How does track-and-trace technology work in pharmaceutical logistics?

hexxabotics · 08 Oct 2026

Track-and-trace technology in pharmaceutical logistics works by assigning a unique identifier to each drug package and recording every movement that package makes through the supply chain, from manufacturer to patient. The system creates a digital chain of custody that regulators, distributors, and dispensers can verify at any point. The questions below unpack how each component of that system functions in practice.

What regulations require track-and-trace in pharmaceutical supply chains?

Several major regulatory frameworks mandate track-and-trace in pharmaceutical supply chains, with the most significant being the US Drug Supply Chain Security Act (DSCSA) and the European Falsified Medicines Directive (FMD). Both require that prescription medicines carry unique product identifiers and that those identifiers be verified at defined points in the distribution chain.

In the United States, the DSCSA requires manufacturers, wholesalers, dispensers, and repackagers to exchange and verify product tracing information electronically. The regulation has been phased in over a decade, with full interoperable electronic tracing requirements now in effect. Each trading partner in the supply chain must be able to trace a product back to its origin using standardized transaction data.

In Europe, the FMD requires that prescription medicines carry a two-dimensional barcode containing a unique serial number, product code, batch number, and expiry date. Medicines must be verified against a central repository at the point of dispensing, and the pack must be authenticated before it reaches the patient. National medicines verification organizations in each EU member state connect to the European Medicines Verification System (EMVS) to enable cross-border verification.

Other significant frameworks include China’s national drug traceability system, Brazil’s SNCM, and South Korea’s serialization requirements. Across all of these, the underlying principle is consistent: each unit of medicine must carry a unique identifier that allows regulators to reconstruct its journey through the supply chain.

What data is captured at each step of pharmaceutical tracking?

At each step in the pharmaceutical supply chain, track-and-trace systems capture the product identifier, the location of the transaction, the date and time, the parties involved, and the nature of the event, such as shipment, receipt, or dispensing. Together, these data points form a complete, auditable record of where a medicine has been and who handled it.

At the manufacturing stage, the core data recorded includes the unique serial number, the National Drug Code or equivalent product identifier, the batch or lot number, the expiry date, and the packaging date. This information is encoded into a two-dimensional barcode and simultaneously registered in a central repository or transmitted to the next trading partner.

When a wholesaler or distributor receives a shipment, the system records the scan of each unit or case, confirms the product data matches what the manufacturer reported, and logs the receiving event with a timestamp and location identifier. Any discrepancy between the physical product and the expected data triggers an exception that must be investigated before the product can move further.

At the dispensing stage, a pharmacy or hospital verifies the unique identifier against the central repository before the medicine reaches the patient. A successful verification decommissions the serial number, confirming the pack has been legitimately dispensed and preventing the same identifier from being used again. This final scan closes the chain of custody for that individual unit.

How does serialization connect to the broader track-and-trace system?

Serialization is the foundation of track-and-trace. It is the process of assigning a globally unique identifier to each individual saleable unit of medicine. Without serialization, track-and-trace systems have no reliable way to distinguish one pack from another, which makes end-to-end traceability impossible.

A serialized product carries a combination of data elements, typically the product code, a unique serial number, the batch number, and the expiry date, encoded together in a machine-readable format such as a GS1 DataMatrix barcode. This combination creates a unique fingerprint for each individual pack.

Serialization becomes track-and-trace when that identifier is registered and then reported at each transfer of ownership or custody. The serial number alone is not sufficient. It must be connected to a network of systems, including the manufacturer’s serialization platform, the wholesaler’s warehouse management system, verification repositories, and the dispenser’s point-of-sale or pharmacy system, so that the identifier can be read, verified, and updated at each stage.

The broader track-and-trace system therefore depends on serialization data flowing accurately between these systems through standardized electronic messages. Formats such as GS1 EPCIS (Electronic Product Code Information Services) provide a common language for reporting serialized product events, enabling different organizations using different software platforms to exchange traceability data in a consistent, interpretable way.

What’s the difference between track-and-trace and cold chain monitoring?

Track-and-trace records where a medicine has been and who handled it. Cold chain monitoring records what conditions a medicine experienced during transport and storage. The two systems address different compliance requirements and use different technologies, although they increasingly operate alongside each other in pharmaceutical logistics.

What track-and-trace covers

Track-and-trace is primarily concerned with the custody and authenticity of a product. It answers questions such as: Was this pack manufactured by the right company? Has it passed through authorized trading partners? Has it already been dispensed? The data it captures is transactional and identity-focused, centered on serial numbers, batch identifiers, and custody events.

