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Development of Drug E-Pedigree Systems in the United States Prospects for Business Application of Track and Trace Systems for Drug Verification Modernization.

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Presentation on theme: "Development of Drug E-Pedigree Systems in the United States Prospects for Business Application of Track and Trace Systems for Drug Verification Modernization."— Presentation transcript:

1 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 Modernization of Informational Processes in the Sphere of Healthcare Ministry of Healthcare Russian Federation Dirk Rodgers December 10, 2013

2 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

3 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 SKUs (average) Average distribution center handled 2,738 orders per day 80% of drug APIs are imported, 40% of finished drugs are imported 4 Sources: HDMA website, FDA website

5 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 5

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. … Copyright 2013 Dirk Rodgers Consulting, LLC PDMA bill becomes a law PDMA effective except pedigreeAmendments enactedFDA proposed rule published FDA final rule published, eff Rule stayed until Oct. 2001Rule stayed until Feb. 2002Rule stayed until April. 2003Rule stayed until April. 2004Rule stayed until Dec. 2006Rule in effect for 4 days when RxUSA files suit & judge stays Suit ends, FDA says it will not enforce certain pedigree provisions pending FDAAA 2007 actions Today

7 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, LLC7

8 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 Regulation adopted Regulation effective Today Regulation modified Copyright 2013 Dirk Rodgers Consulting, LLC

9 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 Regulation adopted 2009 effective date (abandoned) Today Current effective for manufacturers Current effective for distrib & repack Current effective for pharmacies 2007 effective date (abandoned) 2011 effective date (abandoned) Copyright 2013 Dirk Rodgers Consulting, LLC

10 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, LLC10

11 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 Copyright 2013 Dirk Rodgers Consulting, LLC11

12 HDMA Pedigree Regulation Map 12 Source: HDMA website, February 2013

13 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 Copyright 2013 Dirk Rodgers Consulting, LLC13

14 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 14

15 Overview of U.S. DQSA of 2013 Two major phases: 1.Initial lot-based paper/electronic Pedigree for 10 years 2.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, LLC15

16 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, LLC16

17 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 Copyright 2013 Dirk Rodgers Consulting, LLC17

18 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 Copyright 2013 Dirk Rodgers Consulting, LLC18

19 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, LLC19

20 Timelines Compared 20

21 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 21

22 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 GS1s 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, LLC22

23 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 23Copyright 2013 Dirk Rodgers Consulting, LLC

24 Dirk Rodgers Dirk Rodgers Questions? 24


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