“The price of no action is far greater than the cost of a mistake”
― Meg Whitman
State governments, federal agencies and the pharmaceutical industry started a real war against counterfeiting and diversion. Track and trace system, serialization, and e-pedigree are their main defensive tools. The desperation and perseverance have been additionally stoked after FDA’s recall-data publication. In middle of 2014, presented statistics have suggested the highest amount of serious drug recalls in history (FDA, 2014). Unprecedented surge in the number of deviations reported to the agency whetted the tension among manufacturers and caused implementation of additional regulations protecting drug supply chains.
In fact, a high record of drug recalls could be a result of improving GMP regulations as well as FDA’s rapid action of clamping down on pharmacies. Notwithstanding, one drug producing plant with cGMP insufficiencies can lead to a decrease in drug development causing a great amount of drug retractions.
”During the period beginning on October 1 and ending on December 31 of each year, every person who owns or operates any establishment in any State engaged in the manufacture, preparation, propagation, compounding, or processing of a drug or drugs shall register with the Secretary the name of such person, places of business of such person, all such establishments, the unique facility identifier of each such establishment and a point of contact e-mail address.” ( FDASIA Section 701, 2012).
This requirement also applies to “Every person who owns or operates any establishment within any foreign country engaged in the manufacture, preparation, propagation, compounding, or processing of a drug or device that is imported or offered for import into the United States” (FDASIA Section 702, 2012).
The previous governing law required producers, wholesalers and distributors providing at a minimum; a paper-based documentation of the quantity, industrial lot number, and purchase-order number of a specific drug. However, it left the records open to individual influence such as error and falsification. Those procedures have been changed due to increasing number of illegal pharmacies and offshore manufacturers pushing unlicensed drugs into the pharmaceutical supply chains.
Industrial players and government realized, that pedigree-data needs to be electronically recorded in order to guarantee supply chain integrity and patient safety. In fact, creating an electronic version of the chain-of-custody requirement (e-pedigree) became a challenging task due to technical and legal regulations. Additionally, many countries have passed their own requirements for companies doing business within their borders (e.g. Japan, China, and India).
In 2012, manufacturers and wholesalers came together and formed the Pharmaceutical Distribution Security Alliance, demanding anti-counterfeit federal legislation in place. It resulted in an implementation of e-pedigree law, which went into effect on the beginning of January 2015. Manufacturers have now 17 months to set up an IT system to track and trace packages and products. Time frame might be changed, if a federal law averts the California mandate (which, paradoxically, California’s own law allows the federal law to do). For now only the state of California has required that by 2015, 50% of drug products have to possess e-pedigree records. Another 50 % must provide such a record by 2016. Wholesalers and re-packagers must accept and license products with an e-pedigree by July 1, 2016. Pharmacy and pharmacy warehouses have to implement e-pedigrees by July 1, 2017. Thus, clock is unrelentingly ticking…
In addition, importers should secure their distribution lines and supply chain integrity by meeting requirements of the American National Standards Institute’s Security Assurance Standard (ANSI/NASPO SA-2008) or other analogous directives. Furthermore, in order to create an effective controlling system, it is advised to create a senior management structure focusing on product and distribution safety and integrity, including well-defined roles and responsibilities.
E-pedigree, a firm’s nightmare?
Recently, global implementations of e-pedigree with serialization were in a state of flux. The following decisions; where to begin an e-pedigree, how to reconfigure packing lines, what type of software to implement and how to integrate all partners of supply chain together, have not been taken yet. In fact, for very long time there were no specific standards established. Supply chains differ from market to market and by product-to-product, thus setting up common rules and requirements is an extremely difficult task.
“State legislation isn’t necessarily going to move manufacturers into immediate and robust action (…) people have been burned twice” (source: Scott Dicks, 2010). In fact, during a legislative pause, drug manufacturers’ partners should come together and push an implementation of electronic pedigree programs worldwide. Effectiveness of this system should be in range of their own interest as it aims to prevent counterfeit drugs and protect their brands from replication.
The first radical change happened on 18th of November 2013, the U.S. Senate approved the Drug Quality and Security Act (H.R. 3204), which state the set of standards to track pharmaceuticals through the supply chain helping to stop the counterfeit medications reaching the drug distribution system. The Drug Quality and Security Act (DQSA) granted the U.S. Food and Drug Administration greater authority in regard the right to regulate companies that compound antiseptic drugs and distribute them across states. It has defined first national standards of track-and-trace drugs system.
“We have succeeded in creating certainty and consistency in our supply chain with passage of this historic law. I suspect that passage of this legislation is one of the most significant accomplishments of HDMA dating back to our founding in 1876” – John M. Gray, President & CEO of the Healthcare Distribution Management Assn.
Implementation of e-pedigree will make the supply chain more efficient and transparent. It will reduce the labor hours spent on auditing, counting, and locating. By using RFID or 2D barcodes technology hundreds of tags/labels can be read at one time, which will speed up distribution significantly.
Nevertheless, even though technology is available, the costs of setting up a new system industry wide are still quite high. Therefore, in order to implement a cohesive plan for the pharmaceutical supply chain, the federal as well as global regulations must be very well thought through, including any possible worst case scenarios. It must ensure distribution effectiveness, security and the consumer’s protection.
E-pedigree is a part of complex structure, which includes serialization solutions, trace and track systems and integrity plans. It builds a drug chain of identity (co-referential chain relating to the same thing or product dependency) from the compounding of ingredients to the administration to the patient. It increases the security and protects drug information associated with various suppliers and traders. In fact, the tracing application gives a chance to establish a direct dialog with customers and patients. It can build business loyalty and clients’ awareness as well as increase the firms’ reliability.
Many big firms have already started implementing advance serialization and innovation of their e-pedigree programs. Undoubtedly, it will affect all drug makers, their trading partners and patients. It might influence a products price as well as their availability and accessibility. As a matter of fact, e-pedigree and serialization are very easy to understand but very difficult to apply in the manufacturing processes. It demands a comprehensive system to track the passage of prescription drugs through the complete supply chain. In fact, it is built on pure trust and the good will of parties involved.
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Author: KVALITO Consulting Group