Frost & Sullivan: First, can you help us understand mass serialisation. It seems to be a concept that we hear about often, but there is a lack of understanding in terms of its potential benefit to the global pharmaceutical industry.

Gary Noon

Gary Noon: Yes of course. Mass serialisation is not new; in fact it has already been adopted to great levels of success in several countries and across several industries, such as food and beverages, timber, and alcohol. In essence mass serialisation is the process of uniquely numbering individual sales packs. These unique numbers then unlock the key to authentication processes that can validate drugs at critical points in the pharmaceutical supply chain. The significance of this is that it allows pharmacists to check a product at the most critical point – just before they are dispensed to the patient to ensure they are safe for use and legitimate.

One of the main reasons and drivers behind the adoption of mass serialisation for the pharmaceutical industry is that it has a direct effect on ensuring the safety of patients - a goal that all stakeholders are ultimately looking to achieve.

Frost & Sullivan: How prevalent is the counterfeit drug trade today, and what is the impact on the overall public health and safety?

Gary Noon: The short answer is that the counterfeit drug trade today is growing year on year has a huge impact on the safety of patients right across the globe.

If we look at the issue in more detail, in the last 5 years, 27 cases of fake drugs have been recorded in the EU's legal supply chain and a further 170 from illegal distribution channels .The World Health Organisation (WHO) are now estimating that 10 per cent of the global medicine supply may be counterfeit and as the incidences of counterfeit medicines get bigger the risks posed to patients also increases.

EAASM – The European Alliance for Access to safe medicines have just published a report where they identified 62% of the medicines they had purchased on line were fake or substandard. The results speak for themselves, patient safety is being affected.

Frost & Sullivan: Considering the benefits posed by mass serialisation, where are we today in terms of adoption of acceptance and programmes?

Gary Noon: It is encouraging to see that there has been some good headway made across the industry. But unfortunately individual pockets of activity are not enough to make a real difference. The biggest issue as I see it is that the effectiveness of mass serialisation as an anti-counterfeiting measure will be limited if it is confined to just a few countries and individual stakeholders.

That said, it is encouraging that the handful of European countries that have fully implemented programmes including Belgium, Italy and Greece and there are also some encouraging signs in other markets such as Germany and France. Similarly in the US some early progress has been made with the roll out of a voluntary electronic track and trace programme – the "e-Pedigree" system but numerous holds ups and delays have to date restricted the success of the programme.

Frost & Sullivan: Why has the industry been so slow to adopt mass serialisation?

Gary Noon: As I have said there has been some good take up in pockets across Europe, but widespread adoption will take time especially since individual stakeholders and countries have to recognise and understand the benefits it will make for their own market and individual needs in order to want to adopt.

There are some major stumbling blocks which are having a real impact on adoption such as

• Complexity of the pharmaceutical supply chain
• Growth in internet and on-line pharmacies, which create unique problems
• The continued existence of different technical preferences and infrastructure issues that limit applications on a widespread basis
• Inconsistencies in guidelines and funding priorities from federal, NGO and other regulatory bodies
• A lack of clarity on ultimate responsibility for patient safety
• Financial costs of implementing mass serialisation programmes

What is important to note is that while these factors create barriers, they shouldn't stop or inhibit adoption as working together the industry can help to find solutions.

Frost & Sullivan: Interesting, can you expand on the first point you made? Why does the nature of the supply chain complicate matters?

Gary Noon: The distribution chain in the pharmaceutical industry is highly complex. From the moment that a medicine leaves a manufacturer's facility, it may change hands up to 20 times before reaching the patient. It is strange to think of medicines as commodities such as other goods but this is entirely legitimate under European Law relating to the free movement of goods. Mass serialisation can simplify the process by checking the product at the point at which it matters, just before it reaches the patient. Doing so will help to untangle the increasingly complex manufacturing and distribution system that currently operates.

Frost & Sullivan: In your view then, who is ultimately responsible for patient safety?

Gary Noon: It is my opinion that no one individual is responsible but that the liability for patient safety extends to all in the value chain. Ultimately, national Governments have an overarching responsibility to accelerate the adoption of solutions but it is up to each and every player to work together so that the industry as a whole can put an end to the problem.

The challenge we are faced with however is converting collective responsibility into concerted action and as a company we are committed to working together with industry players and partners to help to achieve this.

