A Closer Look at the Track and Trace System

Essentially, the Track and Trace system is a logistical technology designed to track and locate a specific drug throughout its journey in the supply chain.

• The system has been in the planning stage for nearly a decade and its implementation for pharma exports was decided recently (in April 2023).
• The system encompasses manufacturing data for traceability. The barcode on the packaging serves as an identifier, helping to trace the source and prevent any malicious tampering.
• One of the key expectations from this system is to tackle the issues related to the production and sale of fake products and challenges related to product recall.
• The recent extension was granted based on a request from the Pharmaceuticals Export Promotion Council of India (Pharmexcil) to the commerce ministry. The council cited difficulties in integrating with the system as the reason for their request.
• Various issues, including the outbreak of the COVID-19 pandemic , were among the reasons for this extension.
• The DGFT notification highlighted the extension of the Track and Trace system's implementation for the export of drug formulations. This is in relation to maintaining the parent-child relationship in packaging levels and its uploading on the central portal until 1-08-2023.
• To facilitate seamless integration, the centre has also provided a grant of ₹25 lakhs for barcode machinery to small-scale industrial units.
• The Track and Trace system will enhance product traceability and reinforce good manufacturing practices. Pharmexcil has assured that there will be no further extensions or delays in the system's implementation.
• Initially, the system will cover secondary and tertiary packaging. The inclusion of primary packaging will be considered at a later stage.

Advantages of the Track and Trace System

The Track and Trace system for pharmaceuticals brings several benefits, including:

• It can play a significant role in preventing the entry of counterfeit drugs into the supply chain.
• It can enhance efficiency in drug production and sales.

However, there are a few challenges that need to be addressed for successful adoption of this system:

• Absence of universal standards
• Security concerns as barcodes can be easily manipulated
• Certain pharmaceutical companies argue that this system could potentially slow down the production process and escalate costs

Performance of the Pharma Industry in Exports: Despite the adversities posed by the conflict between Ukraine and Russia and the surge in raw material prices, the pharmaceutical products export witnessed a growth of over 3%, reaching $22.90 billion in the financial year 2022-23. The export is projected to touch $25 billion by the end of FY23, although it falls short of the initial target of $27 billion.