The Benefits Of Gs1 Global Standards In Patient Safety and Healthcare Efficiency

Gs1 Solution to Combat Countefeiting and llicit

The Benefits Of Gs1 Global Standards In Patient Safety and Healthcare Efficiency

ماهنامه شماره3(آبان ماه 1394)

Abstract

In today’s changing view, healthcare providers across the globe must transform their processes to provide value, quality and safe care. They must also work to eliminate waste and inefficiencies; achieve financial sustainability; and leverage information technologies to improve performance. Healthcare stakeholders are using GS1 Standards to ensure the reliability of data and optimize processes to reduce preventable errors, enhance Electronic Health Record management, support right medicine and comparative effectiveness, and provide transparency for better clinical and supply chain management. GS1 Standards provides solutions to improve patient safety and healthcare efficiency around the world. The research suggests that the healthcare industry can create significant value from the adoption of a single global standard, both in terms of business value and in terms of meaningful improvements in patient safety and quality of care

Introduction

Imagine a world where a patient’s records capture the brand, dosage, and lot number of each drug and medical device she uses, along with the name of the physician who ordered the product and the nurse who administered it; where bedside scanning confirms that she gets the right product in the right dosage at the right time; where hospitals and pharmacies know the exact location of short-supply medical devices and drugs and when they can be delivered; where regulators can recall adulterated products with accuracy and speed from every point in the supply chain; and where manufacturers can monitor real-time demand changes and shift their production schedules accordingly
In this world, patients would enjoy consistently safer and more effective healthcare, with fewer mistakes and shorter average hospital stays. Redundant activities and costs would be driven out of the system – reducing the cost of healthcare to society and enabling broader global patient access to cutting-edge medical technologies. Doctors and nurses could spend less time with paperwork and more with patients. Opportunities for innovation would open up by enabling new progress in personalized medicine, customized devices, and mobile health
To build a world of interconnected cost-effective healthcare, the healthcare industry could align around a single set of global standards that support the processes and capabilities required to achieve the kinds of benefits we describe. The consumer and retail industries have demonstrated the value of this kind of standards alignment with their adoption of GS1 standard barcoding, which has reshaped these industries and created billions of dollars in value. While new processes, tools and systems were required to deliver this value, usage of one single global standard was a critical prerequisite

  Global standards could help save thousands of lives

Global standards could be a critical enabler to improve the safety and quality of patient care in a cost-effective way. The analysis suggest that these standards have greater potential to improve care and save resources if they are truly global and adopted by all stakeholders, including manufacturers, distributors, wholesalers, pharmacies, and providers
Universally accepted methods for identifying products and locations and exchanging data could enable organizations to share vital information along the entire value chain, eliminating today’s broad array of custom data configurations, while improving compatibility and interoperability, reducing redundancy, preventing medication errors, enhancing visibility, and enabling seamless, automated information exchange among supply chain partners
The “Five Rights” are the cornerstone of safe medication practices. A complete and uniform definition for the “Five Rights” does not exist, but healthcare practitioners generally understand the essential meaning in the following way

Global standards could enable industry-wide applications and processes that support the Five Rights, improving patient safety and supply chain efficiency
Bedside scanning
Before administering medications, caregivers could scan barcodes on medications, patient wristbands, and their staff ID badges to conduct an automated Five Rights check. This simple process could eliminate thousands of errors and help prevent the use of expired and recalled medication and medical devices

Targeted full recall administration: An automated data capture process at medication dispensing points and operating rooms could use unique identifiers. Pharmacists, operating room staff, and caregivers could record the production identifiers associated with medications and medical devices administered to each patient. In the event of a recall, providers could promptly identify and contact each patient who received the product and remove every recalled product from inventory

Traceability of medical devices: Supply chain partners could use barcodes to track medical devices through the supply chain according to their risk category, and for the appropriate class of products, full traceability of medical devices could further enhance the processing of recalls and facilitate inventory management

Medication receipt authentication: Distributors, pharmacies, and hospitals could use barcodes to track and validate all medications against data from manufacturers and potentially other supply chain points, making it significantly more difficult for counterfeit and compromised products to reach patients

 Inventory management collaboration

Dispensing points, distributors, and manufacturers could seamlessly exchange medical device or medication usage, location and product availability information. Inventory planning and forecasting programs could analyze the data to optimize inventory levels, improve medication and medical device availability across the supply chain, and ensure that medical products are available at critical moments of treatment

 Transaction automation

Processes and systems can be automated, eliminating most of today’s manual data entry, validation and correction. Medication and medical device administration could be captured through barcode scanning and automatically fed into logistics, billing, and procurement systems that connect all stakeholders, including payers and registries
In the following, we will describe the impacts of global standards at the global level and for different stakeholders

Global standards can support multiple stakeholder needs

Global standards can be configured to meet a wide range of different stakeholder needs. Their implementation can be phased as appropriate for each participating organization
Identifying every product that may be sold, delivered or invoiced – and capturing data about that product at every point in the supply chain – is fundamental elements of global standards designed to enable participating stakeholders to identify and monitor each product from factory to patient. There are three basic categories in global standardization of supply chain data: product identification, location identification, and master data exchange

