Pharmaceutical Track and Trace Lecture Series – An Introduction to the Taiwanese Medicinal Products Traceability System

The first speech for the “Pharmaceutical Track and Trace Lecture Series” was co-hosted by National Yang Ming Chiao Tung University School of Law and the Center for Digital Governance and Legal Innovation on October 20, 2022. The speaker was Yang Po-Wen, the Section Chief of the Division of Medicinal Products, Taiwan Food and Drug Administration (TFDA).

The title of Mr. Yang’s speech was “An Introduction to the Taiwanese Medicinal Products Traceability System.” Under the Taiwanese Pharmaceutical Affairs Act, pharmaceutical companies must obtain a drug license to engage in drug manufacture, distribution, or marketing. Pharmaceutical firms should file an application with the municipal or county (city) competent health authorities for approval and registration, and can only start operations after having paid the license fee and having obtained the business license. For the manufacturing and import of drugs, information concerning the ingredients, source of active pharmaceutical ingredients, specifications, functions, summary of manufacturing process, and the specification and method of testing, as well as other related information and certificates, accompanied by labels and use instructions in the original and Chinese languages, and samples, together with the fee paid, shall be filed with the central competent health authority for registration and market approval. Pharmaceutical firms also have to meet standards for good distribution practice (GDP) and good manufacturing practice (GMP), and be monitored in the traceability system established by the TFDA.

The main purpose of the enhanced drug traceability regulations aims to protect the pharmaceutical supply chain from counterfeit medicines and prevent illegal activities. These regulations and policies enhance the effectiveness of drug distribution management, keep track of sales inventory, and could make drug recalls more effective. Pharmaceutical firms have to meet GDP and GMP standards to ensure medical devices and pharmaceutical products meet quality standards and standards for robust recordkeeping. Companies are required to meet hardware standards, establish a complete internal system, and establish their own standard operating procedures to ensure the sale and supply of drugs are legal. This not only ensures the legality of drug distribution, but also integrates upstream and downstream pharmaceutical firms.

There are two dominate pharmaceutical track and trace systems: the first is the “point of dispensing verification” system, it uses serialization to verify the authenticity of a product, and can immediately trigger an alert if anything is amiss. However, the use of barcodes for each batch of drugs would increase the cost of manufacturers and may cause manufacturers to be reluctant to enter the market. This type of system is implemented by the EU and most of its member nations. The second system is the “full track and trace” system, which requires participating firms to file the status and information relating to the drug throughout each stage in the supply chain to comply with regulations. This system allows the whole supply chain to be more integrated, and allows the system to be more functional, such as monitoring drug recalls and stock management, sales inventory, etc. On the other hand, it is more costly than the “point of dispensing verification” system, since it requires each firm to file information to comply with regulations. This system is in use in Taiwan. Mr. Yang also indicated the use of barcodes on drug packages in Taiwan, and noted that although GS1-128 is the current trend in Taiwan, the TFDA and relevant regulations do not require GS1-128 standards, as there are concerns that implementing GS1-128 would increase costs and affect drug companies’ willingness to enter Taiwan’s market.

Article 6-1 of the Pharmaceutical affairs Act (the “Act”) requires distributors and manufacturers of drugs to establish their own traceability system, and delegates the TFDA to establish an electronic traceability report system, enabling distributors and manufacturers to record their information on the system. The “Regulations Governing the Trace and Track System for Medicinal Products” was created in accordance with Article 6-1 of the Act, and requires manufacturers, importers, and distributors to comply. Diverse methods are provided to pharmaceutical firms, such as data import, online data entry, or automatic upload to the declaration system, making it simpler for companies to declare data. The government offers support and education trainings to pharmaceutical firms, and regularly reminds them to declare information in the system.

After the Crestor Fake Drug incident (冠脂妥偽藥事件), companies are more willing to comply with traceability regulations and participate in the prevention of counterfeit medicines. The TFDA promoted GDP and pharmaceutical track and trace to enhance the safety of the medicinal supply chain. Due to the COVID-19 pandemic and administration management considerations, more medicinal products are required to comply with the track and trace system. To maximize the application of the system, the system has established a cross-reference and statistical analysis function, which is able to provide statistics, inquiries, and output of reports. The TFDA uses data from the national health insurance to compile a list of most-counterfeited medicines, which is updated annually. In light of the pandemic and the Russo-Ukrainian War, the TFDA also monitors reports of medicine shortages on the system and improves the management of crucial stockpiled medicines. The track and trace system is interfaced with district public health bureaus, hospitals, the Controlled Drugs Management Information System, and the Medical Resource Dispatch and Support System for Emergency Response (MRDSS). These interfaces ensure the safety of the medicinal supply chain and enables efficient inspections of pharmaceutical firms.

Mr. Yang concluded the speech by highlighting the current challenges of pharmaceutical track and trace in Taiwan, such as illegal online sales and transnational importation of unknown source medicines, and the need for further transnational cooperation.

[The lecture and this article were supported by a grant from the National Science and Technology Council of the Republic of China (Taiwan). (NSTC 111-2410-H-A49 -007 -MY2).]