Light at the End of the Tunnel: Serialization of Pharmaceutical Products Nearly Complete

By: Angela Fernandez – Vice President Community Engagement  – GS1 US

There is reassuring news about the healthcare industry’s ability to meet increasingly difficult supply chain challenges: U.S. pharmaceutical manufacturers have now almost universally adopted product identification standards that promote improved visibility, inventory management, and track-and-trace.

An August 2020 study conducted by AmerisourceBergen, Cardinal Health and McKesson Pharmaceutical, in partnership with GS1 US, evaluated industry progress in serializing pharmaceutical products as required by the U.S. FDA Drug Supply Chain Security Act (DSCSA). 

The regulation specifies that pharmaceutical products must be marked with a U.S. Food and Drug Administration (FDA) National Drug Code (NDC), serial number, lot number, and expiration date. When using GS1 Standards, the NDC may be represented by a GS1 Global Trade Item Number® or GTIN®. Barcodes containing all four data elements enable products to be tracked and traced throughout the supply chain with a simple scan at each stop. The electronically captured data can then be shared between all trading partners, enabling full supply chain visibility so that dispensers can optimize inventory management and track-and-trace processes.

The 2020 barcode assessment findings confirmed that the pharmaceutical industry’s implementation of required data standards is clearing the manufacturing and labeling hurdles, as the majority of items are marked with the correctly formatted barcodes.

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Proof of Progress

The barcode assessment was the fourth annual study in which wholesalers scanned barcodes on pharmaceutical products entering their distribution centers, and the third study in which all three of the largest wholesale companies participated.

Each barcode assessment took a snapshot of industry progress in achieving full implementation of the DSCSA labeling requirements. Marked improvements have been observed each year, culminating with the latest results revealing more than 90% of products properly serialized and barcoded.

Each company examined a different slice of its wholesale operations to assess barcode readability: AmerisourceBergen evaluated package (lowest saleable unit) barcoding of specialty pharmaceuticals, those prescribed by specialists for unique therapeutic uses. To avoid duplication, McKesson measured packages (lowest saleable units) of prescription drugs that are widely distributed to hospitals and retail pharmacies. Cardinal Health reviewed progress with the labeling of homogeneous cases.

Both AmerisourceBergen and McKesson, scanning some items that had small packaging profiles, evaluated for the correct use of a two-dimensional (2D) barcode (e.g., GS1DataMatrix), while Cardinal Health examined for either 2D or linear (e.g., GS1-128) barcodes. Both methods of identification with the four required data elements are in line with the specifications outlined by the DSCSA.

In all, 51,400 products were scanned in the three wholesalers’ facilities. The GTIN (with the National Drug Code, or NDC, embedded) was found on nearly all units scanned, ranging from a low of 93.1 percent (Rx packages) to highs of 97.8 (homogeneous cases) and 99.7 percent (specialty). 

Pharmaceutical products that entered the supply chain prior to 2018 are covered by a “grandfather provision.” They are not required to meet all DSCSA labeling requirements, allowing them to remain in distribution until they expire. That means the percentage of non-serialized products still circulating within the supply chain continues to decrease as the grandfathered products are used or expire. A significant year-over-year change was seen in the average expiration date of products in distribution from 0.3 years in 2018 to 1.6 years in 2019 and again in 2020. 

Additional details on the barcode assessment are published in a new GS1 US report, “Progress on 2023 DSCSA Interoperability.”

Perfecting the Barcode

Even when the information is properly encoded, barcode quality affects its usefulness for data capture and exchange. The color and size as well as placement and uniformity of the barcodes must be consistent for successful scanning. Also, special characters and double-zero dates in the barcode create problems with readability and interoperability. Each year, companies have improved their barcode formatting and application to eliminate these issues. The barcode assessments have provided valuable information to inform their efforts.

In earlier assessments, barcode color combinations and sizes varied, causing scanning and data capture issues. When selecting colors and printing the barcode, a black symbol on a white background produced no-fault scanning. Other colors either would not scan at all or produced inconsistent results. Some symbols were too small, and those products that carried QR and other barcodes could cause confusion. 

Barcode placement is also important, and the studies showed that manufacturers were positioning them all over the place – on the bottoms or tops of bottles or boxes, wrapping around cases, printed on shiny surfaces and attachments blocking easy access to codes. Some were printed too close together or print was smudged. These issues also hinder scanning. On those that require a 2D barcode along with a retail point-of-sale barcode (U.P.C.), both must carry the same GTIN.

Special characters like dots, dashes and slashes used in the lot and serial number fields pose challenges for data exchange between trading partners. Although acceptable by GS1 Standards, computers sometimes interpret the characters as messaging protocols rather than data elements. GS1 is working with the industry to develop an acceptable solution to circumvent this problem going forward. Similarly, the use of leading zeros in lot and serial numbers should be avoided to eliminate risk of mismatches if they are dropped.

