Regulatory Compliance

"The absence of a pedigree is a principal challenge in ensuring the integrity of the drug distribution system."California Senate Majority Leader Liz Figueroa, sponsor of the California electronic pedigree law

The pharmaceutical industry is laser focused on current and pending requirements for drug tracing. These impact the entire supply chain, including pharmaceutical manufacturers, wholesale distributors and pharmacies.

Most companies are taking a comprehensive, global approach to their track-and-trace strategies, even though specific requirements vary by region. This comprehensive approach helps to ensure drug product availability and avoid disruptions in drug supply that may impact patient safety and revenue. This is particularly important when we look at the diverse regulatory landscape facing global pharmaceutical companies.

Federal PDMA and FDAAA

To protect patients from the potential harm of counterfeit drugs, the US federal government set a minimum bar requiring drug pedigrees nationwide, and nearly half the states have adopted more stringent pedigree requirements. The FDA regulations to the Prescription Drug Marketing Act passed by Congress in 1988 require the majority of wholesalers to provide pedigrees for every drug beginning December 1, 2006. The PDMA applies to all human prescription drugs and medical device kits containing prescription drugs.

To ensure that the necessary information is available to wholesalers who must provide pedigrees, the FDA recommends that all trading partners including manufacturers and Authorized Distributors of Record (ADRs) should provide pedigrees or, at a minimum, provide the details necessary to create a pedigree. The Federal PDMA pedigree requirement is in effect today, and thus pedigree is required in all states even though, in 2006, a Federal District Court enjoined a few specific details in the pedigree requirements.

Additionally, in 2003 the FDA issued the Combating Counterfeit Drugs report and initiative which drive industry focus on stronger tracing initiatives including broader pedigree adoption as well as serialization.

The US Congress expanded the FDA's oversight and drive several additional initiatives through the Food and Drug Administration Amendments Act (FDAAA) of 2007. Congress directed the FDA to define a unique standard identifier to facilitate drug track and trace.

"No patient in the nation can know with 100% certainty that the drugs they are getting are what they are purported to be -- or if they are, that they have not been in the trunk of someone's car, or sitting in a hot warehouse or a crack house in South Florida."Cesar Arias, Florida investigator

Florida

The Florida Prescription Drug Protection Act passed in 2003 requires all wholesale distributions of prescription drugs into or in the State of Florida to include a pedigree for each salable item. The pedigree must describe the product and the details of each transfer of ownership. Different types of pedigrees are required depending on the transaction (examples include: drop ship from manufacturer to pharmacy, direct transaction, return, repackaged drug, and medical device convenience kit which includes a pharmaceutical drug).

Drug manufacturers are required to provide drop ship pedigrees. While not required to supply other types of pedigrees, they must make information available for downstream supply chain partners to authenticate the first sale transaction. Pharmacies, hospitals, and other distributors to pharmaceutical consumers must accept and retain pedigrees from wholesalers. Repackaging operations are considered to be a wholesale distribution and require pedigrees. All pedigrees must be stored for three years and be easily viewed and printed.

California

California's ePedigree regulations significantly raise the bar for Patient Safety and compliance by requiring the entire supply chain to use electronic pedigrees and serialize product lines for protecting pharmaceuticals by January 2015. Elements of this extensive law that companies need to consider include:

• Pharmaceutical products must be serialized at the smallest package or immediate container
• Serialized electronic pedigrees must be initiated at manufacturing and managed at change of ownership points throughout the supply chain
• Pedigrees must be produced for essentially all product lines
• 3PL, contract packaging, contract manufacturing, and returns processing relationships may be involved and requirements for these organizations should be scrutinized closely
• Pedigrees must be transferred in an interoperable electronic format
• Returns to the wholesaler or pharmacy must be included on the pedigree
• Full compliance means not only your readiness but also the readiness of your entire trading network. Anything less risks product availability.

"Patients should really have the confidence that the drugs that they're taking are the ones that they were prescribed to take and that they're not diluted or relabeled or altered in any way."Jeb Bush, Governor of Florida, 2003

Global

Many countries with national healthcare are viewing track-and-trace as an innovative element of healthcare cost containment. Whereas in the United States much of the focus is on both ePedigree and Serialization as they relate to state and federal regulations, in other regions different priorities apply.