 Product identification

Unambiguous product identification is a foundation of global standards. In the GS1 system, it is achieved via the Global Trade Identification Number (GTIN). Trading partners who use standardized product identifiers can avoid errors in order to processing and financial transactions and reduce non-value-added work such as relabeling or over labeling of barcodes with their own inventory numbers. Organizations that use globally standardized product identifiers greatly facilitate internal accounting and processes supporting external reporting
Moreover, when products are barcoded, the standardized product identification can be captured automatically as the product moves through the supply chain, down to the point of use, which has many additional benefits. The barcode can be applied to secondary or primary product packaging, as well as higher packaging levels (e.g. cartons or pallets), and certain barcodes allow multiple data elements to be captured, such as GS1 Data Matrix, which can then support other benefits
• Globally standardized product identification with a barcode on secondary packaging can help streamline inventory management and other logistical processes, as products are scanned when they enter and leave stock rooms and warehouses. Coding lot numbers and expiry dates in barcodes can also offer important benefits, especially in recalls, which typically occur at a lot level. Capturing expiry dates can help distributors, pharmacies, and hospitals manage inventories to avoid product obsolescence and prevent dispensing expired products
• Serialization at the secondary package level can help providers identify specific packages of a particular product. Some pharmaceutical products already carry this serialization to help providers authenticate the product against a secure database, preventing the dispensing of counterfeits and keeping them out of the hands of patients. A few health authorities already require this, and some others are developing systems to enable it. Some manufacturers have implemented serialization systems voluntarily, aiming to reduce the counterfeiting of specific products in their portfolio, as a preparation for systems that would authenticate their products at the dispensing points. For medical devices, there is no general trend or regulatory requirement towards serialization; instead, a risk-based approach may be more likely. High-risk medical devices such as implants may be the most viable candidates for serialization as this would help facilitate recalls, for example, while lower-risk classes of products, such as gloves or syringes, may never be serialized if the cost to do so would outweigh the benefits
• Globally standardized product identification with a barcode on primary packaging may help prevent medication errors in hospitals and improve supply chain efficiency by increasing the visibility of true product usage. Each level of packaging could be identified by a barcode – something that only a few manufacturers are doing today. Barcode scanning when medications or medical devices are used can offer detailed, real-time insights into usage and demand that are valuable to manufacturers, providers and regulators. Although it is conceivable to add production identifiers like serial numbers to barcodes at the primary packaging level, thereby identifying each package individually, we are not aware of any manufacturer pursuing this approach

 Location identification

Location identification links to an organization’s name, address, and type. It can identify a functional entity such as a hospital purchasing department or pharmacy, a physical entity, such as a nursing station or loading dock, or a legal entity such as a hospital or manufacturer. A standardized and globally unique location identifier will precisely identify a location anywhere in the world
In the GS1 system, it is achieved via the Global Location Number (GLN), and the Healthcare Identification Number (HIN) in the HIBCC standard, although the latter only identifies human and animal health facilities, and healthcare practitioners. Location identification numbers provide links to the information pertaining to it in central databases, reducing effort to maintain and communicate this information between trading parties. This increases the efficiency, accuracy and precision of sharing location information, crucial to logistical operations. Location identification numbers are critical enablers to achieve traceability in healthcare and improve supply chain efficiency and visibility

 Data exchange network

A single source of product master data and a global registry could allow fast, accurate transmission of data from manufacturers to customers. The network could provide continuous, automated access for authorized parties and ensure that accurate, consistent product information is available among supply chain partners. This capability can streamline and accelerate business processes, improve accuracy in processing orders, and ultimately reduce cost. By incorporating clinical information into the master data, patient safety is also improved
The HIBCC system uses the UPN Repository, a form-based asynchronous database where users can upload and download product master data, hosted on the Internet. The GS1 system incorporates the Global Data Synchronization Network (GDSN), comprising a product registry, and interconnected third-party data pools across the world that synchronize data among authorized parties, and is accessed using GTIN and GLN identifiers
In a global supply chain standards system, product identification, location identification, and data exchange may provide the strongest synergies and maximum benefits when adopted together throughout the supply chain

Global standards: The system-wide benefits

Healthcare supply chain performance has significant space for improvement. Across the value chain, major pain points range from patient outcomes to supply chain efficiency, including the prevalence of medication errors, inefficient, ineffective product recalls, and bulked inventories. Global standards could help patient health and safety, as well as reduce key components of healthcare cost

 Reducing medication errors

Medication and device errors occur when a drug or medical device is not administered or used according to the “Five Rights” of medication safety: right patient, right route, right dose, right time, and right medication. The risks to patients include longer hospital stays, disability, and even death
Medication errors can occur at any point in the medication process, from prescription ordering (39%), to transcription (14%), dispensing (21%), and administration (26%). Many providers still conduct these processes manually, creating opportunities for human error. Many drugs have similar names, packages and abbreviations, and different dosage units and strengths. Manual record-keeping makes it harder for caregivers to anticipate potential allergic reactions and drug interaction issues. Given the many sources of potential error, the exacting nature of administering medications, and the workloads of caregivers, even the most diligent professionals can make mistakes
Medication errors sometimes lead to adverse drug events (ADEs) – injuries resulting from and related to the use of a drug. Injuries include any physical harm, mental harm, or loss of function associated with medication use. These can lead to thousands of patient deaths and millions of short- and long-term disabilities. These injuries are also financially costly

A global data standard can help substantially reduce medication errors

Clinical decision-making applications can suggest better dosing based on patient and product data, and avoid interactions

Computerized physician order entry (CPOE) can replace hand-written prescriptions with electronic orders to reduce transcription errors

Product ID scanning can eliminate confusion caused by similar-sounding names of different medications or devices, and unit conversions, reducing dispensing errors

Bedside barcode scanning can match the patient to the medication or device, preventing administration errors; and

Electronic prescription records, along with allergy checks and drug interaction programs, can reduce ordering and administration errors