Double-zero (00) date designations are also problematic when used in digital data transfer. It is preferable to specify an actual day to avoid confusion and ambiguity, and to support transmission of the date through inventory systems. A double-zero date undermines interoperability because it does not fit the data format for the Electronic Product Code Information Services (EPCIS) standard used for products’ historical and event tracking. When shared between manufacturers, distributors and dispensers, the zero-zeroes in the date field will show an error. Both 2019 and 2020 barcode assessments found that almost two percent of serialized items had a “00” expiration date. In 2020, this included 4% of specialty packages and 4% of the homogeneous cases, while none of the prescription packages had 00 expiration dates.

Extending Product Traceability All the Way to Point of Care

The ability to exchange supply chain data in the common language of standards enables suppliers to forecast and meet demand. Clinicians ordering inventory can also rely on a trustworthy source of product information. If a drug is recalled, it can be quickly located and removed from inventory.

When GS1 Standards, including GTINs and Global Location Numbers (GLNs) are adopted all the way to the point of care, healthcare providers will be able to know what products they have in inventory - even down to a specific shelf in storage or at the pharmacy - and when the next shipment of products will arrive. The full benefit of these improvements will be maximized when providers are capturing the data and sharing it internally as well as backward mthrough to suppliers.

In addition, the three wholesalers noted that processing fully serialized products, marked with properly formatted barcodes, can improve their productivity at receiving. If manufacturers are using 2D barcodes, only one scan is required to capture the product data, as opposed to two scans to get all four product identifiers from two linear barcodes. If they have all data elements encoded - especially in a 2D barcode - it can be a very easy receiving process.

Conversely, without all four product identifiers on the packages, extra steps will be needed to verify what is missing and then log the information to go back to the manufacturer in question.

Words to the Wise

Effective implementation and management of DSCSA barcoding requirements is a long-term endeavor. The industry began working toward this goal back in 2013, when the DSCSA was passed, and has made tremendous progress since, especially in the past few years. Along the way, lessons have been learned that are helping us understand how to best leverage these standards to fulfill the promise of supply chain transparency.

Through the annual barcode assessments, the participants gathered valuable insights and developed recommendations that helped guide suppliers, customers, and other industry stakeholders with their own implementations. One of the main takeaways that the companies agree on is the need for effective communication with supplier/manufacturers. AmerisourceBergen, Cardinal Health and McKesson Pharmaceutical make it a priority to communicate regularly with their manufacturer partners about their progress on serialization.

AmerisourceBergen, for instance, developed a mobile application that enables a user to photograph products with problematic barcodes, then attach a visual representation of the precise concern to the appropriate supplier. Since analytics in each assessment have identified trends or patterns that could prevent accurate scanning, this continuous sharing of information is vital for supply chain partners to work out any issues for improvement.

All three companies are also unified in advising pharmaceutical manufacturers to stay focused on serialization programs, noting that while some may wish to defer the effort because of costs and extended enforcement deadlines, it’s a risky decision. For example, imagine that a character set is encoded incorrectly or a GTIN is not associated with a U.S. FDA National Drug Code (NDC) number. When those issues arise, the manufacturer will get feedback to correct the errors before they become endemic to its entire portfolio.


As the COVID-19 pandemic continues to unfold, supply chain issues are receiving widespread attention. The entire world has been watching as the industry grapples with unprecedented challenges, first in a feverish scramble to absorb and accommodate unexpected supply and demand imbalances; and now, pondering the critical vaccine pathway from supplier to administrator to people’s arms. The high visibility of these lifesaving systems and processes sheds light on the complexities of healthcare supply chains. It highlights the importance of the digital transformations being made that will enable the industry to better handle supply and demand fluctuations and adapt to new distribution challenges. Interoperable, standardized product information is an important prerequisite for enabling extreme visibility regarding the availability, ordering status and location of medical supplies and pharmaceuticals so that they arrive where and when they are needed, better supporting patient care.

Thankfully, the pharmaceutical industry has been preparing for such transformation, implementing global supply chain standards that drastically improve supply chain transparency. The barcode assessments showed continuous year-over-year progress on serializing pharmaceutical products - to the point where the majority are now properly labeled. It represents meaningful progress because industry-wide adoption of global data standards and product serialization makes it possible for stakeholders to exchange information seamlessly in real time, potentially averting disastrous breakdowns in supply.

We are well on our way to a better - more efficient, transparent and reliable - supply chain that can significantly improve industry operations and ultimately patient care. It is remarkable that this progress continued, even gaining momentum, during the most challenging year the healthcare industry has ever faced. Against that backdrop, pharmaceutical suppliers continued driving meaningful advancements that will make our drug supply safer, and our healthcare systems better equipped to handle new challenges as they arise.

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