The European Federation of Pharmaceutical Industries and Associations (EFPIA) has issued a guidance document entitled "Packaging Standard for Counterfeit Resistant Packaging and its Implementation into International Supply Chains in Europe". In the May 2007 publication, EFPIA indicated their support for applying unit level, randomized 2D serial barcodes to pharmaceutical as a component of protecting patient safety and safeguarding the Pan-European drug supply.

Some European nations have already started to require some measure of serialization of drug products. Italy was one of the first European Union nations to implement a bar-code based system. In 2005, Italy introduced the "Bollini" which is a label that features the Italian product license number and a sequential number. Belgium also requires each medicine pack to feature sequentially numbered labels.

Part of the drive in Europe toward drug serialization is also focused on the larger healthcare process. For example, serial numbers are used as a key part of managing healthcare reimbursements in some countries.

Business Implications

Companies seeking to navigate the diverse regulatory landscape may want to consider several business issues as they create a compliance strategy and solution plan.

• Business operations. Full compliance will require significant enhancements to global manufacturing, packaging and distribution systems and business processes to support serialization and the production of serialized product pedigrees.
• IT strategy. Serialization and serialized pedigree solutions will need to tightly integrate into existing enterprise IT infrastructures such as SAP and Oracle, supporting not invalidating existing investments.
• Trading partner networks. Ultimately, serialization and electronic pedigree are all about the supply chain and collaborating with trading partners. Interoperability is a key requirement and companies will need to align not only pedigree and serialization data but also associated business processes with each trading partner.
• Global requirements. Most pharmaceutical companies operate globally and many drug products are produced in international locations. International regulations and standards, particularly those involving serialization data standards and labeling, must also be factored into any product track and trace strategy.

Where to Get Started?

"All too often, patients have received watered-down medication to their detriment and the financial benefit of unscrupulous individuals."Charlie Crist, Governor of Florida (former Florida Attorney General)

Strategy consulting

The SupplyScape Strategic Consulting team partners with companies to help them analyze key business and regulatory questions and build actionable plans for full compliance in the United States and worldwide. Strategy Consulting is led by industry experts who leverage deep field experience in pharmaceutical industry, supply chain strategy and operations, RFID and serialization technologies, and most importantly, proven approaches to leverage technology investments for business value.

Global pharmaceutical companies and their trading partners have engaged our consultants to:

• Develop business strategies for global compliance
• Conduct product portfolio risk assessments
• Quantify business value potential from compliance investments
• Create serialization management blueprints
• Develop actionable serialization and pedigree project plans

Pedigree and serialization solutions

SupplyScape's Nexus provides a foundation of core shared services, event management, and serialized pedigree data. Nexus helps connect users to their operations and companies to their trading partners, enhancing the ability to act upon rich serialization and pedigree data while collaboratively executing on shared business processes.

SupplyScape's Product Security solutions provide the full compliance foundation for serialization and pedigree requirements.

• E-Pedigree - E-Pedigree provides an integrated pedigree data management system for serialized and non-serialized products. Leveraging a nationally regulatory compliant and EPCglobal-certified ePedigree base, E-Pedigree supports existing production and distribution processes, protects IT system investments from SAP and others, and accelerates connectivity to trading partners.
• RxAuthentication - RxAuthentication enables companies to leverage serialized product information, including product location and EPC status, through a secure EPC repository and integrated portal. Triggered by events within the enterprise and throughout the supply chain, RxAuthentication delivers visibility into case and item-level identification for products tagged with either barcodes or RFID sensors.

"An electronic pedigree to minimize fraud and mischief is vital in protecting American consumers."Andrew Eschenbach
FDA Commissioner, 2006

Serialized Product Management Solutions (California Express)

Technology leaders Acsis, Hewlett-Packard, Nosco, Inc., SupplyScape, Systech International, and VeriSign have teamed up to create the California Express Solution - a comprehensive global solution for Serialization and ePedigree requirements.

The California Express Solution provides all the EPCglobal industry-standard components needed to:

• Build a complete strategy and implementation plan for serialization and ePedigree
• Define serial number management and carrier plans
• Integrate 2D Data Matrix and/or RFID technologies into labels and packaging
• Address changes to manufacturing, packaging lines and printed packaging components (labels, folding cartons, RFID, 2D, and line control)
• Implement electronic pedigree data management system
• Integrate with serialized product infrastructures like SAP Auto-ID Enterprise (AIE)