Drivers for Smart Packaging

Smart packaging is an area that is pertinent to the interests of our community. It has links to track and trace, product labelling and interaction with the brand through technology. The aim of this article is to take a wider look at trends in smart packaging and consider some of the potential implications for tax stamps and track and trace solutions.

In the December 2020 edition of Tax Stamp & Traceability News™ (TSTN), we heard the ‘… International Tax Stamp Association (ITSA) and other industry experts declaring that the start of the new decade heralds an opportunity to capitalise on emerging technology applications that can link stamps to digital traceability systems’. This was the prompt that set this article in motion.

That thought sent my mind back to Ian Lancaster’s article from the previous month, ‘The Era of Smart Packaging’. This majored on the use of printed codes for intelligent packaging but also considered smartphone interaction with the package through near-field communication (NFC). This led me to consider the types of technologies featuring in smart packaging that could impact tax stamps and traceability systems.

The final link in this chain came while writing the article ‘A Post-COVID Vision’ for the January 2021 TSTN, considering a change in technology applications as a result of the pandemic. There we looked into the changes in the commercial landscape from recent events, and that influenced the thinking for this piece. We should also consider smart packaging from the perspective of technology insurgents (TSTN September 2020) – how would they do things differently?

Various drivers (technical and social) contribute to technology innovations in packaging and we will see that some overlap with tax stamps too. For the reasons outlined below, pharmaceutical packaging offers interesting examples which can provide us with some learning points.

Pharmaceutical packaging as a case study

There is already some technology overlap between tax stamps and pharmaceutical packaging. For example, the use of datamatrix codes is specified by the EU Falsified Medicines Directive as the unique identifier for pharmaceutical products sold in the EU. Tax stamps also feature on pharmaceuticals in a number of countries.

There are drivers at play within the pharmaceutical market that look set to accelerate the rate of innovation in packaging. One example of this is the need of an aging population for medication compliance aids to remind them when to take their tablets and act as a record that they have done so. From a brand owner’s point of view, such innovations provide a further connection with the customer and keep a wary eye on the supply chain.

Pharmaceutical packaging is not a new application area for our community. The use of security printing and inks, holograms and track and trace technologies are already established there, as are other products from companies like SICPA. Particularly as a result of the COVID pandemic, there is renewed interest in counterfeit deterrence and authentication in this market.

There are a number of global, regional and local organisations which are actively voicing interest in combatting the threats from counterfeiting and illegal trade in medical products in general. The World Health Organisation, European Observatory on Infringements of Intellectual Property Rights, and the Organisation for Economic Co-operation and Development (OECD) have all been active in publishing studies in this area. This level of activity is encouraging activity to combat what is seen as a growing threat to world trade and public health, a trend that we should view as a positive development for our activities.

While counterfeiting and product diversion have plagued the pharmaceutical industry for some years, the current COVID crisis has acted to bring this into further focus.

Earlier in the pandemic, Operation Pangea, Interpol's global pharmaceutical crime fighting unit, was active in this area. However, dislocations in the global pharmaceutical supply chain and the trend towards large numbers of small packages circulating as the fulfilment route for internet shopping, have all served to create further opportunities for illegal trade.

The changing nature of NFC

NFC is not a new technology to authentication. It has been deployed in the German ID documents, linking printed barcodes and electronic tags for two-factor authentication. A more pertinent example is the Smartrac Circus Tamper Loop tag, specifically designed for tamper detection and authentication on packaging. Closer still, are the NFC-enabled wine bottles from Guala Closures and NXP Semiconductors.

One major weakness in the deployment of NFC on packaging has been the cost of implementation, (addressed in TSTN July 2020 by Sovereign Border Solutions). This was explored a little further in the technology insurgents article, but we may have to reappraise this cost issue due to advances in printed electronics. As a result, NFC is now being offered for pharmaceutical packaging by some major players and we would do well to stay aware of this.

Avery Dennison, in collaboration with Schreiner MediPharm and PragmatIC Semiconductor, is working on NFC-enabled labels at a cost compatible with unit-level everyday pharma packaging. Incorporating the PragmatIC ConnectIC® flexible integrated circuits into the Avery Dennison NFC inlays (combined with the market access of Schreiner MediPharm into this sector), will be an interesting case study to monitor. Announced in December 2020, the solution is due for release in the first quarter of 2021.

Some notes of caution

Almost without exception, new technologies have a downside. Even if the cost of NFC is reduced, we should remember that NFC connectivity is not universal across smartphones. And a more substantial issue may be a growing emphasis on sustainability.

As a result of the United Nations Sustainable Development Goals initiative, this issue is climbing up the agenda of many companies and institutions. Packaging and labelling, and the materials deployed on these, will come under increased scrutiny. Solutions exist and it is again an area that our community must pay heed to.

In summary

New packaging technology offers both opportunities and learning points for the tax stamp industry. The lesson from the pharmaceutical industry is that the post-COVID environment may see a resurgence of interest in counterfeit deterrence and authentication. We should also be following potential changes in the cost base of NFC labelling.

Taking this debate further

The recently published report ‘Tax Stamps & Traceability: A Market Analysis and Technical Update’, presents a number of examples where tax stamp programmes feature in pharmaceutical packaging, in addition to the wider context of revenue-enhancing processes. The report also includes examples of the use of RFID labels in tax stamps too.

For those looking for more detail on printed electronics, this will form part of a new Reconnaissance International publication called ‘Printing beyond Colour’, to be issued later this year. The technology has also featured in the Digital Document Security™ conference, with companies within our community, such as Prismade®, demonstrating their capabilities in this area.