Kazakhstan traceability Archives - rfxcel.com

Everything You Need to Know About Kazakhstan Pharma Serialization

Welcome to Part 2 of our series about Kazakhstan serialization and traceability requirements. Part 1 detailed the country context, including government efforts to achieve pharma independence. October 1, 2022, is the next deadline in the rollout of Kazakhstan pharma serialization, so today we’ll get into the specifics of the regulations, as well as regulations for other key industries. Let’s get started.

Kazakhstan pharma serialization: pilot, goals, operator, timeline, marking requirements

The transformation of Kazakhstan’s pharmaceutical supply chain began almost seven years ago, when the government in September 2015 issued guidelines on labeling, marking, and requirements for accessing and uploading data to a central portal. In November of the same year, the Ministry of Health tapped GS1 Kazakhstan to conduct a pilot for the traceability system, which is called the Special Information System for Marking and Traceability of Goods (IS MPT).

Pilot

The pilot ran from Sept. 9, 2019, to July 31, 2021. It was led by Kazakhstan’s state-run distributor, SK Pharmacy, which labeled 100,000 packages of 30 different drugs and traced them all the way through the supply chain to hospitals and pharmacies. Four domestic manufacturers, 1 importer, 2 distributors, 5 pharmacies, and 8 medical institutions also participated.

Goals

The goals of Kazakhstan pharma serialization — and labeling of other product categories — are essentially the same as regulatory goals in other countries:

      • Communicating product information to consumers
      • Combating counterfeit and falsified products
      • Eliminating gray markets (“Shadow market” seems to be the preferred term in Kazakhstan.)
      • Protecting consumers
      • Protecting legal businesses
      • Identifying entities that violate tax laws

The Kazakh government has also said that digital labeling will help businesses increase productivity, improve logistics, increase market share, ultimately leading to increased revenue.

IS MPT Operator

Kazakhtelecom JSC, the country’s largest telecommunications company, operates the IS MPT. Sometimes referred to as “the Single Operator,” it’s the equivalent of Russia’s Center for Research in Perspective Technologies (CRPT) and Uzbekistan’s CRPT Turon. Its main offices are in Nur-Sultan (formally Astana) and Almaty.

As operator, Kazakhtelecom JSC is responsible for the following:

      • Generating marking codes
      • Providing traceability to the state
      • Interacting with the integrated system of the Eurasian Economic Commission (EEC) and operators in other Eurasian Economic Union (EAEU) states
      • Providing a digital passport of goods for market participants
      • Developing a free mobile application (NAQTY SAUDA) ​​to accept and withdraw marked goods from circulation (primarily for participants who are unable to purchase scanners)
      • Developing a free mobile application (NAQTY ÓNIM) for the public to participate in the system
      • Creating a 24/7 IS MPT contact center

In official government reporting dated Nov. 17, 2020, Kazakhtelecom JSC’s Chair of the Board Kuanyshbek Yessekeyev talked about the benefits of the IS MT. “Among its main advantages,” he said, “one can single out a decrease in the shadow market by 50 percent until 2025, which will lead to additional budget revenues by 2025 in the amount of 58.4 billion tenge [$122.5 million], according to our calculations.”

Yessekeyev also concluded that additional legal business revenues would reach 336.5 billion tenge [$706.5 million] by 2025.

Timeline

Here are the key dates for Kazakhstan pharma serialization:

Planning and pilot

      • September 2015: The government issues guidelines on labeling, marking, and requirements for accessing and uploading data to a central portal.
      • November 2015: The Ministry of Health taps GS1 Kazakhstan to conduct a pilot for IS MT.
      • 2018–2019: GS1 Kazakhstan conducts testing for the pilot.
      • Sept. 9, 2019: The pilot begins.
      • July 31, 2021: The pilot ends and the government issues serialization guidelines.
      • August 8, 2021: The Ministry of Health identifies 93 products — about 1% of all drugs in the country — for the first phase of serialization.

Rollout (note upcoming deadlines in October and early 2023)

      • June 5, 2022: The Ministry of Health delays the first phase of serialization from May 2022 until August 1, 2022.
      • August 2022: Mandatory serialization for the 93 products begins. This list includes drugs produced by four Kazakh manufacturers and 12 foreign manufacturers.
      • October 1, 2022: Mandatory serialization for 20% of drugs scheduled to begin.
      • January 1, 2023: Mandatory serialization for 60% of drugs and mandatory data reporting for 20% of drugs scheduled to begin.
      • April 1, 2023: Mandatory serialization of at least 80% of drugs scheduled to begin.
      • July 1, 2023: Mandatory serialization of 100% of drugs scheduled to begin

Note: At present, Kazakhstan pharma serialization regulations do not require aggregation.