 Canadian hospital integrates GS1 standards to reduce medication errors

Canada requires that pharmaceutical manufacturers add an eight-digit drug identification number to each product before it is sold. This number is of limited value to healthcare providers, however, since it is unique to Canada and often corresponds to a proprietary barcode or none at all. And while nearly all medications are marked with a GS1 GTIN at the bulk level, the hundred doses in a typical package may not be.In 2005, Doris Nessim, the Director of Pharmacy Services with North York General Hospital, a 434-bed hospital in Toronto, sought to reduce the risk of medication errors, streamline pharmacy operations and rationalize drug costs. As NYGH moved to implement electronic medical records, Nessim sought to incorporate closed-loop medication barcoding to enhance patient safety and optimize processes by integrating accurate electronic medication identification and documentation. Toward this goal, she began researching sustainable dose-level barcode strategies for the roughly 2,200 medications in the formulary
As she explains, “No healthcare provider comes to work wanting to make a mistake. And while some errors simply cannot be prevented with barcoding, the majority will be. Our goal is to make it easier for clinicians to do the right thing and harder to make a mistake. The right medication barcoding standard, content, symbology and strategy are critical to achieving this goal.Other industry experts agree. A director of process excellence at a medical device manufacturer points out that medication errors are likely to increase along with demands on staff productivity. Other pharmaceutical executives say that global standards are an essential part of reducing dispensing errors
Research by a VP of supply chain at another hospital estimated that manual data entry introduces errors in 15% of vaccine serial number records and about 7% of implant records, putting some patients at risk in recalls
In conducting its research, NYGH identified about 35 medication touch-points from procurement to bedside. It compared barcode types and considered how a barcode could be attached to each dose, how the pharmacy provided nurses with drugs, and how nurses administered the drugs to patients
Working closely with vendors and other internal and external stakeholders, the hospital concluded that each barcode would have to be unique, specific, and static, enabling Pharmacy Services to identify the product at each step in the process, from the point of inventory management to medication compounding and dispensing, and ultimately to administration
The only solution that met these criteria was the GS1 GTIN
The hospital adopted a process to barcode each dose of every medication. It began with an automated system to repackage medications into units of use, a barcode generator system and a hand-held scanner to ensure that each barcode will be readable and accurate at the point of dispensing and administration
In the absence of a national mandate for medication barcoding in Canada, hospitals are working with group purchasing organizations and patient safety advocacy organizations to adopt GS1 Standards and Services, including medication barcoding, to advance patient safety, improve operational efficiencies, and control drug costs across the country

 Improving recall efficiency and effectiveness

Thousands of pharmaceuticals and medical devices are recalled every year due to safety concerns, including contamination, wrong dosage or release mechanism, and process controls. The number of recalls has more than doubled in the last 5 years. On average, about 200,000 units are affected per drug recall and 105,000 units per medical device recall
Since the industry cannot generally track affected products across the value chain, today’s recall process remains largely manual and therefore inefficient, ineffective, and costly, causing waste and threatening patients
Without specific batch information, stakeholders throughout the supply chain must sometimes return all of the products, including unaffected ones, to manufacturers. The typical recall of a medical device can take up to about 2 man-days of effort in the hospital (involving various departments: procurement, logistics, medical physics), and in some cases more time, especially for implanted devices, where substantial effort is required to contact affected patients. Pharmaceutical recalls are less time consuming, taking at least 1-2 man-hours at hospitals, although in some cases it could take significantly longer. Retail pharmacies, while spending less time are also actively involved in recall processing. Manufacturers may spend up to a few man-months in executing a recall, and face losses due to product write-offs and in some cases compensation to their trading partners. In some extreme cases, such as in recent implant device recalls, a single event could cost millions of dollars in handling costs, product write-offs, and litigation expenses and damages
Moreover, despite extensive manual searches, not all recalled products are removed from the supply chain. Some overlooked products could remain in “private stock” of caregivers or in the hands of patients
Extrapolating this by number of healthcare institutes and organizations around the world, we estimate the global healthcare supply chain spends 130-270 million man-hours on recalls every year and misses 40-80 million device units and 90-180 million drug units
Implementing global standards could improve recall processing in three ways

 Labor savings: Clinical staff can spend less time on recalls and more on patients, improving care

Minimizing product waste: With better data and tracking, manufacturers will be able to target affected product batches at specific pharmacies, distributors and hospitals

Improving patient safety: With standard product identification and electronic medical records, hospitals and retail pharmacies might be able to pinpoint affected products and patients more quickly. Even if some affected products are missed during the recall process, bedside scanning synched to centralized product information could alert caregivers of recall status and prevent those products from reaching the patient

 Hospital speeds recalls, cuts waste and improves patient satisfaction

Dublin’s National Centre for Hereditary Coagulation Disorders at St. James’s Hospital manages patients with bleeding disorders, including about 200 with severe hemophilia
In the 1980’s, contaminated plasma infected some patients with HIV and hepatitis. To make matters worse, some of the contaminated plasma remained in inventories even after the recall, leading to more infections. In responding, the hospital focused on the supply chain, incorporating serialized global trade identification numbers (GTINs) for all hemophilia medications. The new cold chain connects the manufacturers, distributor, hospital and patient, allowing caregivers to monitor consumption precisely and manage the inventory in each patient’s refrigerator
Since the manufacturers of those medications did not use standardized barcodes, the codes had to be applied by TCP Ltd., the cold-chain distributor who delivers them to hospitals and patients’ homes. The initiative assigned a unique GS1 code to each patient, drug product and location, automatically linking and capturing data during the supply process, tracking each step of cold chain storage and delivery in real time, ensuring that the correct drug is prescribed to the right patient and automatically updating the inventory system to track patient consumption trends
St. James’s made barcoding and serialization part of their tender process, so the supplier applies them to each package. The hospital now knows exactly where to find each unit of hemophilia medication at any point in the supply chain—and can locate any batch of recalled product within 10 minutes—without relabeling. Patients are happy with a more reliable delivery service. Product wastage due to failure of cold chain conditions or documentation has been eliminated. About €5 million worth of medication has been removed from the supply chain, probably because patients no longer “over-order” and because inventory management is more efficient

 Protecting patients from counterfeit products

Counterfeit drugs represent a major and growing problem for public health and the industry. The WHO defines counterfeit drugs as follows
“A counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging
Counterfeit drugs may lead to low treatment effectiveness, increased medication resistance, adverse side effects, and even death. Counterfeit drugs also cut into manufacturers’ sales and government tax revenues. Drugs known to have been counterfeited include the cholesterol-lowering drug Lipitor, Avastin for cancer treatment, Serostim for low testosterone, biologics, birth control pills, and many others
Implementing global standards could help fight counterfeit medications, as serialization, traceability, and authentication would catch duplicative and unauthorized serial numbers and allow stakeholders to verify supply chain history for each product
Individual pharmaceutical firms have had some success in turning back counterfeiters. In 2005, for example, Pfizer began serializing individual bottles and cases of Viagra sold in the U.S. market. Since then, the company has not seen a breach in the legitimate U.S. supply chain for Viagra. Similarly, although Purdue Pharma’s painkiller, OxyContin, is a prime target for counterfeit activity, the company has not experienced a significant counterfeiting problem since its adoption of a standards-based security initiative
Countries have had successes. A track and trace system, along with “consumption notification” to decommission used serial numbers, has halted reimbursement fraud and counterfeit activity in Turkey, resulting in a significant economic benefit to the government

