As described in our previous blog (New Developments in the Fight Against Falsified Medicines), the European Medicines Verification Organisation or EMVO was founded in February 2015 as a means to help EU Member States implement the requirements set out by the Falsified Medicines Directive (2011/62/EU).

Among other measures, the FMD mandates that Member States place a ‘Unique Identifier’ (UI) on individual medicinal packs for authentication. According to the draft Delegated Act published in August 2015, describing the technical characteristics of the safety features, the UI takes the form of a 2D barcode or matrix code containing a unique serial number, a product code, an expiration date, a batch number, and a national health number (where necessary). In addition, this code must be verifiable at the point of dispensing to the patient.

The EMVO therefore stems from the need to create a central ‘European Hub’ that would ensure interoperability between existing national systems, while reducing complexity and costs of doing so. Indeed, Member States would not only benefit from the opportunity to join an existing product verification infrastructure designed by the EMVO, but also to share the economic advantages of implementing a collective system.

Thanks to the establishment of the EMVO, countries are expected to comply with the FMD and be fully operational roughly by the end of 2018.

According to Johan Verhaeghe, FMD Project Manager, the cost of centralizing national verification systems through the EMVO is based on a flat fee model. I This model accounts for the cost of running the EU ‘hub’ (a shared cost), that of the national verification system(s) (proportional to the number and size of systems in place), and that of the data repository system operated by the IT service provider. In light of this breakdown, Dr. Verhaeghe estimates the flat fee to be between €5000 and €19000 per marketing authorization holder (MAH) – the company or other legal entity that has the authorization to market a medicine in one, several or all European Union Member States – per country per year.II Adoption of EMVO’s national verification system could therefore come with a hefty price tag given the long list of MAHs in Europe. III

One advantage of this flat-rate pricing model is that countries and marketing authorization holders or MAHs will be more likely to lean on the EMVO to build and deliver a national and interoperable verification system in a shorter amount of time. Another advantage of this model is that it is transparent and easy for Member States and MAHs to understand, therefore increasing the likelihood of adoption.

However, while flat-fee pricing is a clear motivation to “get the job done”, it may also lead the EMVO to poor work quality, given the lack of financial incentives. Another potential disadvantage is that any obstacle that gets in the way of building a verification system may amount to more work and unexpected costs on the part of the EMVO, potentially leading to financial trouble.

Regardless of the pricing method adopted by the EMVO, the cost of implementing a standard national verification system that aims to meet the safety feature requirements of the FMD will undoubtedly generate added costs to the many stakeholders involved in the legitimate supply chain, from manufacturer to patient.

I Johan Verhaeghe, FMD compliance: the National Blueprint Approach, presentation given at the Anti-Counterfeiting & Brand Safety World Summit London, 1 October 2015, slide 36

II See Reference 1, slide 39

III Full list of Marketing Authorisation Holders and Sponsors, ec.europa.eu

 

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