Connect the Dots

COUNTERFEITING IS A THORN IN THE SIDE of many industries, impacting everything from wristwatches to toys, film, music CDs, and more. However, the issue is amplified when one considers the impact counterfeiting can have on consumers' health—even their lives—when tainted or fake products make their way through the pharmaceutical supply chain and wind up in patients' medicine cabinets. Placebo drugs from counterfeiters and other problems related to a non-secure drug supply chain are no longer acceptable or necessary risks.

To rectify the situation, various states and countries have passed or are in the process of passing regulations to address the counterfeiting problem. At this point, more questions than answers have surfaced, stalling efforts to implement new systems and technologies, such as electronic pedigree and serialization, which can help companies send drugs securely through the supply chain until they reach patients.

To build the foundation for this approach, companies must implement a system of tracking, tracing, and serialization using the right technology for monitoring and identifying products. Such a system could include RFID, 2-D bar coding, or in cases where it makes sense, human-readable tagging. Certainly, the implementation of this infrastructure will be difficult. But the value that can be derived from ePedigrees—which can improve patient safety, operational efficiency, and profitability in fairly profound ways—far outweighs the cost.

California and Beyond

In the past, product tracking was limited to drugs that were more likely to face diversion. But now, California has passed legislation requiring item-level serialization and ePedigree for all pharmaceutical products, along with associated inter-operable systems for exchanging data. (Originally set for 2009, the deadline to be ePedigree compliant has been pushed back to January 1, 2011.) The California law is accompanied by a felony provision for non-compliance. Thirty-three other US states have passed or are considering passing similar legislation.

Meanwhile, California's legislation has paved the way for new federal considerations that could eventually eliminate the state-by-state approach. US Reps. Steve Buyer (R-IN) and Jim Matheson (D-UT) joined a hearing of the House Committee on Energy and Commerce for a bill that would mandate FDA to generate a unified track-and-trace pedigree standard for pharmaceuticals passing through the supply chain. The sponsors hope that their bill, the Safeguarding Pharmaceuticals Act of 2008 (HR 5839), will be included in FDA's Globalization Act, a broader piece of legislation the committee is currently preparing to present to the House.

When it comes to supply chain management, much more will change in the years to come. Some companies already recognize this, and while many focused early pilot programs and plans solely on California, there is a need to go global. With the uptick in interest among regulators worldwide, the industry must consider the possibility that serialization, pedigree, or similar requirements may soon be a reality around the world, with time frames for implementation converging with California's. There's also been a widening from the narrow focus on compliance to new ePedigree laws to a broader consideration of the strategic value that item-level serialization and ePedigree technologies could provide with their ability to improve a company's visibility and control of its supply chain. (See "Shareholder Value.)

Undeniably, implementing item-level serialization and ePed-igree is no small task. Unless companies address how to integrate individual initiatives across the supply chain, and how information generated in the process can be shared among all parties involved, the industry runs the risk of creating a costly and confusing approach to supply chain integrity. On the other hand, the benefits of improved patient safety, quality, integrity, and availability of standards make a compelling case for stepping up to the challenge. However, if they are going to meet mandates, companies must begin working now to enable their supply chain to be fully tracked, traced, serialized, and pedigree compliant.