 Reducing inventory assets and associated costs

Without a clear picture of stock levels down the supply chain, manufacturers find it difficult to build lean and responsive supply chains with minimum stock, despite mostly low volatility of patient consumption in many disease areas. Without real-time usage data on their customers or patients, many distributors and providers must carry excess inventory to avoid product shortages. And hospital executives report that medical staff, anticipating drug or supply shortages, often keep a “private” supply outside of official stock locations, further complicating inventory management and recall efforts
Global standards may reduce those costs by enabling collaboration and data-sharing from factory floor to bedside: reducing inventory would free capital and physical space and taking the guesswork out of inventory planning could reduce inventory inflation without raising stock-outs
Inventory management in the healthcare industry is likely to become more challenging as product complexity rises and supply chains become more global. More products with a smaller quantity of each would raise demand variability and force players to increase inventory levels. The adoption of global standards and better collaboration along the supply chain could offer a living way to manage these challenges

 Reducing product waste due to obsolescence

Pharmaceuticals and medical devices that reach their expiration dates are considered unsuitable for use. Experience at leading organizations has shown much of this expense might be avoided along with optimized inventory levels and better inventory control enabled by global standards
A better view of down stream inventory levels would allow manufacturers to produce more in sync with consumption and reduce inventories. Visibility of lot numbers and expiry dates would help hospitals and pharmacies more easily manage the shelf lives of products in their inventories. Standardized product identification and a master data exchange via information-sharing networks with manufacturers would allow providers to minimize waste. Similar procedures in place in chemicals track unstable chemicals with short shelf lives, saving millions each year
By implementing global standards and collaborating across the industry, the healthcare supply chain can reduce product obsolescence by tens of billions of dollars. Studies have found that 20% of inventory assets at hospitals are discarded due to product expiry
Given that the highest levels of expiry and waste occur at hospitals, it’s not surprising that within these organizations we estimate the greatest potential for standardization. After establishing product identification standards and automation, US hospitals saw a 54-75% reduction in expired medication costs

 Reducing data management cost

For all players along the healthcare supply chain, the product catalog is a key to many daily operations, including procurement and invoicing, but it is also an important source of clinical information. However, many healthcare product databases today feature unique, incompatible numbering systems and data that must be input manually. Inaccuracy and inconsistency create issues for users and vendors. For example, the US Department of Defense discovered that hospital product catalogues had problems matching the correct manufacturer identifier for 30% of the medical devices they listed in their catalogue; at a leading US GPO, a single part number in the product catalogue linked to 9 identifiers and different products from different distributors
Without an automated information-sharing system, all players must invest a tremendous amount of time and labor to keep their product catalogues up to date with new product and pricing information. Despite these efforts, inaccuracies are prevalent, leading to erroneous transactions and the need for costly reverse logistics and canceled procedures because the right products are not available
A large health system in Asia replaced their procurement process with a solution that included a centralized product catalog with automatically synchronized data. In the first year, the new system saved $1 million by streamlining the data processing group’s work. After switching to an e-commerce based platform with GS1 standards, a large wholesaler in Australia improved their pricing and data accuracy to near 100% within just two months of implementation, leading to significant reduction in costs associated with reverse logistics
The healthcare supply chain spends 24-30% of administration time cleansing data and resolving order processing errors
Global standards together with a harmonized system of exchanging information between supplier and customers could greatly simplify data processing, reduce duplication of efforts, and improve operational accuracy. With unique product identifiers, numbering systems would no longer overlap and require cross-referencing tables. Automated data-sharing would remove the need to manually update disparate databases across the healthcare system whenever a supplier changes product information. And by using an authoritative source for product ordering, hospitals and pharmacies would see fewer erroneous transactions. Better data would help healthcare providers enhance patient safety. More accurate product catalogs would mean fewer procedure delays due to erroneous orders. It would also enable hospitals to provide more robust product information in reporting adverse events. With more complete information, health authorities could more efficiently conduct post market surveillance and monitor the safety and efficacy of drugs and medical devices

 The Netherlands move ahead on traceability standards

The Dutch government, looking to overcome the familiar challenges of serving an aging population with better medical care at a reasonable cost, has turned to GS1 Global Traceability Standards
GS1 Netherlands, is promulgating these standards to automate recall procedures, reduce obsolescence, stock-outs and associated delays in care, and shrink inventories while speeding ordering, delivery and billing and tracking costs and results more accurately
The organization also aims to protect patient health—estimating that almost 40% of cases of avoidable unintentional harm to a patient might be prevented. The groups points out that “missing, unclear, or an excess of information during treatment may cause unintended incidents and harm to patients”
The group seeks supplier-created barcodes that capture the GTIN, expiry date and batch or serial number. All of this information will link to software that supports business processes from supplier to each patient with a barcode on a wristband, and to each employee with a barcode on his or her ID badge. With these measures, the group explains, “it will always be clear which product has been used to treat which patient, and who is responsible”
The group’s objective is that by the end of 2012, all primary and secondary packaging will carry GS1 codes (GTIN, batch and/or serial number and expiry date, as appropriate), preferably in a GS1 Data Matrix
Many industry leaders have taken action. Medical device suppliers now using GS1 Standards for product identification in the Dutch markets. These savings correspond to cutting hospitals’ inventory by 20%, new inventory handling expenses by 25% and obsolescence by 80%

 Improving transaction accuracy

The healthcare industry is challeneged by complex transactions—including patient billing, charges, and returns—that demand costly resources and can lead to financial losses. Limited supply chain visibility can make these processes very inefficient and difficult to execute correctly
A global product identification system could help all parties significantly reduce transactional labor and costs. A platform that accurately identifies usage by automatic identification and data capture (AIDC) using primary package barcoding (or direct-part marking for medical devices) can help ensure that items are correctly billed to patients. Executives across the industry indicate that errors in financial transactions occur due to manual and non-standardized processes, and resolving such errors may take up to 20% of staff time in hospitals

