Safe and Secure - Pharmaceutical Executive

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Safe and Secure
In the fight against counterfeits, pharma's best hopes are electronic product codes and RFID.But before they can work...


Pharmaceutical Executive


  • a central database, managed by a third party, that contains pointers to the current location and past history of every product
  • " company-by-company databases maintained by manufacturers or distributors and containing the current location and past history of all products produced or distributed by that company
  • a distributed, or "daisy chain" (one-up, one-down), database in which each company (manufacturers and distributors) records who it received the product from and to whom it was sent
  • an electronic pedigree document that accompanies each product, recording its life history as it travels through the supply chain.

Each approach has different economic, legal, and regulatory implications. The central-database approach requires the selection of a single entity to manage a shared service for all products—EPCglobal and VeriSign are the obvious choices. Access to the data under this approach would have to be strictly controlled, because no company would want to share its information with competitors.

The company-by-company approach would distribute the data and eliminate some concerns about an overly ambitious "database in the sky." But it would provide a few supply chain members with a view of the full supply chain and the ability to leverage it into near-real-time control. Clearly this would generate resistance. It could also extend companies' legal responsibilities into the supply chain, for example, by inserting them into the processing of product shipment and receiving up and down the chain, not to mention making them a center for counterfeiting investigations within the distribution chain.

In the daisy-chain model, each company maintains "from whom, to whom" records for each product. NACDS and others support this approach, and it is the system called for under the recent FDA food antiterrorism legislation. One weakness, however, is that if any link in the chain does not maintain full and accurate records, the pedigree breaks down. Also, both Florida and NABP model legislation require full pedigree to precede delivery of the product as medicines move through the distribution chain, so this approach could require changes in the law.

The electronic pedigree document model is a practical adaptation of the current state and federal approaches in an electronic setting. In this approach, manufacturers select the product identity approach that best meets their business needs and provide their customers with a digitally signed document containing the product's EPC number. As the product moves through the supply chain, each transaction is appended to the document and a new digital signature is added to the pedigree as certification of the authenticity of the information. Some of the technological and operational processes required to implement this system are already in place—such as Advanced Ship Notices (ASNs)—possibly making adoption easier. However, the full upstream history of custody, including transaction dates and companies, is available to each participant in the chain, as it is today in Florida. Even though the pedigree does not include pricing or discounting information, companies may resist having this much information available.

Although there are advantages and disadvantages to each approach, the point is that this basic dimension of any future electronic pedigree system has yet to be specified, and implementation depends on agreement or regulatory specification of a single approach.

Operational realities. Several business processes and other pragmatic realities will have to be ironed out to make an EPC/RFID system work. These issues could become a major consideration in the timely adoption of the system.

One example is how the system handles exceptions and inconsistencies. Exceptions will result from a variety of simple errors such as read errors, damaged tags, and equipment failures. How will these eventualities be handled, and who bears the risk of loss and the obligation to correct? "

Cost, of course, is an issue—not just the expense of obtaining tags and applying them to products, but the cost of readers, database systems, and the integration of all the pieces of the system. Some manufacturers currently advocate using bar codes, arguing that the cost of RFID tags and readers is too high and the technology is not ready for the quality standards required for pharma. The bar-code approach is indeed cheaper—by an order of magnitude—and would require only limited upgrades to work with current systems. But bar codes require "line of sight" to read numbers from the package. This would ultimately mean higher labor costs. There would also be additional costs to upgrade to RFID later on. Also, if criminals were able to create or steal a set of correct EPC product codes, it would be easier to print them on bar codes than to source or create encoded RFID chips.


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