FDA forces the issue on drug tracking

Agency orders use of electronic system to fight counterfeit prescriptions

The prescription drug market

Drug counterfeiting is on the rise. The Food and Drug Administration expects the industry's move to improved and integrated documentation, including the use of radio frequency identification tags, to hinder the forgers. The reason drug counterfeiting is the huge market it is:

$500 billion-plus: World spending on prescription drugs in 2004

$231 billion: U.S. spending in 2004, about 8 cents of every health care dollar

North America accounts for 47 percent of all prescription drug spending in the world; Europe 28 percent; Japan 11 percent.

10 percent of all prescription drugs are counterfeit. In some poor countires, the rate is as high as 50 percent.

1 percent of prescription drugs in the U.S. are counterfeit, but it's growing.

$75 billion: The expected amount of counterfeit drug sales by 2010.

Sources: FDA, World Health Organization, IBM Center for the Business of Government report: 'RFID: the Right Frequency for Government.'

After nearly 20 years of gently prodding the pharmaceutical industry to adopt electronic track-and-trace technology, the Food and Drug Administration has decided to push.

As drug counterfeiting becomes more sophisticated and prevalent, FDA officials are requiring once and for all that distributors ensure the prescription drugs they sell are tracked throughout the supply chain, using documentation that could include radio frequency identification tags.

Electronic or paper documentation establishes a pedigree to protect consumers and industry against prescription drug counterfeiting.

'Industry needs to pick up the speed in implementing electronic pedigrees and the track-and-trace technologies to facilitate them,' said FDA acting commissioner Andrew von Eschenbach at a recent RFID in Health Care Industry Adoption Summit in Washington. 'This would allow tracking drugs from the assembly line to the dispenser by being able to replace the paper pedigree with an electronic version that cannot be easily forged or tampered with.'

Distributors document the authenticity of their product and transaction history to each customer, who then appends his data for the next customer, and so on, all the way to the retail pharmacy or hospital.

Promising technology

Electronic pedigree built on radio frequency identification is the most promising technology and will provide a far more effective safety net than paper, von Eschenbach said.

FDA, an agency of the Health and Human Services Department, now requires a paper or electronic pedigree under the Prescription Drug Marketing Act enacted in 1988 because industry has dragged its feet on a voluntary pedigree. But under recent guidance, the rule took effect Dec. 1.

The agency delayed the pedigree provision for several years because it expected the technology to be in wide use by 2007. That didn't happen. 'FDA can no longer indefinitely delay having pedigrees,' von Eschenbach said.

Drug counterfeiting is growing and the perpetrators are becoming increasingly sophisticated, technically proficient and well-financed, he said.

Counterfeiters are targeting the U.S. market because that's where the market value of the drugs is the highest, said Paul Chang, RFID lead executive for IBM's Software Group in Baltimore.

FDA said in its compliance guidance that it would focus initial enforcement efforts on the drugs most susceptible to counterfeiting and diversion, those that are expensive and common.

To create a paper pedigree currently, drug wholesalers use batch or shipment information, much of it gathered manually or taken from other systems, Chang said. RFID would capture the product data automatically.

'If a pedigree is generated using RFID, you can actually get down to the unit of use, to the individual bottles rather than just having a pedigree for a group of products, which is the way it is done today,' Chang said.

And adding a unique serial number for each bottle further associates the bottle with a pedigree.

FDA's documentation requirement should hasten adoption of electronic pedigree, Chang said.

'For the volume that U.S. wholesalers deal with, paper pedigree is not practical. It would halt their process,' he said.

Several industrywide pilots led by large distributors are producing e-pedigrees with RFID tags and capturing transactions, Chang said.

States also are pushing the adoption of formal documentation, especially electronic pedigrees, he said. California and Florida have passed stringent laws, 10 other states have some type of drug pedigree law and 19 states have introduced e-pedigree bills.

Developing a standard

California's law mandates specific requirements, and distributors must implement e-pedigrees there by 2009.

Industry doesn't want multiple pedigree requirements, so its representatives are beginning to work with states and FDA to develop a standard, Chang said.

The pharmaceutical supply chain industry is assembling a working group of pharmaceutical industry stakeholders to agree on a target date for implementing a consistent track-and-trace system across the industry, said Mark Parrish, chairman of the Healthcare Distribution Management Association and CEO of Cardinal Health Inc.'s Healthcare Supply Chain Services sector of Dublin, Ohio.

Industry needs to consider the safety and security of the supply chain, as well as the activities of federal, state and foreign governments.

'These agencies are growing impatient. It's my belief we face a mandate from this frustrated constituency of our industry unless we act swiftly,' Parrish said.

Industry has made progress, such as purchasing pharmaceutical products only from the manufacturers, advocating and working for anti-counterfeiting measures, and pursuing interim supply-chain security improvements. But the 'let's take it slow and learn approach' is no longer viable, he said.

Besides authenticating drug products, e-pedigrees using RFID also provide business benefits, such as resolving discrepancies over drug products and making returns easier, Chang said.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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