 Conclusion

We have seen that global standards have the potential to enable patient health benefits, and help reduce healthcare costs. The healthcare cost could be reduced from reduced follow-on cost of medication errors, cost from improved inventory management, and reduced data management cost
The healthcare industry can create significant value from the adoption of a single global standard (GS1) for improvements in patient safety and quality of care. Global healthcare leaders have a window of opportunity now to work together to align around a single set of global standards and to collaborate to drive adoption of the practices enabled by these standards

Gs1 Solution to Combat Countefeiting and llicit

ماهنامه شماره3(آبان ماه 1394)

Introduction

This report focuses on combating to counterfeit and illicit trade and goods with the aim of how GS1’s global standards, services and solutions can play a vital role in illicit and counteracting problems through the global tracking and tracing. The report highlights key learnings on the implementation of track and trace from other industries and provides high level recommendations on how governments can effectively implement safe track and trace.
Tracking and tracing is developing rapidly in many sectors with pressure for greater visibility, confidence and transparency. With enhanced IT, the development of smart phone apps, and web-based interfaces which might allow anyone to play a role in verification, it is a field which is evolving across many consumer and industrial goods sectors.
The research highlights key trends and misleading practices and outlines how to secure global supply chains against the menace of counterfeit goods through greater visibility, traceability and transparency. It will further explain how existing GS1 Standards can assist in reducing the threats.

 Anti-counterfeiting GS1 standards and solutions

International cooperation and a sustained and focused approach is needed to tackle the rapidly growing counterfeit trade which is estimated to reach USD $1.77 trillion by 2015. While the extent and reach of the problem is well understood, reducing the risks and impact will require a global collaborative effort between industry and governments as well as the effective deployment of global supply chain standards.

Counterfeiting jeopardizes public safety, undermines legitimate businesses and harms national interests

• In November 2012, the South Korean government shut down 2 nuclear reactors after discovering more than 7,600 parts from 8 suppliers had forged quality certificates. The two reactors account for about 5% of South Korea’s national power supply. Their suspension will significantly reduce the amount of energy supply that South Korea holds in reserve each day during peak winter months in January and February

The World Health Organization views the counterfeit of medical products as a tremendous risk to public health

G20 member countries have an estimated 3,000 deaths annually due to counterfeit consumer goods

Legitimate businesses must compete with counterfeiters while brand owners and Intellectual Property Rights (IPR) holders face significant business and financial risks.

G20 member countries lose USD $77.5 billion in tax revenues while incurring an additional USD $25 billion increased cost of crime. An estimated 2.5 million jobs have been lost, increasing the annual cost of welfare

To a great extent the public view of counterfeit products is one of ambiguities, it is often seen as a victimless crime, which of course is far from the truth. This lack of appreciation of the threat of counterfeits actually encourages and supports its continued growth. The three major threats from counterfeits are

Consumer safety is jeopardized through counterfeit food, medicines, medical devices, toys, consumer electronics, alcohol, tobacco, automotive parts etc

Economic threat impacts business and governments – reducing the market for legitimate business and reducing revenue for governments – vat, duties and other taxes while increased cost for enforcement

  National Security is put at risk with counterfeit electronic components in military and defense equipment poses a national security risk

 Counterfeit products are penetrating into legitimate and highly secure supply chains

The increased globalization of trade coupled with the fact that in many countries the penalties for trading counterfeit goods are low or non-existent has encouraged the growth of global counterfeit activities, in many cases operated by criminal gangs and terrorists groups
For these reasons global solutions are needed to address the ever-growing threats presented by this flourishing criminal activity. In essence, current supply chains are not fit for the purpose in terms of their ability to protect and detect counterfeit penetration into legitimate and secure supply chains.

The Solution

GS1 is ideally positioned to play a key role in the development and deployment of Global standards, services and solutions to combat counterfeiting. Solutions to counteract the growing counterfeit problem need to be global in nature. This is where GS1 comes in and provides real and immediate answers to this growing problem.
GS1 is the only global not-for-profit organization assigned the trusted role of Issuing Agency for unique object Identifiers. This vital role is authorized by the International Standards Organization (ISO) who has allocated a block of Issuing Agency Codes (IAC’s) to GS1 ranging from 0 to 9. In accordance to ISO standards, no other organization shall be allocated this block of unique identifiers. GS1’s role as an Issuing Agency is to ensure allocation rules are defined; identifiers are registered, controlled and maintained to ensure global uniqueness.
As an Issuing Agency, GS1 assigns Unique Identification keys that support various industries with globally unique identification of objects including physical goods, logistics units such as pallets and containers, returnable assets, physical locations, services etc. Upon registration with GS1, a company is assigned a globally unique Company Prefix (GCP), which allows them to create any of the GS1 identification keys in support of their business and supply chain operations.

Essentially the global solution to the counterfeit problem starts with a foundational layer of globally accepted supply chain standards acting as building blocks to identify objects and then to capture the information about them at key points in the supply chain and then to share the information seamlessly among stakeholders.
The GS1 visibility framework pulls all of this together and provides the much needed foundational layers and building blocks that allow organizations to focus more on how to use the information rather than how to get the information. It helps to improve collaboration, traceability, transparency, security, and visibility in the supply chain.
A key component of the visibility framework enabling real-time sharing of supply chain event information is the application interface standard called Electronic Product Code Information Services (EPCIS), which is both industry and technology neutral. Real-time event management can play a vital part in helping to secure supply chains and reduce the risk of counterfeit penetration while goods are in transit.
Immediate benefits can accrue from the usage of existing global standards, services and solutions. They can be used by brand owners to provide customs and other market surveillance authorities with access to information which could help them to accurately identify objects and then route their verification query to the authoritative source for further authentication purposes.

