduce how often falsified medicines enter the legitimate supply chain. It aims to set the environment for secure end to end supply chains. The directive is concerned with the false representation of records and documents relating to the distribution channels used.

Key elements of the Falsified Medicines Directive

• Manufacturers and marketing authorisation holders (MAHs) will establish the repository, consulting with others in the supply chain
• Each country in the EU has a designated not-for profit legal entity to maintain the repository along with a central EU hub
• The manufacturers and MAHs will provide the funding for the repositories
• The repository must be inter-operable and allow connection by pharmacies and others who supply medicines
• The repositories should also be compliant with data protection requirements
• National Competent Authorities (NCAs) will have access to the repository for the following:
     − Supervision and investigation of potential incidents
     − Reimbursement
     − Pharmacovigilance or phamacoepidemiology


What are the Changes with the Latest Directive?

This latest Directive introduces harmonised European measures to fight medicine falsifications, ensure that medicines are safe, and that the trade in medicines is rigorously controlled. Measures include:

falsified medicines• Obligatory safety features – a unique identifier and an anti-tampering device, on the outer packaging of medicines
• A common, EU-wide logo to identify legal online pharmacies
• Tougher rules on import of active pharmaceutical ingredients
• Strengthened record-keeping requirements for wholesale distributors.

Commission Delegated Regulation (EU) 2016/161 details the characteristics of the safety features, how medicine authenticity should be verified and by whom. The Delegated Regulation, and the new medicine verification system it lays down, will apply as of 9th February 2019.

What This Means – What is the Opportunity?

For most companies, regulatory change can be painful. Regulations can add cost and interfere with business operations. The possibility of failing to comply with the FMD regulations creates business risk, through fines and brand damage. Contract Lifecycle Management (CLM) systems let enterprises design regulatory needs right into their processes, so that compliance can take place with less risk, fewer manual steps, and at lower cost. Machine learning can be utilised to crunch through the data now available to speed up auditing, identify risks early, and reinforce the best channels to market. Segmentation allows focus on the specific drug(s), supply chain player(s) and region(s) that are involved.

There are also combined benefits to other parts of the business from undertaking these changes. This regulation also helps with tracking outcomes-based care. Since medicines need to be tracked to the patient in both cases, and with unique identifiers on each package, if a medicine is not providing the correct outcome then it can, and should be investigated in order to identify what the root cause is; patient adherence, incorrect prognosis, ineffective medicine, or falsified medicines, etc.

Getting ahead of regulation change can be made easy with a good CLM solution. The Apttus CLM platform is ideal in preparing for these regulations. There are three key steps:

1. Get your contract repository in order
2. Review contract terms in your current contracts
3. Assess impacts and prioritise accordingly

A best in breed CLM system provides the capability to prove that supply chains are working to the highest standards of what has been agreed. The directive states how medicine authenticity should be verified and by whom. These elements should be reflected in contracting that is in place with all parties involved, up and down the supply chain. An intelligent system will also provide positive business outcomes through reduction of errors and reduced contract cycle times, meaning improved efficiency and ease of doing business with both suppliers and customers. There will be clearer understanding between parties of where responsibilities lay both on a day to day basis, and when issues arise.

It is important to know who is responsible for what and to have this captured in agreements. This blog by Neeraj Saksena, about how to manage contractual obligations is a very good starting point. Product recalls is a good example of this. Clear contractual obligations here will vastly improve processes. Clarity around which party is responsible and to what service level can ensure that issues are resolved rapidly and liabilities are not disputed post event in court.

Being able to track and report against these obligations allows performance measurement. As the saying goes “what gets measured, gets done”. If obligations can be reported against, then areas for improvement can be identified along with risk and exposure. Measuring also makes audits much quicker and effective by allowing machine learning to carry out anomaly analysis so people know where to focus their efforts.

A good CLM system enables organisations to ensure that future contracts are going out with the correct language. An enterprise class CLM system with Intelligent Workflow and Approvals will help to make sure that those drafting contracts have the latest clause language in their playbook, and that contracts do not go out unless they have been approved by the relevant parties depending on the details of the contract such as; contract value, payment terms, types of products, clauses used, and if any changes have been made to certain clauses.

Finally, adherence to the Falsified Medicines Directive will become a key requirement in the response to tender submissions. With a leading tender management solution getting the latest policy version and required reports into the Dossier is straight-forward.

The Falsified Medicines Directive will certainly involve change, but there are plenty of opportunities to make processes more effective, improve patient outcomes, work better with suppliers and customers and reduce the lost revenue from falsified medicines ending up in the healthcare system.


Learn more about how Apttus CLM can help your company. Register today for Apttus Accelerate, May 14-16, San Francisco.


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