We present to your attention a publication from a series of analytical reviews of the Single Distributor LLP "SK-Pharmacy" in the framework of the National Project "Healthy Nation"
In the current modern realities, it is impossible to talk about the effectiveness of medicine without the transformation of all business processes in the industry. That is why the Head of State has repeatedly noted the importance of digitalization of the healthcare system in his speeches.
The development of e-health includes both the integration of databases, the creation of a patient monitoring system, and a system for monitoring the movement of medicines and medical devices.
The lack of accurate information on the balances and traceability of medicines in medical organizations is the main problem of digitalization of drug provision. Today, medical organizations compile reports on balances by manually entering the current consumption of medicines, which does not ensure the quality and reliability of information.
Drug labeling is the most important tool for controlling the movement of medicines through all supply chains from the manufacturer, distribution structure, pharmacies and medical organizations to the end point - the patient, and an important step towards the digital economy.
The introduction of mandatory labeling and traceability will make the circulation of medicines more transparent and is one of the main tools for protecting against the circulation of counterfeit and falsified products, providing the buyer with the opportunity to independently check the purchased drugs for authenticity, significantly reducing the costs of "flow" of medicines, simplifying the consolidation of information on the balance of medicines, and also providing piece-by-piece accounting of individual packaging from the manufacturer to the patient.
This practice has long been used in a number of countries such as South Korea, Turkey, Taiwan, Saudi Arabia, USA, China, India, Russia, Italy, Argentina. In Kazakhstan, the drug labeling system is being introduced in stages.
For example, in the Russian Federation, the first stage of labeling began in 2018 and gradually by 2021 they switched to mandatory labeling for the entire list of medicines. In Turkey, which is a successful example of the effective implementation of drug labeling, preparations for mandatory drug labeling have been going on for 8 years.
As follows from the above, the field of drug supply is in the process of digital transformation. As we assess the risks of increased demand and supply disruption, we are dealing with a new reality. Where sales forecasting and inventory management online are the cornerstones.
And the Single Distributor, studying the best world practices, is taking steps towards improving the drug supply system.
In general, the introduction of labeling for the traceability of goods in Kazakhstan is carried out within the framework of the Agreement on Labeling Goods with Identification Means in the EAEU, as well as the Law of the Republic of Kazakhstan “On Regulation of Trading Activities”, which came into force in the spring of 2019.
If you briefly plunge into history, according to Deloitte, the labeling of goods in the country initially began with fur products, then it affected tobacco products and shoes. Now attention is focused on medicines.
HOW DOES THE LABELING SYSTEM WORK?
Marking is the application by the manufacturer or importer to the product, secondary or transport packaging of a special mark, which is an identifier confirming the authenticity of the goods.
The main goals of digital marking and traceability are to reduce the shadow market, prevent re-circulation and counterfeit medicines, create conditions for honest business, improve the quality of manufactured and imported products, and increase the collection of budget revenues in the form of taxes and duties.
Labeled medicines are medicines that have identification means and information about which is contained in the information system for marking and traceability of goods (IS MPT), designed to provide information support for the processes of marking goods with identification means and their further traceability in the process of circulation.
Identification tools contain a unique marking code, which is a combination of characters that includes 4 groups of data that meet international standards in the field of accounting and bar coding GS1 DataMatrix.
DataMatrix is a two-dimensional matrix barcode in the form of black and white elements or elements of various degrees of brightness, usually represented in the form of a square. A matrix barcode is used to encode text and other types of data. The code contains information about the manufacturer, country of origin, serial number and protection against hacking.
At the same time, at the beginning of the marking code line, there is a sign of the symbolism of the barcode of an international organization in the field of standardization of accounting and bar coding of GSI, FNCI and ASC232 logistic units.
A barcode is graphic information (a sequence of stripes or other geometric shapes) that is applied to the packaging of goods for reading by technical means. Such a sequence can be assigned not only to a single product, but also to a group or transport package.
When marking, a two-dimensional matrix barcode "Data Matrix" will be used. It will make it possible to trace each package of a labeled medicinal product. It differs from other types of codes in that it contains a larger amount of information compared to analogues, the possibility of placement in a small area and "survivability".
The code contains information about its own recovery and if the marking is damaged, it can be read even if 2/3 of the image is saved. In addition, the code cannot be faked or changed, since the code is generated using cryptographic protection.
Labeling of medicines with identification means is carried out by the participants in the circulation of medicines (FACL) in accordance with the approved procedure for the Rules for the circulation of medicines, including the purchase, storage, import into the territory of the Republic of Kazakhstan, production, labeling, transportation and sale of medicines.
