development of drug e-pedigree systems in the united states prospects for business application of...

Development of Drug E-Pedigree Systems in the United States

Prospects for Business Application of Track and Trace Systems for Drug Verification

Modernization of Informational Processes in the Sphere of Healthcare

Ministry of HealthcareRussian Federation

Dirk RodgersDecember 10, 2013

Speaker

• Dirk Rodgers– Independent Consultant– Founder, RxTrace.com (2009 to present)

– Contributing Editor, Healthcare Packaging Magazine– Formerly Sr. Consultant of Serialization and Pedigree with Cardinal

Health (2002 to 2007, 2009 to 2012)

– Formerly Dir. Of Industry Standards at SupplyScape (2007 to 2009)

– Co-Chair of GS1 ePedigree work groups (2005 to present)

2

Agenda

• U.S. Pharma Supply Chain Facts• A History of the U.S. Drug Supply Chain • Overview of the New U.S. Federal Drug Quality

and Security Act (DQSA)• Anticipated Standards and Technologies for

Meeting the New U.S. DQSA Law• Q&A

3

4

U.S. Pharma Supply Chain Facts (2011)

• 4.02 Billion prescriptions were filled by U.S. pharmacies• 55% of all prescriptions were filled by chain drug stores or

mass merchandise stores• Total pharmaceutical market: $319.9 Billion• 2010 to 2011 market growth: 4%• Top 20 therapeutic classes comprise nearly 50% of total

sales• 3 wholesale distributors handle 87% of all drugs in the U.S.• U.S. Distributors inventoried 24,377 drug SKU’s (average)• Average distribution center handled 2,738 orders per day• 80% of drug APIs are imported, 40% of finished drugs are

imported Sources: HDMA website, FDA website

Agenda




5

Copyright 2013 Dirk Rodgers Consulting, LLC 6

The U.S. Federal PDMA Law

• Prescription Drug Marketing Act of 1987• “… Each person who is engaged in the wholesale distribution of drugs […]

and who is not an authorized distributor of record of such drugs shall provide to each wholesale distributor of such drugs a statement identifying each sale of the drug (including the date of the sale) before the sale to such wholesale distributor. …”

1985 1990 2000 20101995 2005

PDMA bill becomes a

law

PDMA effective except pedigree

Amendments enacted

FDA proposed rule publish

ed

FDA final rule publish

ed, eff 12-2000

Rule stayed until O

ct. 2001

Rule stayed until Feb. 2002

Rule stayed until A

pril. 2003

Rule stayed until A

pril. 2004

Rule stayed until D

ec. 2006

Rule in effect for 4

days when

RxUSA files suit &

judge stays

Suit ends, F

DA says it

will not

enforce certain pedigree

provisions p

ending FDAAA 2007

actions

Today


Increase In Pharma Supply Chain Crimes

• Starting in about 1998 some criminals in Florida obtained drug wholesale distributer licenses

• Began selling diverted drugs to the large, legitimate wholesale distributors

• As demand increased, they began selling counterfeit and up-labeled drugs

• Adverse reactions in patients began occurring across the nation leading to discovery of counterfeits

• State governments became concerned that the repeated delays in the effective date of the federal PDMA law was enabling these crimes

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The Florida Pedigree Law

• Wholesalers must provide “pedigree papers” to customers• Invoice statement allowed for direct purchases• Electronic pedigree allowed optionally• Buyers were required to “authenticate” pedigrees• No serialization was required• Problem being solved: Illegitimate drugs

20202000 2010 20152005

Regulation adopted

Regulation effective

Today

Regulation modified

Copyright 2013 Dirk Rodgers Consulting, LLC

The California Pedigree Law• Manufacturers were to be required to serialize Rx drugs and start an

electronic pedigree– 50% by January 2015, 100% by January 2016

• Wholesalers and Repackagers were to (by July 2016):– Read serial numbers at receiving and confirm they received an authentic

pedigree– Update the pedigree and pass it to their customer

• Pharmacies were to read serial numbers at receiving and confirm they received an authentic pedigree (by July 2017)

• Problem being solved: Illegitimate drugs• GS1 Standards were planned

920202000 2010 20152005

Regulation adopted

2009 effective date (abandoned)

Today

Current e

ffective for m

anufacturers

Current e

ffective for d

istrib & re

pack

Current e

ffective for p

harmacies

2007 effective date

(abandoned)

2011 effective date (abandoned)



Elimination of Wholesaler Secondary Sourcing

• 2005 New York State Attorney General Elliot Spitzer investigated U.S. wholesaler secondary sourcing practices– 2006 Settlement with Cardinal Health resulted in $11 Million

penalty and closure of secondary sourcing business unit– McKesson and AmerisourceBergen quickly shutdown their

secondary sourcing businesses– All three businesses, representing 87% of drugs distributed in

the United States, announced that they would no longer buy stock drugs from the secondary market

• Eliminated the “open door” criminals found into the legitimate national drug distribution network


What Were U.S. Pedigree Laws Trying To Accomplish?