 The Counterfeit Problem

Counterfeiting has changed from being largely localized operations into highly profitable global businesses with mass production, global sales, and complex global distribution networks. Counterfeit physical objects can be found in almost every country and in virtually all sectors of the global economy.
Counterfeits are often substandard and can pose serious health and safety risks, with an estimated 3,000 deaths annually in the G20 member economies. In 2011, the Paris-based Business Alliance to Stop Counterfeit and Piracy (BASCAP) estimated that the counterfeit and piracy market is growing annually at 22%.
According to BASCAP counterfeiting and piracy impact virtually every product category. The days when only luxury goods were counterfeited, or when unauthorized music CDs and movie DVDs were sold only on street corners are long past. Today, counterfeiters are producing fake foods, beverages, pharmaceuticals, medical devices, electronics, semi-conductors, electrical goods and supplies, auto and airplane parts as well as everyday household products.
Millions of fake products are being produced and shipped around the world to developing and developed markets alike at increasing rates, penetrating legitimate and secure supply chains. Consumers and patients are at risk from unsafe and ineffective products, while governments, businesses and society are being robbed of billions in tax revenues, income and jobs.
The drain on the global economy is significant and the longer-term implications of the continuing growth in this illicit trade are enormous. In 2008, the OECD has reported that “international trade in counterfeit and pirated products could be up to US$ 360 billion”. Taken together with the value of domestically produced and consumed counterfeits, the significant volume of digital and fake products being distributed via the internet, and the loss of economic development, harm to health and safety, reduced technology transfer, and innovation, the total magnitude of counterfeiting and piracy worldwide is estimated to be well over US$650 billion. The BASCAP report has used the OECD 2008 analysis and estimated the 2015 impact of USD 1.77 trillion.
A disorder of this magnitude undermines economic development, a sound market economy system and open international trade and investment. No legitimate business and no country is immune to the impact of counterfeit and piracy. No single business, business sector or country can fight this battle alone.
In order to ground this discussion, we have chosen to look briefly at a sector which more than any other has been successfully targeted by counterfeiters with dangerous consequence for patients and serious impact on the legitimate manufacturers of branded and generic medicines.

 The link between pharmaceutical counterfeiting, crime and national security

The World Health Organization (WHO) views the counterfeiting of medical products as a tremendous risk to public health. Pharmaceuticals purchased over the Internet are from sites that conceal their physical address, are counterfeit in over 50% of cases. While the risk of counterfeit medicines is low in developed countries, it remains a major global issue costing the pharmaceutical industry billion of dollars and the innocent people who take them their health or lives.
The deadly implications of counterfeit drugs are well understood to be a central challenge to the integrity of public health systems around the globe, as well as a direct threat to our individual health and welfare. What is less understood is that the profits from this sinister crime are increasingly being co-opted by an array of organized criminal groups and terrorist entities as a means by which to fund their operations around the world. As such, counterfeit pharmaceuticals pose a direct threat to national and international security

Combating the sale of illegal medicines online

Operation Pangea is an international week of action tackling the online sale of counterfeit and illicit medicines and highlighting the dangers of buying medicines online
Coordinated by INTERPOL, the annual operation brings together customs, health regulators, national police and the private sector from countries around the world
Activities target the three principal components used by illegal websites to conduct their trade – the Internet Service Provider (ISP), payment systems and the delivery service
The operation has gained significant momentum since its launch in 2008. The first phase of the operation brought together 10 countries, with the number rising to 100 in 2012
Results from Pangea V from September 25th to October 2nd 2012

3.75 million illicit and counterfeit pills confiscated

Estimated value: USD 10.5 million

More than 18,000 websites shut down

•133,000 packages inspected by regulators and customs authorities, of which around 6,700 were confiscated
• 80 individuals are currently under investigation or under arrest for a range of offences, including operating a clandestine laboratory producing counterfeit medicines; membership of a criminal group selling illicit medicine online; and operating websites selling illicit medicines
The usage of GS1 Standards, Services and Solutions could assist in building the very basic level of trust between buyers and sellers online. Trust can be added with verifiable source information about the seller, the products and methods to authenticate the products once received by the buyer

  Trends in Counterfeiting and Deceptive Practices

Counterfeiters will use every means possible to deceive authorities and their customers. The following are known trends and deceptive practices
Trends and Deceptive practices

 Unbranded physical objects are shipped separately from their labels, insignia and brand packaging

Counterfeiters specializing in producing either counterfeit labels, insignia or consumer packaging export these products to assemblers who complete the final assembly of the counterfeit objects

Counterfeit components or sub-assemblies are shipped separately to Free Trade Zones (FTZ) to be assembled and distributed within the FTZ or to countries outside the

FTZ

 FTZs are used to mask the origin of counterfeits

Part of a genuine shipment or container/pallet of goods are replaced with counterfeits (i.e. genuine and counterfeit co-mingled)

Sales on the Internet of counterfeit goods indicated as excess, over-stock or returns

Consumer-to-consumer (C2C) sales of counterfeit products take place both online and offline

Differences and gaps in local laws, regulations and enforcement ability are taken advantage of to keep as many stages of counterfeit activities from being shut down for as long as possible, exposing lower level traffickers to legal ramifications

 Increasing use of the Internet as a sales channel

Increasing use of legitimate courier and regular post for small packages, making it more difficult for enforcement to curtail such activity

4. THE SUPPLY CHAIN CHALLENGE

  Current Supply Chain

The existing supply chain in many sectors is not fit for purpose in terms of its ability to cope with the challenge of the growing counterfeit problem. The shortcomings are due to the fact that current supply chain processes are based on legacy systems, which in the past were heavily dependent on paper flows. Although there has been adoption of AIDC (ie. the barcode or RFID tag) and EDI technologies, the solutions deployed, with some notable exceptions, have not included global standards for unique object identification, traceability and event management as core components and therefore visibility across the extended supply chain is often low.
The evidence to support this is the poor recall capability of US and EU food manufacturing companies as reported by AMR Research in 2007.13 The research found that 67% of Food Companies with USD$5 billion or more in sales had recalls that cost USD$20 million or more, that it took on average of 42 days to complete the recall process and that at best they could only locate 43% of affected products in the most serious category of recall. Counterfeit products can be the cause of a serious recall – given this reality it spells out the need for greater transparency and visibility of supply chains in order to enable effective object identification and authentication processes to counteract the increasing threat from counterfeiters
GS1 and industry worked on solving this problem and a new global messaging standard for product recall was ratified in June 2012. The accompanying online recall notification service operated by GS1 organizations on behalf of industry in USA, Canada, Australia, New Zealand and South Africa reduces the critical time to communicate the recall or safety alert to all supply chain stakeholders including government to less than 1 hour. The standard and the services taken together, reduce risks to business and to consumer safety

