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Pharma Ponders a Track-and-Trace System

At last week's RFID Track and Trace Health Care Summit, there was a great deal of focus on what state governments and the FDA will require the pharmaceutical industry to do, and less emphasis on the business value of RFID.
By Mark Roberti
Nov 24, 2008Last week, I was invited to speak at the RFID Track and Trace Health Care Summit, held each year by the Health Care Distribution Management Association and the National Association of Chain Drug Stores. The pharmaceutical industry drew a collective sigh of relief when California decided to delay its pedigree requirements until 2015, so I was encouraged to see that some in the industry are still interested in exploring RFID's potential to capture electronic pedigree data automatically—until I realized most aren't.

Jeffrey E. Shuren, associate commissioner for policy and planning at the U.S. Food and Drug Administration (FDA), said the agency believes "the existing supply chain safety system for FDA-regulated products is not adequate," and that there needs to be "a paradigm shift in supply chain safety." The role of electronic track and trace will be critical, he told attendees. The U.S. Congress requires the FDA to publish guidelines in March 2010, and according to Shuren, there is continued activity in Congress that could require the agency to take a more proactive role in establishing track-and-trace requirements.

Paul Rudolf, a former FDA official and now a senior health-care advisor for law firm Arnold & Porter LLP, said he believes other states will follow California's lead and essentially enact pedigree laws with a similar timetable. California is requiring drug manufacturers to have e-pedigrees for half of their individual drugs by Jan. 1, 2015, and the other half by Jan. 1, 2016. Distributors must begin tracking with e-pedigrees by July 2006, and pharmacies one year after that.

Rudolf's argument was that since California had spent a great deal of time and energy over the past 12 months building a consensus among drug manufacturers, distributors and retailers, it would make no sense for other states to begin all over again with industry meetings and hearings. Like California, most states won't require radio frequency identification, though that will likely be the most cost-effective way to collect e-pedigree data on individual units of drugs, because scanning bar codes on each unit would be too costly.

At the meeting, I got the feeling many attendees were there to hear the latest regarding which regulation is in the offing, and that they were happy to learn that no regulation is imminent. There was little discussion of the potential business benefits of employing RFID and 2-D bar codes for track and trace. I would have thought CEOs of large drug companies would be deeply concerned about what could happen if, for instance, 50 people were to die from taking counterfeit versions of their drugs. What would be the impact on their brand, and how would they reassure the public that the pharma supply chain is safe? It seems they're assuming that will never happen, and I hope it doesn't—but the possibility remains, especially given what's happening with goods coming from China.


Mike Ahmadi 2008-11-24 08:37:25 AM
Security and Risk Management Still Unanswered Mark, Anyone with a modicum of intelligence can understand the potential business benefits of a "killer" application like RFID. It does not take a rocket scientist to figure that out. Where the industry is nearly clueless is in understanding the associated risks. Big Pharma is currently NOT held liable for counterfeits. The court of public opinion may or may not deliver a guilty verdict, but legally they are in the clear. Once ePedigree becomes the law of the land, that potentially changes EVERYTHING. Big Pharma is now expected to make sure the tracking system is sound, robust, and is stopping counterfeits. Perhaps the liability lies elsewhere in the supply chain, and the associated organization is held liable. These are big unknowns. Couple that information with the cost of RFID implementation, the KNOWN security pitfalls of MOST RFID systems, and the enormous task of getting everyone to agree on what to do, and we can easily see why nobody is willing to dive into this so quickly. I recently delivered an oration at an FDA public hearing regarding tracking systems for produce, and I spoke of the need for security. I was directly approached by a uniformed FDA officer who thanked me and said "The FDA is really bad when it comes to anything that is related to information technology, we need to look more closely at security." So if industry leaders, such as RFID Journal, Supplycape, ABI, etc. are not going to lead the charge for security, who is? The RFID Security Alliance is trying our best to do so, but WITHOUT the support of industry leadership our reach is limited. Perhaps RFID Journal might consider lending a hand.
Bikash Chatterjee 2008-11-25 04:21:46 PM
Pharma Ponders a Track-and-Trace System I very much enjoyed reading Mr. Roberti's article on the challenges facing pharma and biotech in complying with proposed track and trace legislation. I felt however, it is important to calibrate the challenges properly in order to fully grasp the opportunity and impediments to implementing RFID and the industry's apparent hesitance to do so. The mandate for traceability has been in place since the first recommendation by the Counterfeit Drug Task Force in 2004 and has been specified in terms of enforcement in Compliance Policy Guide 160.900 Prescription Drug Marketing Act – Pedigree Requirements under 21 CFR Part 203 December 2006. So the legislation exists. For an industry which spends literally billions on product development why hasn’t there been a rush to adopt RFID? The answer is complex but I believe lies in some fundamental truths. First there must be a tangible perceived threat to prompt the industry to jump to significantly more modern technology. For an industry that has just embraced barcoding to any significant level over the last 5 years, RFID is star wars technology. Technology adoption is always a labor intensive undertaking. In addition to this challenge we have the market and pricing challenge. The industry is not eschewing adopting track and trace because it wants to put people in harms way. The very real fact is the US pharma market is contracting. Consolidation and layoffs at all of the big pharma and biotech companies are occurring on a weekly basis as the industry attempts to look for new ways to become more efficient an drive down development costs in light of mounting pressure from the public and Congress to drive down the cost of health care. Couple this with an FDA that has stumbled badly over the last few years in terms of protecting the public and you have a highly risk averse environment for bringing in new therapies. So take the $1.3 billion it takes to develop a drug, add a couple of hundred million and several more years and you have a very challenging market and only a few years of patent protection in which to be profitable. The drive to exploit low cost manufacturing overseas as a cost cutting measure is opening the industry up to risk. Assessing that risk as part of a structured risk management model is key to ensuring the security of our drug supply. The Heparin example would not have been alleviated by RFID because the root cause was a well known additive which looks the same on test as Heparin. The problem started with the acceptance criteria and testing not with the supply chain. So to set the record straight I believe RFID technology and new emerging versions of these technologies offer the portent of tremendous advantage to the industry. However, if you do not consider the realities in technology adoption along with the drivers within this market sector you will never get your message heard.

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