Marking requirements

As in other EAEU and Commonwealth of Independent States (CIS) countries (e.g., Russia and Uzbekistan, respectively), products must be labeled with a DataMatrix code with four data points:

      1. A 14-digit product code (i.e., Global Trade Item Number, or GTIN) (GS1 Application Identifier 01)
      2. A 13-character randomized serial number (21)
      3. A four-character verification key (91)
      4. A 44-character verification code (92)

The maximum cost of one code will be 2.68 tenge ($0.0056) without VAT. Every code goes through the same five steps during its “lifetime”:

      1. The manufacturer applies a code to every package and sends them to a distributor.
      2. The distributor receives and scans the products, then sends them to the retailer (e.g., a store or supermarket).
      3. The retailer receives the new (legal) batch of goods, scans the codes, and sells the products.
      4. At checkout, the cashier scans each code (either with a scanner or using the NAQTY SAUDA app) and it’s withdrawn from circulation.
      5. Consumers can use the NAQTY ÓNIM app to learn more about the product.

Here are some images of the apps:

Kazakhstan pharma serialization Naqty Sauda

 

Other regulated products/industries

In 2019, Kazakhstan ratified an agreement for labeling of goods within the territory of the EAEU. In doing so, it agreed to the EEC’s decisions concerning labeling of fur products, shoes, perfumes, tires, and other products. Here is the latest information from IS MPT:

      • Tobacco products: Mandatory labeling of cigarettes began Oct. 1, 2020; April 1, 2021, for cigars, cigarillos, and other categories.
      • Fur products: Mandatory labeling began March 1, 2019.
      • Footwear: Production and import of unmarked shoes have been prohibited since Nov. 1, 2021; sale of unmarked shoes has been prohibited since April 1, 2022.
      • Alcohol: Mandatory labeling began April 1, 2021.
      • Light industry (primarily clothing and linens): A pilot ran from Dec. 15, 2020, to Dec. 31, 2021.
      • Dairy products: A pilot began on Oct. 1, 2020, and was extended in November 2021.
      • Soft drinks: A pilot ran from July 1, 2020, to Jan. 31, 2022
      • Jewelry: A pilot began in March 2022 and is scheduled to end on Oct. 31, 2022.

Final thoughts

That’s a lot to think about. We’ve provided the granular details of Kazakhstan pharma serialization requirements, but let’s boil them down to what you have to be ready for in just a few weeks: Mandatory serialization for 20 percent of drugs starts on October 1.

If this affects you, are you ready? The good news is that complying with Kazakhstan pharma serialization requirements doesn’t have to be difficult. The fastest way to ensure you’re ready for the October deadline — and all the 2023 deadlines — is to contact us and walk through our solutions with one of our supply chain experts.

We offer a holistic, fully validated, preconfigured, automated platform for compliance and L1-L5 connectivity. With rfxcel and Antares Vision Group, you’ll be prepared for regulations in the EAEU and everywhere else your supply chain goes.

 

Kazakhstan Serialization and Traceability Requirements, Part 1

We posted an Uzbekistan pharma serialization update the other day. This got us thinking about Kazakhstan serialization and traceability requirements, as Uzbekistan’s neighbor to the north is working to localize production, digitalize its infrastructure, and incentivize continued growth in key sectors, including pharmaceuticals.

So, welcome to the first of our two-part series about Kazakhstan serialization and traceability requirements. As we did in our series about the Africa supply chain, we’re going to start with context — information about the efforts mentioned above and a snapshot of what’s happening with the pharma industry. Part 2 will get into the specifics of Kazakhstan serialization and traceability requirements in pharma and other sectors.

Kazakhstan serialization and traceability requirements in context

To understand Kazakhstan serialization and traceability requirements, we must first understand what the country is doing to foster economic growth, including modernizing its infrastructure,  developing its business enabling environment, and improving the lives of its citizens. Here’s a rundown of what’s been happening.

The Economy of Simple Things

Launched in March 2019, the Economy of Simple Things program is designed to increase domestic production of mostly low-tech, everyday consumer goods and services. The government also hopes to simultaneously boost demand for these goods, decrease reliance on imports, and increase “Made in Kazakhstan” exports.

The program was funded with 1 trillion tenge (almost $2.4 billion in 2019), of which 400 billion tenge (approximately $953 million) was earmarked for manufacturing and services. It was originally slated to end in July 2022 but was extended until the end of 2023.

When Prime Minister Alikhan Smailov announced the continuation, he said the Economy of Simple Things had subsidized more than 1,100 projects valued at almost $2.1 billion, had helped increase production output and payment of taxes by 33 percent and 80 percent, respectively, and had retained and created 67 jobs.

Digital Kazakhstan

Digital Kazakhstan aims to utilize digital technologies to “allow the economy, business, and citizens to enter a fundamentally new development trajectory.” It began in 2018; barring an extension, it will end this year.