The following are involved in the circulation of labeled pharmaceutical products:
• manufacturers;
• wholesale companies, distributors;
• retail outlets - pharmacies;
• medical organizations;
•Patients.
Each category has its own accounting features.
For example, manufacturers should register with the labeling system. Then register the medicinal product in the National Catalog of Goods. After that, the moderation of the Cards of goods in the National catalog of goods takes place. The personal account is replenished, Data Matrix marking codes are ordered, marking is applied to the goods and an acceptance certificate is formed.
The distributor of medicines, as a participant in the circulation of medicines, also needs to register in the labeling system. The manufacturer/importer, when transferring a medicinal product to a distributor, forms an act of acceptance and transfer to the information system for labeling and traceability of goods (IS MPT), containing information about the labeling codes and the product. Ultimately, the distributor forms an act of acceptance and transfer and transfers the medicines to another participant in the turnover (distributor, pharmacy organization, medical organization).
As for medical organizations, here you also need to register in the system. Then contracts are signed, additional data is filled in, the readiness of the equipment is checked, the certificate of acceptance of the transfer of labeled medicines is confirmed, the drugs are included in the accounting system of the medical organization. The final step is the withdrawal of drugs from circulation.
Each participant in the turnover must record the operations that are performed on the marked goods. Thus, the entire path of movement of medicines is tracked, from the moment of production to their receipt by customers. Regulatory authorities at any time will be able to find out where the pharmaceutical product is located and how much time is left until its expiration date.
LEGISLATIVE ASPECTS
Kazakhstan has a law “On approval of the rules for labeling and traceability of medicines and labeling of medical devices”, approved by order of the Minister of Health of the Republic of Kazakhstan No. ҚР ДСМ-11.
According to the legislation, the labeling of medicinal products is carried out by the manufacturer (or packaging company) of medicinal products for each packaging unit (primary, intermediate, secondary) in the Kazakh and Russian languages.
Circulation of medicines in the territory of the Republic of Kazakhstan after the date of introduction of labeling by means of identification, in accordance with the law "On the regulation of trading activities", is carried out when information about their sale is transferred to the system, subject to the phasing of the introduction of labeling and traceability.
The intake of medicines marked with identification means is confirmed in the IS MPT by the subject in the field of circulation of medicines and medical devices.
The subject of pharmaceutical activity, carrying out the retail sale of medicines, withdraws medicines from circulation by scanning and recognizing the identification means applied to the consumer packaging of the medicine by technical means associated with the cash register installed at it.
It should be noted that changes to the information previously provided in the IS MPT are not carried out during the period when the state body checks the activities of the subject of pharmaceutical activity.
On August 6, 2022, the Ministry of Health of the Republic of Kazakhstan published an Order in a new edition of the Rules for Labeling and Traceability of Medicines.
In accordance with the approved Rules, marking is carried out:
STAGES OF MEDICINE LABELING IN KAZAKHSTAN
The decision to conduct a pilot drug labeling project was made in December 2018. And since September 2019, it has been launched, for which methodological recommendations for this procedure were approved, a list of participants in the pilot project and medicines subject to labeling within its framework was determined.
At the same time, in October 2020, by order of the Prime Minister, a comprehensive plan for the development of the pharmaceutical and medical industry for 2020–2025 was approved, which also includes issues of labeling medicines.
As for the pilot project, it was completed on July 31, 2021. According to the Kazakhstan Pharmaceutical Bulletin, 23 representatives of the pharmaceutical industry, including manufacturers, distributors, pharmacy and medical organizations, took part in the pilot.
Based on the results of the pilot project, recommendations were sent to improve the marking and traceability information system.
The first stage of mandatory labeling of 90 types of medicines began on July 1, 2022, of which more than 80% of medicines are produced by 4 domestic manufacturers.
A number of domestic manufacturers managed to purchase equipment for marking, joined the IS MPT, but not all market participants are ready to fully implement the project.
Taking into account the risks of reducing the availability of medicines, the insufficient readiness of the information system, due to the lack of integration of the information system for labeling and traceability of goods, the Ministry of Health of the Republic of Kazakhstan has developed amendments that suspend the mandatory labeling and traceability of medicines until July 1, 2024.
The following sequence is currently defined:
Full traceability will be implemented from July 1, 2025.
PILOT PROJECT LAUNCHED ALONG WITH KAZAKHTELECOM JSC
Kazakhtelecom JSC, being a single labeling operator, is working to build a traceability system for medicines in the existing infrastructure of the pharmaceutical market.