Frost & Sullivan: Is there a case study of a programme or country that has successfully implemented a mass serialisation programme, and what can we learn from this experience?

Gary Noon: Yes there is, let me share with you what Belgium have been doing.

In Belgium, the government introduced mandatory mass serialisation for pharmaceutical products in 2005. Law "EN 011934" compelled pharmaceutical manufacturers to label each individual product with a unique serial code. Whilst the original aim was to reduce the level of reimbursement fraud, several of the large pharmaceutical companies, including Eli Lilly, Solvay and Merck together with Aegate have recognised the associated advantages with adding in authentication to include improved patient safety and increased brand protection.

Pharmacists scan a unique code to authenticate each product before dispensing, with any anomaly reported within less than a second via an internet connection. In this way, pharmacists are able to protect their customers and themselves from the dangers of sub-standard medicines. The possibility of integrating further advice and information also allows the dispenser and the pharma company to offer advice and support to patients. Indeed, the roll-out of Aegate's service in 2007 has been embraced by pharmacies. Up-take exceeded 50% in less than a year.

I believe that the successful interplay of three critical factors is well illustrated in Belgium. Here, government legislation has driven the industry to comply, and in addition, pharmacists have had readily available technology to scan and check item level codes. The benefits are clear:

• Prevention of reimbursement fraud
• In partnership with various stakeholders; software companies, pharmaceutical companies and the professional pharmacy association, patient safety is being protected
• Counterfeit and other substandard drugs are prevented from reaching the patient.

Frost & Sullivan: A programme such as this seems expensive, can you help us understand the cost of implementing mass serialisation programmes?

Gary Noon: When thinking about costs it is worth considering that best practice examples from other industries (notably the food, automotive and beverage sectors) illustrate that mass serialisation can successfully be deployed cost effectively and to the benefit of all stakeholders. Frost & Sullivan's research illustrates that the cost of deployment of an authentication solution need not be prohibitive. However, the investment required to implement track-and-trace technologies is estimated at over €400 million per single supply chain amounting to a total €10 billion investment for the European Union.

Frost & Sullivan: If we don't adopt mass serialisation what is in your opinion the worst that could happen?

Gary Noon: If consumers don't feel that the medicines they are taking are safe and have been checked before being dispensed that they will abandon taking prescribed drugs because they are worried that the risk of taking them will outweigh the risks of not. Of course this is worse case scenario, but with recent figures reporting that the total sales of counterfeit prescription medicines will reach $75 billion globally by the end of the decade it is an extremely possible risk all the same. The European Commission recognises these increasing figures, which is why earlier this year proposals outlined stricter inspection regimes for drugs, including additional security measures to drive the need for better control over drugs and a safer environment for patients.

Frost & Sullivan: It seems that you and Aegate have a very deep understanding of the issues here, and can play a key role in the advancement of patient safety. Can you please elaborate on Aegate and the solution you are working on today?

Gary Noon: Aegate's focus is patient safety communications. Having extensively tested the system in both Europe and the USA, we launched the fully operational system in Belgium in 2007.

We have two key areas of focus; prevention of fake or substandard medicines from reaching patients, not just counterfeits but recalled, or expired medicines. We probably have the most rapid medicines withdrawal system available, with a recall implemented in a matter of minutes and the very next relevant product to be dispensed will be stopped. The system in fact freezes the pharmacy software until the pharmacist acknowledges they have seen the information.

Secondly the communications system can be used by companies to notify pharmacists and patients of product changes such as pack or formulation or tablet colour for example, important as some patients become concerned if their usual medication is different. This unique communication enables the pharmacist to be prompted to advise the patient when the company feels it is important. This also applies to products where there are known issues with patient compliance for example.

Frost & Sullivan: Finally Gary is there anything else you would like to add today?

Gary Noon: As a company we are committed to playing a role in patient safety and have a workable solution available now that enables the necessary collective responsibility to be taken. We see delays in some countries in taking up the key to unlocking this system (mass serialisation) because people worry about which sort of technology should be applied – should it be a linear or 2D barcode or even RFID. The technology is actually less relevant than people believe; it is the application of the technology for patient safety purposes that is important. Ensuring it fits within existing working practices will achieve successful adoption, which is entirely possible, as we have already been able to demonstrate in Belgium.

Thank you for your time.