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Injunction May Slow Momentum for RFID E-Pedigrees

Efforts to document the transfer of drugs in the pharmaceutical supply chain using RFID-enabled electronic pedigrees have suffered a blow with a federal court judge's issuance of an injunction that blocks the FDA's pedigree requirement.
Dec 12, 2006This article was originally published by RFID Update.

December 12, 2006—US government efforts to tighten security in the pharmaceutical supply chain hit a roadblock last week when a federal court judge issued an injunction that lifts pedigree requirements for drug shipments. While RFID had not been a requirement for the pedigrees, industry observers agreed that pedigree enforcement generally was a positive step toward the ultimate adoption of RFID-based e-pedigrees. Thus, with the FDA pedigree requirement now postponed, momentum behind RFID e-pedigree adoption may be slowed.

The requirement was originally established in 1987 as part of the Prescription Drug Marketing Act (PDMA), but it was stayed repeatedly for years in hopes that practical technology solutions could be developed. The FDA, drug manufacturers, wholesalers, distributors, and various industry associations have all expressed confidence in RFID to efficiently meet pedigree requirements and have promoted use of the technology. RFID's emergence and success in pilots led the FDA to remove its stay this summer and start requiring paper pedigrees effective January 1, 2007, with the idea that paper pedigree adoption would accelerate the realization of e-pedigree adoption. (See What the FDA Announcement Means for RFID and RFID Industry Implications of the FDA Update for more.)

However, ten pharmaceutical wholesalers filed suit against the FDA's Department of Health and Human Services in federal court to block the pedigree requirement, claiming it would cause them irreparable harm. Judge Joanna Seybert of the Eastern District Court of New York agreed, and issued the injunction last Friday. The injunction effectively preserves the status quo; that is: no new pedigree requirements for wholesalers.

Jayne Juvan, Esq., an attorney specializing in health and pharmaceutical law who is following the case, told RFID Update the injunction is likely to stay in effect until the suit is ultimately resolved, which could take years. Juvan and her law firm, Benesch Friedlander Coplan & Aronoff LLP, are not involved in the proceedings. Juvan said the injunction could be lifted through a successful appeal, but that is not likely based on legal precedent and the standard of proof.

"I don't think we'll see final resolution on this any time soon -- it could be years," said Juvan, who maintains a blog that provides news and analysis about the suit. "It's very, very early in the litigation process."

Ultimately, the courts tend to favor the government in cases such as this that allege Equal Protection Clause and Due Process Clause violations when the rational basis test applies, according to Juvan, making it unusual and noteworthy that the plaintiffs won the injunction in the first place. At this phase, however, the court simply assessed whether the plaintiffs were more likely than not to succeed on the merits of their claims. Given the rigorous standard, and unless there are regulatory changes in the interim, she said, it is likely that the FDA pedigree requirements will eventually take effect.

"The plaintiffs have a long way to go in the course of litigation, but the grant of the preliminary injunction was a major victory in their favor," said Juvan. "Showing that a statute is not rationally related to a legitimate government interest is difficult, as the burden is placed on the challenger of the law and the government often wins these cases. Nevertheless, good lawyering and maneuvering could still swing this in the plaintiffs' favor."

It is important to note that the plaintiffs did not file suit to block the requirements because they oppose pedigrees. (Indeed, the lead plaintiff, Rx USA Wholesale, says it has a pedigree system in place and could comply with the requirements.) Their complaint is that the requirement as written places an unfair burden on the estimated 10,000 small and midsize drug wholesalers in the US. The plaintiffs argue that the "Big 3" drug distributors -- AmerisourceBergen, Cardinal Health, and McKesson -- are exempted from the requirement and could therefore make it impossible for smaller, secondary distributors to comply by withholding information. The suit also names 16 pharmaceutical manufacturers and the Healthcare Distribution Management Association (HDMA), a trade association for healthcare distributors. HDMA did not respond to RFID Update's request for comment.

On the same day the injunction was granted, HDMA issued a press release praising the new FDA commissioner. The release quoted HDMA President and CEO John Gray as saying: "HDMA and its members -- the nation's primary, full-service healthcare distributors -- look forward to continued work with the FDA on the many important healthcare issues facing our industry. Our top priorities include the implementation of the Prescription Drug Marketing Act (PDMA) and the industry-wide utilization of current and emerging anti-counterfeiting technologies."

For their part, AmerisourceBergen, Cardinal Health, McKesson, and the HDMA are among the leaders in promoting RFID for pharmaceutical pedigrees. In November, AmerisourceBergen announced an RFID-based track-and-trace initiative, and Cardinal released results of its RFID trial (see Pharmaceutical Pilot Finds Promise, Problems).

For additional information, Rx USA Wholesale maintains a library of court filings, and Dr. Adam Fein also tracks the case on his pharmaceutical law blog.
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