The single distributor shows an active interest in finding opportunities for the introduction of an automated drug supply system, adapted in its functionality for the sale of free prescription drugs within the framework of the guaranteed volume of free medical care and in the compulsory medical insurance system.
So, in 2020, a Memorandum was signed between the Single Distributor and Kazakhtelecom JSC on conducting a pilot project on labeling and traceability of medicines. As part of the pilot, labeled medicines were delivered to the warehouses of the Single Distributor, and subsequently shipped to medical organizations.
During the launch of the process, a number of comments were identified, which were sent to Kazakhtelecom JSC for revision. In addition, the parties studied the experience of introducing mandatory labeling of medicines from foreign countries.
Based on the results of the pilot project, the Single Distributor agreed on improvements to the information system for monitoring the movement of medicines from the manufacturer to the end consumer using labeling and identification of packages in accordance with business processes for the movement of medicines. Thus, having updated the schemes of business processes, Kazakhtelecom JSC, taking into account the specifics of the activities of the Single Distributor, prepared and presented a prototype of the information system at the beginning of this year. The prototype is currently being tested at the warehouses of the Single Distributor.
Positive changes in the system have been made in the area of maintaining the functionality of the power of attorney using the example of the leased warehouses of the Single Distributor, namely, improving the procedures for receiving, moving and shipping medicines.
The changes will allow the Single Distributor to log in to the system independently. In addition, the lists of roles for the warehouses of the Single Distributor are defined. Also, it is possible to maintain geographically distributed divisions for warehouses and create an act of acceptance and transfer at the level of warehouses, distribution by medical organizations.
POSSIBLE RISKS
According to experts, the cost of medicines may rise by 27%. According to them, marking is, first of all, a considerable financial cost for drug manufacturers: the purchase of equipment for serialization and aggregation, cryptographic codes from a single operator, preparation and restructuring of premises and lines. Add to this the installation of software, the modification of the packaging material, and given the unstable geopolitical situation, there may be risks with the supply of these materials, and of course, a change in the registration dossier.
According to the updated business process schemes, Kazakhtelecom JSC provides traceability until the delivery of medicines to a medical organization. At the same time, at the moment there is no approved mechanism for registering the disposal of labeling codes in medical organizations when dispensing a drug to a patient, both at the inpatient and outpatient levels.
Since the 100% implementation of drug labeling and traceability is planned for June 2024, there is a risk that medical organizations will not be ready to work with labeled drugs.
And the reason for this is the non-compliance of the requirements in terms of mandatory labeling with the real technical equipment of medical organizations and the capabilities of their information systems. Accordingly, there is a possibility of failures in the traceability of medicines, which will lead to a disruption in the provision of medicines to the population.
At the moment, work is underway to eliminate all obstacles and malfunctions. Earlier, akimats of regions and cities of republican significance were instructed to provide medical organizations with the necessary equipment to work with labeled medicines.
In the future, the system for monitoring the movement of medicines will be improved, taking into account all the improvements and comments. The single distributor pays special attention to this, as the traceability of medicines and medical devices contributes to a more rational use of medicines.
For example, at the beginning of this year, an agreement was reached between the Single Distributor and the Digital Economy Development Center LLP, the digital marking project office of the single operator Kazakhtelecom JSC to continue cooperation in improving the marking and traceability system, ensuring operational interaction and information exchange and providing information support.
EFFECTS
Labeling of medicines is the most important tool for controlling the turnover. Now there is a large number of low-quality goods on the market, and labeling with the help of an information system will ensure the traceability of goods from production to sale.
Digitalization in the healthcare system provides cost reduction, improved quality and efficiency of medical services. This will help eliminate counterfeit products on the market and illegal ways of selling medicines.
In the long term, labeling will have a positive effect, allowing you to track the entire path of the drug from the manufacturer's machine to the pharmacy shelf. Labeling will also improve the situation in the country with the supply and provision of medicines, thereby preventing their possible shortage.
With digital labeling, manufacturers, healthcare providers and governments can see the most realistic picture of drug consumption in real time. In addition, this will allow:
At the same time, Kazakhstanis will be able to check the drug for legality by scanning the Data Matrix code using the free Naqty onim mobile application. The consumer will be able to see the basic information about the product: information about the manufacturer, composition, expiration date, maximum retail price and other important information. If, after scanning the labeling code, the buyer finds that the expiration date is overdue, and the cost of the medicine is higher than the maximum retail price, then you can leave a complaint in the application.
Now the country is working on increasing the number of participants in the mandatory labeling of medicines, strengthening control over the traceability of medicines. Producers were given a sufficient period of time to gradually replenish the list of items subject to labeling.
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