  Proprietary solutions are not the answer

In recent years numerous proprietary solutions for object identification, authentication and secure supply chains have been developed mainly in isolation from each other
They lack the critical interoperability required to ensure that all supply chain partners can readily deploy them. In particular, to be effective across the he multi-tier supply chain it is vital that all parties have a common globally unique object identification and data sharing standard which can be easily managed within their internal systems and with their trading partners
While there is no single method to guarantee the identity and authenticity of physical objects across industries, unique object identification coupled with added security deterrents is a requirement in certain industry sectors. But these are components of a much wider brand protection strategy

What is needed then to address the challenge

The answer is enhanced supply chain visibility with improved traceability and transparency along the entire supply chain and, most importantly, solutions that are based on open, interoperable global standards which facilitate widespread and cost effective deployment. Fortunately, GS1’s global identification system includes globally unique identification for products, assets (objects) and locations as well as its standards for capturing and sharing visibility and traceability data between supply chain partners and other key stakeholders
This foundational level of identification standards is ideally suited to supporting solutions which are needed to secure supply chains and provide effective means of identifying and authenticating an object in real-time in order to ensure that counterfeits are detected before they cause harm to consumer, businesses or national interests. The GS1 Visibility Framework discussed in more detail in section 6, combined with other process standards, such as the GS1 Traceability Standard (GTS) and the business- messaging standard for Product Recall, become very powerful tools to enable safe and secure supply chains

Safe & Secure Supply Chains

Developing and deploying safe and secure supply chains is critical not only to mitigate the risk of counterfeits, but to increase trust and transparency into trading partner relationships. The foundation layer for building safe and secure supply chains can be effectively addressed by deploying the GS1 Visibility Framework Safe and secure supply chain framework

 Industry Use Case

The EU Falsified Medicines Directive which seeks to have a more secure supply chain for the distribution of prescribed medicines requires serialization of patient packs as well as tamper evident labelling to enable authentication of medicines prior to their being dispensed to patients. EFPIA (the European Federation of Pharmaceutical Industry Associations) has developed and successfully piloted an authentication solution based on GS1 automatic identification and data capture standards as well as the use of EPCIS for the operation of a federated database which ensures that a retail pharmacy can check the authenticity of a medicine before dispensing to a patient. GS1 global office and the EFPIA issued a joint vision statement for achieving the EU regulatory requirements
A practical example of real supply chain visibility, albeit on a small scale, is already working since 2005 and has demonstrated the ability to authenticate a product prior to use and ensure a total recall of products across more than two hundred locations within 10 minutes
The NCHCD (National Centre for Hereditary Coagulation Disorders), which has responsibility for the safe treatment of haemophilia patients in Ireland has achieved 100% compliance with National and EU regulations. Furthermore the solution although originally implemented only for patient safety and compliance reasons has resulted in very significant financial savings including an annual ROI of more than 100%, a reduction in stock levels of €5m, and other benefits

Object Identity – which object and what is it

Object identity at the consumer and retail level

At the retail level, the process to verify an objects identity such as a consumer product should start with the physical and visual inspection of the object itself. The integrity of the outer packaging and the presence of brand insignia, labels including a barcode with GTIN are vital clues to aid in the object verification process. A consumer should normally direct queries to the retailer before purchasing a product. With online purchasing and gifts, this process is not always possible and the consumer may need additional tools to verify the identity and authenticity of the product
A consumer should always try to contact the brand owner through a verified website or customer service phone number if any doubt exists about the object
Many standalone websites and smart phone applications exist today that claim to provide information about products including product descriptions, features, nutritional information, pricing etc. etc. However, many of these sources may not be linked to the trusted product master data owner by the product brand owner. Recent studies have highlighted that the accuracy of mobile scans for product information is very low. GS1 is working with industry to solve this problem with GS1 Source
GS1 Source is a framework for sharing product information in consumer-facing digital channels. It is standards- based, scalable and interoperable. Companies can use GS1 Source to share information about their products in the cloud. Application developers can then integrate this product data in their web and mobile applications
In 2012, GS1 ratified it’s Trusted Source of Data (TSD) 1.0 Standard

 Object Identify for Customs and Market Surveillance

If a customs officer or market surveillance agent has a consumer product, box of products, a pallet of goods or container with several pallets under review or inspection, the agent may need to find “identity” information about the products and shipment. This can be achieved by using GS1’s Global Electronic Product Information
Registry or GEPIR www.gepir.org
GEPIR is a unique, internet-based service that gives access to basic contact information for companies that are members of GS1. These member companies use GS1’s globally unique numbering system to identify their products, physical locations, or shipments. By using the information on the product or its’ packaging, and typing the numbers into GEPIR, anyone can find the legally registered owner of that barcode identifier and their contact information. Physical location numbers such as GLN’s and Serialized Shipping Container Codes (SSCC’s) can also be used as search criteria. This is the first and arguably the most critical phase of object authentication
Reasons why the object identifier would not appear on GEPIR includes

Incorrectly entered Object Identifier

Illegal usage of the Object Identifier – company using GS1 system but not registered

Object Identifier on a secondary label on the object or packaging and was assigned by the importer who is not registered with GS1

Counterfeit or fake Object Identifier – GEPIR may return a different company than that on the object. The brand owners website or customer service should be contacted ASAP if doubt exists about the identity of the physical object under review or inspection. Brand owners will generally have multiple brands within their portfolios

National security and privacy – manufacturers may be subject to national security or privacy guidelines and their product and/or company details may not be available online. GS1’s global standards also defined a Global Product Classification Code or GPC. GPC is a structured; rules based classification system that gives buyers and sellers a common language for grouping products in the same way, everywhere in the world. The official (normative) GPC schema and GPC Browser information is published in Oxford English. Both the schema and the browser information are translated to other languages

