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Why Is Traceability Important In The Pharmaceutical Industry?

Consumer health and safety is the fundamental responsibility of a pharmaceutical company. A major threat to the industry’s credibility is the rampant circulation of counterfeit products. To avoid this, the pharmaceutical supply chain is one of the most heavily regulated supply chains in the world. 

Each aspect of the product development life cycle, from raw material procurement to delivery of the product to vendors and ultimately to the patients is subject to high levels of scrutiny through regulations and quality control standards. GMP Guidelines in the pharma industry are one among many such regulations. Manufacturing high-quality products while maintaining compliance with strict local and global regulations using conventional methods is beyond the bounds of possibility. ERP Life science solutions now provide a way of automating this extremely complex workflow. One of the key aspects of pharmaceutical supply chain management is traceability. Let’s understand what this is and why it is important in the pharmaceutical industry. 

Explore SAP ERP for Pharmaceutical Organizations

What Is Traceability?

As the name suggests, traceability is the capability to trace something. It is interpreted as the ability to verify the history, location, or application of an item by means of documented recorded identification. Other common definitions include the capability of (and implementation) of keeping track of a given set or type of information, or the ability to chronologically interrelate uniquely identifiable entities in a way that is verifiable. Traceability is applicable to supply chain, measurement, software development, healthcare, and security.

Building Blocks Of Pharmaceutical Traceability 

The Drug Quality and Security Act (DQSA), was enacted by the United States Congress on November 27, 2013. Title 2 of DQSA, The Drug Supply Chain Security Act (DSCSA), outlines steps to achieve an interoperable system by electronically tracing products at every level to identify and trace prescription drugs as they are distributed in the United States. 

The main aim of this act was to enhance FDA’s ability to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or in any way harmful. As such, the DSCSA has set off a series of changes for companies all along the pharmaceutical supply chain. According to the act, by November 2023 a unit-level traceability system is expected to be in place. 


GS1 US defines traceability in healthcare as the process “that enables you to see the movement of prescription drugs or medical devices across the supply chain. You can trace back to identify the history of transfers and locations of a product, from the point of manufacture onwards. You can also track forwards to see the intended route of the product towards the point of care”. 

The DSCA has defined an end and now it is the responsibility of the trading partners to figure out how they’re going to meet those requirements to achieve the means to that end. To understand the basics of what needs to be done to achieve the levels of traceability laid down by the DSCSA, let's look at the three major keystones of traceability, 


The first part is serialization which refers to the establishment of a unique identity for a drug product at the smallest saleable unit across one or more packaging levels of that product. 

Track and Trace 

Tracking is oftentimes looked at as a forward view - where the product is right now, and capturing the information as it moves through the supply chain. Tracing can be more of a historic view - where the product has been, or who has owned it. Tracing helps us understand changes of ownership and allows us to go back to a certain point in the product life cycle. 


After establishing a unique identity to a product and traceability of transactions associated with the product, it is imperative that the system verifies information about the products and transactions at one or more places in the supply chain. Verification is more about regulation, and laws will have requirements to verify the serial number and transaction history of the products. 

Benefits of Traceability In Pharma 

It is critical to have a system that can record data at every stage of the production process. Aside from providing real-time insights into the manufacturing process, traceability also offers other benefits such as, 

  • Implementing processes required to ensure regulatory compliance becomes much simpler with a traceability system in place since it helps perform audits at different stages. 
  • It allows the organization to recall specific products in case a non-conforming event comes to notice. 
  • Incorporating traceability processes within a workflow can improve stock control since it assists in reducing scrap, managing expiring stock, and consequently improving profitability. 
  • Having a traceability system in place also works as a value-add leading to better working relationships with suppliers and customers. 

Final Takeaway 

Brian Daledien, VP of Industry Marketing, Tracelink, defines traceability as “the information about the products and their journey - from inception to the patient”. In the pharmaceutical industry, traceability has three main benefits; it increases supply chain visibility, improves quality control systems, and reduces the risk of introducing counterfeit medication into the market. As suppliers are solely responsible for the end product, traceability is incredibly important for a number of reasons. 


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