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Auto Deal an Example for Pharma

The automotive industry's decision to accept higher fuel economy standards in order to avoid dealing with 50 state requirements might be a good model for pharmaceutical companies looking to avoid having to comply with 50 state laws mandating drug pedigrees.
Posted By Mark Roberti, 05.28.2009
On May 19, 2009, President Barack Obama stood with Michigan's Gov. Jennifer Granholm, California's Gov. Arnold Schwarzenegger and executives from the automobile industry to announce an agreement under which that industry would support the administration's plan to raise fuel economy standards to 35.5 miles per gallon by 2016. The car companies said they were willing to support the higher standards in exchange for the federal government introducing a national standard. Those firms did not want to deal with 50 different fuel economy requirements—one for each state.

As I watched the news that night, I couldn't help but think about the pharmaceutical industry and state drug pedigree requirements. At the moment, California is the only state to have enacted such a law. It will require pedigrees to be phased in by manufacturers, distributors and pharmacies—in that order—by 2015 (see All Eyes on FDA for Drug Pedigree, Pharma's Bitter Pill and The E-Pedigree Stalemate). Florida passed a law, then shelved it. And other state legislatures have bills in the pipeline.

The pharmaceutical industry is understandably concerned about having to deal with 50 state laws with different data-collection and reporting requirements. A national pedigree law would raise costs for the industry, but individual state laws would be a nightmare.

I asked a person focused on this issue at the U.S. Food and Drug Administration (FDA) why that organization didn't call in the states, hammer out a timetable for introducing pedigree requirements and have it enacted nationally. "We have spoken to all of the states about this," he told me, "but they don't necessarily agree that this approach would work best. They insist their state has special requirements."

Having different state requirements is such a bad idea—it would dramatically increase the cost of collecting the data and making it available to regulators—that I can't see it happening. Instead, I believe one of three things will occur: State legislators will see little need, or voter desire, for such laws and drop them (not likely, given the growing counterfeiting problem); legislators will simply follow the compromise hammered out with the pharma companies by California, creating a de facto national pedigree standard; or the Obama administration will create a national pedigree requirement.

Right now, states are not rushing to jump on the California bandwagon, and the federal government is not pushing hard for a national pedigree requirement. As such, the industry is not taking the initiative. But now would be a good time for the pharma industry to follow the auto industry's lead and work with the administration on creating a national pedigree requirement.

Such a mandate would forestall other legislatures from pursuing their own requirements. And by working with the FDA on a national standard, the industry could shape the regulation in such a way that would protect the public and enable pharmaceutical manufacturers, wholesalers and retailers to adopt the technology necessary to gather pedigree data within a timeframe that makes economic sense—and that doesn't dramatically raise costs.

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