GPC is an invaluable tool for brand owners to categorize, register and share object master data with all trading parties. It can also be utilized by market surveillance to verify object identity and by customs for pre-import risk assessment. One government agency assessment of an objects GTIN plus it’s GPC highlighted a potential 80% reduction in import holds while freeing up officers for more targeted inspections of high risk goods

Is Object Authentication Genuine

Brand owners may provide various online, mobile, field or lab based applications and tools specifically for the purposes of authenticating a product. After verifying the object identity, the next step is to determine if the object is genuine
Authentication of an object will depend on who is in the role of the object inspector and their knowledge of the product (object) and its authentication process and procedure. The inspector may have access to very limited or very detailed brand protection information, which may be simple or complex; depending on the objects value, complexity and intended usage

 Methods commonly used for Object Authentication

  Extrinsic Authentication Tools

Added for the primary purpose of authentication
Sensory tools

 Overt (obvious)

 Covert (hidden)

Forensic (lab or field analysis) Digital tools

Object Serialization # (SGTIN)

Object Identification # (GTIN)

Intrinsic Authentication Tools

Functional or aesthetic elements of the product not primarily intended for authentication
Could include

Specific materials

Unique construction features

Stitching

Hybrid Authentication

Combination of Digital & Sensory and/ or Intrinsic & Extrinsic tools for enhanced brand protection purposes
Could include

(s)GTIN+ Forensic feature

(s)GTIN + Overt seal, label or hologram

(s)GTIN + Intrinsic feature + Covert mark

(s)GTIN + Covert feature

  Building Interoperable Authentication Services

With the massive growth in counterfeiting across all industry sectors, there is an increase in the number of solution providers with proprietary solutions as well as in-house developed solutions by brand owners. The need for interoperability is well known and GS1 is participating in the ISO technical committee (PC247) and working towards a first draft in 2013. Key to solving interoperability is a global standard and global infrastructure to enable it.
The recently ratified industry standard called Object Naming Service (ONS) facilitates the need for interoperability of object identification and can enable interoperable authentication services. ONS offers a pragmatic and feasible strategy to address this growing need. Existing and new solution providers could openly compete and innovate with their services with ONS providing interoperability and routing to the authoritative source and service end point for the brand authentication information.
Brand owners or their solution providers retain full control of their authentication services including access rights and privileges, overall security, hosting, and user requirements
The service located by ONS could also be used to query blacklists, a record of cloned or compromised authentication codes, making it easier and faster to detect counterfeits. Generally, ONS is about the successful discovery of relevant and trusted data and services associated with a GS1 Identification Key. At its simplest, a GS1 identification key such as a GTIN, SGTIN or EPC can be used to look up data and services configured by the company that assigned it. This can be a very powerful tool for all stakeholders in the supply chain, including the manufacturer, distributor, importer, customs, retailer, market surveillance, and even the consumer

GS1 ONS Discovery Topology

 GS1 AND ITS ROLE IN SUPPORTING PRODUCT AUTHENTICATION AND TRACEABILITY SYSTEMS

The GS1 System is an integrated suite of standards, services and solutions that provide organizations of all sizes with a common language, enabling them to communicate and interoperate seamlessly as they do business. They are the most recognized, utilized and trusted supply chain standards in the world and include the ubiquitous barcode, which generate over six billion beeps at retail point-of-sale (POS) across the world on a daily basis
GS1 Standards play a vital role in providing the critical links that build trust and transparency for business partners worldwide, from the raw material supplier through to the consumer
By adopting GS1 Standards as the foundation for business processes and interoperability, companies of all sizes can speak a common language and leverage the power of information for the benefit of their businesses. Diverse industries are able to adopt them easily and can deploy GS1 Standards to transform the way they do business, following in the footsteps of industry leaders who have already developed industry best practices
GS1’s global standards for identification of products, locations, and the communication of data associated with each should form the basis for a company’s anti-counterfeit protocols and brand protection strategies. Specifically, the GS1 System will enable globally unique object identification to be used in conjunction with multiple authentication systems and tools
GS1’s Global Traceability Standard defines how industries should maintain complete traceability (Track and Trace) of all products from raw material to finished products and their movement along the supply chain

 THE GS1 VISIBILITY FRAMEWORK

The GS1 Visibility Framework allows organizations to focus more on how to use the information rather than how to get the information. It helps to improve collaboration, transparency, efficiency, security, and visibility in the supply chain. A key component of the Visibility Framework that enables real-time sharing of information is the application interface standard called Electronic Product Code Information Services (EPCIS), which is both industry and technology-neutral. It was created and designed by industry to fi t within existing enterprise and security environments, supplementing existing enterprise information systems. It reduces complexities and the costs of systems integration while facilitating improved trading partner collaboration and visibility
EPCIS enables supply chain partners to store and share physical event data including the what, when, where and why about physical observations (events), independent of the technology used to capture that information. This allows companies to associate and share additional information, or events, relating to an object’s identity. For example, companies can associate information such as the time and date that a barcode was scanned or an RFID tag was read, the location of that scan/read, and whether the object was being shipped or received. Information that can also be related to the object includes temperature, associated purchase orders, and the business reasons for why the object moved. This additional information can be associated in an EPCIS database or repository. Having this granularity of information provides organizations with real-time visibility of objects inside an enterprise or across the supply chain between trading partners. This, in turn, enables companies to realize the full benefits of auto-identification, by making use of the information that has been captured

CONCLUSION

The increasing level of counterfeit activity in all sectors poses a challenge to industry and governments around the world
One of the key underlying causes of the successful growth of counterfeiting is the inability of current supply chain systems to effectively counteract this criminal activity The solution is in greater visibility, traceability and transparency across supply chains from raw material to point of sale/use. Fortunately GS1 and its interoperable standards services and solutions are capable of supporting industry and government agencies to put effective solutions in place to tackle the problem
Applying GS1 standards, services and solutions as a foundational layer and building blocks is an effective starting point to reduce the serious and significant threats posed by counterfeiting