The “new development trajectory” means Kazakhstan will work to transition to a digital economy that will improve people’s quality of life. The initiative focuses on five areas, each with publicly stated goals for “What will change/be changed by 2022”:

      1. Digitization of the economy: reorganization of the economy using technology to increase productivity and growth; focused on businesses of all sizes. Example of “what will change by 2022”: Labor productivity will increase to the level of “TOP-30 world countries.”
      1. Transition to the digital state: transformation of infrastructure to provide services for and anticipate the demands of people and business; calls for “open, transparent, and convenient opportunities” that can be accessed online 24/7. Example of “what will be changed by 2022”: Government services available in electronic format will increase by 80 percent.
      1. Implementation of the digital Silk Way: development of a high-speed, secure infrastructure for data transfer, storage, and processing (i.e., internet access and high-quality mobile communications coverage). Example of “what will change by 2022”: ICT development will reach the level of “TOP-30 countries.”
      1. Evolution of the human capital assets: transformational changes to enable a creative society and the “transition to the new realities”; calls for a knowledge-based economy and digital literacy through innovations in education. Example of “what will be changed by 2022”: Digital literacy will increase to 83 percent.
      1. Innovative ecosystem formation: foster a supportive environment for technological entrepreneurship and industry innovation characterized by stable relations between business, academic institutions, and government. Example of “what will be changed by 2022”: The Astana Hub will become an “international park of IT start-ups.”

Promoting pharma independence

According to the United Nations Comtrade database, a repository of official international trade statistics and relevant analytical tables, Kazakhstan’s pharma imports were valued at $1.56 billion in 2020.

The country’s efforts to attain pharma independence date to at least the mid-2010s. In 2014, for example, the now-discontinued State Program of Accelerated Industrial-Innovative Development (SPAIID) aimed to increase the share of domestically produced medicines to 40-50 percent of the overall market.

How far have they come toward that goal? In October 2020, The Asana Times reported that “the share of domestic manufacturers in the procurement of medicines and medical devices has grown to 30 percent and continues to grow steadily.” It also reported the following:

      • In the first eight months of 2020, production volume increased 34.1 percent, reaching 81.5 billion tenge ($190.28 million).
      • Investments into the industry reached 5.2 percent and 4.1 billion tenge ($9.57 million).

For a little more context, consider these stats from an analysis published in early 2021:

      • In 2018, Kazakh pharma manufacturers produced products valued at 42 billion tenge (about $88 million at current exchange rates).
      • In the first 9 months of 2019, the market for finished pharmaceutical products had grown to 460 billion tenge (about $966 million today), a 22-percent year-on-year increase.

To fuel growth, the government in September 2020 adopted the “Comprehensive Plan for the Development of the Pharmaceutical Industry” through 2025. As reported in the Asana Times, the plan includes the following benchmarks:

      • Thirty new large pharmaceutical operations valued at 77.8 billion tenge ($163.4 million in 2020 dollars)
      • Double medicine production to 230 billion tenge ($537.55 million)
      • Triple exports to 75 billion tenge ($175.10 million)
      • Train more than 2,000 specialists and create permanent jobs for them
      • Increase domestic pharmaceutical production to 50 percent in physical terms

Furthermore, then-Prime Minister Askar Mamin directed the government to scale up support for the domestic pharma industry, especially by stimulating clinical and preclinical trials. He also tasked the Ministries of Industry and Infrastructure Development, Healthcare, and Foreign Affairs to incentivize blue-chip pharma companies to set up shop in Kazakhstan.

One last note for further context: Striving for pharma self-sufficiency isn’t a new idea. For example, earlier this year we wrote about Egypt’s Gypto Pharma City. The Egyptian government envisions this “medicine city” as a regional hub for the international pharmaceutical and vaccine industries, calling it “one of the most important national projects … with the aim of possessing the modern technological and industrial capacity in this vital field.”

Final thoughts

On August 8, the Kazakh Trade and Integration Ministry reported that the country boosted its exports to $34.2 billion between January and May 2022, a 37.2 percent increase over the same period last year.

It seems, then, that the Economy of Simple Things, Digital Kazakhstan, and the Comprehensive Plan for the Development of the Pharmaceutical Industry are reaping dividends. They’re promoting the economic vitality that will help propel the implementation of Kazakhstan serialization and traceability requirements across diverse industries, from pharmaceuticals to footwear.

We’ll talk about those requirements next week in in Part 2. In the meantime, take a look at our solutions for Kazakhstan and the other countries in the Eurasian Economic Union (EAEU). You can also contact us to schedule a short demo of our technologies — rfxcel and Antares Vision Group are committed to ensuring you’re compliant everywhere you do business.