What cold chain monitoring covers

Cold chain monitoring is concerned with the physical integrity of a product. It answers questions such as: Was this medicine kept within the required temperature range? Was it exposed to humidity or light conditions outside specification? The data it captures is environmental and continuous, typically drawn from temperature loggers, sensors, and data recorders that travel with the shipment.

For temperature-sensitive products such as biologics, vaccines, and certain specialty medicines, both systems are necessary. A product can have a complete and verified track-and-trace record while still having been exposed to a temperature excursion that compromises its efficacy. Integrating cold chain data with traceability records allows a distributor or regulator to correlate a specific batch with any environmental events it experienced, which strengthens both quality control and recall capability.

How do counterfeit drugs get detected using track-and-trace systems?

Track-and-trace systems detect counterfeit drugs primarily through verification failures. When a product’s unique identifier is scanned and does not match any record in the verification repository, or when the same serial number appears in two different locations simultaneously, the system flags the product as suspect. Legitimate medicines generate clean verification results; counterfeits, by definition, cannot.

The most direct detection mechanism is end-point verification. Under the European FMD, for example, every pack must be verified against the central repository at the point of dispensing. A counterfeit pack either carries a fabricated serial number that has never been registered, a serial number that belongs to a different product, or a serial number that has already been decommissioned. Any of these outcomes produces a verification alert that prevents the product from being dispensed.

A second detection mechanism is aggregation and supply chain analysis. Genuine products follow predictable routes through authorized trading partners. A serialized pack that appears in an unauthorized distribution channel, or that skips expected custody steps, generates anomalies in the traceability data that can indicate diversion or counterfeiting. Regulatory authorities and manufacturers can analyze these patterns across large datasets to identify systemic problems rather than individual suspect packs.

Track-and-trace also makes retrospective investigation faster and more precise. When a counterfeit product is identified, the serial number data allows investigators to determine where in the supply chain the suspect product entered, which batches may be affected, and which distribution partners handled it. This significantly accelerates targeted recalls and regulatory action compared to investigations based on batch numbers alone.

What technology infrastructure does a pharmaceutical company need to implement track-and-trace?

Implementing pharmaceutical track-and-trace requires serialization hardware and software at the packaging line, a product master data management system, an EPCIS-compliant event repository or connection to a third-party traceability network, and integration between warehouse management systems and the traceability platform. The exact configuration depends on the company’s role in the supply chain.

At the manufacturing level, the core infrastructure includes printing and labeling equipment capable of applying machine-readable barcodes at line speed, vision systems to verify print quality and readability, and serialization software that generates unique numbers, manages the numbering pool, and reports commissioning events to the relevant repository.

For wholesalers and distributors, the critical infrastructure is the ability to scan and verify products at receiving and dispatch, exchange standardized traceability data with upstream suppliers and downstream customers, and manage large volumes of serial number records within warehouse operations. Warehouse management systems must be capable of recording serial number data at the tote or unit level, not just at the batch level, to support full unit-level traceability.

At the dispensing level, pharmacies and hospitals need point-of-care scanning capability connected to a national or regional verification repository. The scan must return a result in near real time to avoid disrupting dispensing workflows.

Across all levels, connectivity to standardized data exchange networks is essential. The GS1 EPCIS standard is the dominant framework for event reporting, and most national verification systems require suppliers to connect through compliant interfaces. Cloud-based traceability platforms have made this connectivity more accessible for smaller trading partners who cannot build and maintain their own repository infrastructure.

How Hexxabotics supports pharmaceutical track-and-trace requirements

Pharmaceutical track-and-trace places specific demands on storage and retrieval operations. Every tote, batch, and lot must be individually accessible, accurately located, and retrievable without disturbing surrounding inventory. Hexxabotics addresses these requirements directly through its high-density AS/RS architecture:

Direct-access retrieval: Every storage location is independently accessible, so specific batches and lots can be retrieved without digging through or reshuffling surrounding inventory, which is essential for FEFO and batch-controlled picking.
Supports batch traceability and regulated pharmaceutical workflows: The system is designed to work within implementations that include batch management, expiry control, and audit-ready inventory records.
Compact, scalable footprint: Storage capacity and throughput can be scaled independently, allowing pharmaceutical distributors to grow inventory depth without redesigning the facility.
Integration with WMS and orchestration layers: Standard APIs connect the Hexxabotics Control System to warehouse management and execution systems, keeping serialized inventory data consistent across the operation.
Distributed resilience: Multiple autonomous robots mean that a single unit being unavailable does not halt the entire retrieval operation, supporting the reliability that regulated pharmaceutical environments require.

If you are evaluating automated storage for a pharmaceutical distribution or fulfillment environment where traceability, batch control, and operational reliability are non-negotiable, speak with the Hexxabotics team to discuss how the system can be configured for your specific regulatory and operational requirements.