• detect the introduction of illegitimate drugs (counterfeit, stolen, up-labeled, diverted, etc.) into the legitimate supply chain as early as possible, preferably at the very first transaction

• identify who participated in the introduction of the illegitimate product

• Help prosecute criminals efficiently by automatically generating solid evidence

• Pedigrees protect patients by protecting the supply chain from criminal activity

• http://www.rxtrace.com/2009/11/what-are-us-pedigree-laws-trying-to.html/

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HDMA Pedigree Regulation Map

Source: HDMA website, February 2013


“Patchwork” of State Pedigree Laws

• By 2010, about 30 states had enacted pedigree laws, each with different regulations

• Industry grew increasingly concerned about the complexity of the California regulations

• Industry organized “Prescription Drug Security Alliance” (PDSA) to lobby U.S. Congress to pass a Federal law that would nationalize regulations and pre-empt all state drug pedigree laws

• The PDSA effort was successful with President Obama signing Congressional Drug Quality and Security Act (DQSA) into law November 2013– All state pedigree laws became “inoperative” immediately– New regulations start to become effective January, 2015

Agenda




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Overview of U.S. DQSA of 2013• Two major phases:

1. Initial lot-based paper/electronic Pedigree for 10 years2. Unit-level serialization-based, interoperable, electronic track & trace

system starting after 10 years

• Preempts all existing state and federal pedigree laws• Long list of exemptions including all of those from CA pedigree

law• Small companies may apply for exemption due to costs• Parties must hold a state or federal license to participate in the

supply chain after January 1, 2015• New federal license program and requirements for wholesale

distributors• New federal requirements for Third-Party Logistics providers

(3PLs)


DQSA Transaction Info/History/Statement (TransX)

• The law does NOT use the word “Pedigree”• Instead, it defines:

– Transaction Information: Description of the current single transaction

– Transaction History: The chain of ownership history for each drug (only necessary in phase 1)

– Transaction Statement: A statement of compliance for the current single transaction

– Together, referred to as “TransX”

• Wholesale distributors who buy from a manufacturer are given exemptions to some of the thoroughness of TransX elements


Phase 1 (Before 10 Years)• Serial numbers, lot number and expiration date in 2D

barcode will be required after 4 years • Serial numbers will not be legally required in TransX in

phase 1• Parties must implement a way to investigate/quarantine

“suspect” drugs• TransX may be exchanged in either paper or electronic

form, but after 4 years, manufacturers must send their information electronically

• TransX must be passed downstream starting January 1, 2015 (pedigree)

• U.S. FDA must publish guidance for format and exchange of TransX within 1 year


Concurrent with Phase 1• U.S. FDA required to hold at least 5 public meetings to collect

input on various topics– Scalability and capacity– System attributes– Best practices– Costs and benefits– Whether or not electronic tracing at package level is feasible, cost-

effective and needed to protect the public – Systems and processes, including aggregation and inference– Technical capabilities and legal authorities needed– Impact on patient safety, drug supply, cost burden & effect on access

to drugs

• At least one FDA/Industry pilot to test phase 2 technolgies


Phase 2 (After 10 Years)• Many details are left up to the FDA to define with

public/industry input• Transaction History will no longer be needed

– TransX will then be only “Transaction Information” and “Transaction Statement”

• Serial numbers must be included in TransX record• Data saved by each party: “One-up/One-down” system

Timelines Compared

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Agenda




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Meeting the DQSA with Technology

• U.S. FDA will publish technology guidelines next year• FDA already sanctioned GS1 “GTIN plus serial number” in 2010 for

drug package and case identification and serialization (SNI guidance)• Larger companies are interested in using GS1’s Electronic Product

Code Information Services (EPCIS) standard for TransX data retention and exchange

• Larger drug wholesale distributors may provide small pharmacy customers with cloud-based data retention and exchange capability at little or no cost

• GS1 US is very active, providing guidance on the application of GS1 standards for meeting the law

• GS1 Healthcare US members include many of the larger companies in the U.S. healthcare supply chains

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Why GS1 Standards?• Because the pharma industry is truly global, GS1 standards are

ideal because they offer:– Global Interoperability– Global Applicability

• One global format for all serial number formats and carrier technologies– GS1 Electronic Product Code (EPC)

• Barcodes• Radio Frequency IDentification (RFID)

• One data exchange and retention format for all serial number-based supply chain events: GS1 EPCIS


Dirk [email protected]

www.RxTrace.com

Dirk [email protected]

www.RxTrace.com

Questions?

2424

http://www.rxtrace.com/

http://www.rxtrace.com/

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