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 Healthcare
Russian Federation
Dirk Rodgers
December 10, 2013
Speaker
• Dirk Rodgers
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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)
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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
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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
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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
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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
1995
2000
2005
Copyright 2013 Dirk Rodgers Consulting, LLC
2010
Today
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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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
2000
2005
2010
2015
Today
Copyright 2013 Dirk Rodgers Consulting, LLC
2020
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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
2000
2005
2010
2015
Today
Copyright 2013 Dirk Rodgers Consulting, LLC
2020
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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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/
Copyright 2013 Dirk Rodgers Consulting, LLC
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HDMA Pedigree Regulation Map
Source: HDMA website, February 2013
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“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 preempt 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
Copyright 2013 Dirk Rodgers Consulting, LLC
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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
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Overview of U.S. DQSA of 2013
• Two major phases:
1.
2.
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Initial lot-based paper/electronic Pedigree for 10 years
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)
Copyright 2013 Dirk Rodgers Consulting, LLC
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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Phase 1 (Before 10 Years)
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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Concurrent with Phase 1
• U.S. FDA required to hold at least 5 public meetings to
collect input on various topics
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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Timelines Compared
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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
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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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
Copyright 2013 Dirk Rodgers Consulting, LLC
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Questions?
Dirk Rodgers
Dirk@DirkRodgers.com
www.RxTrace.com
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