AmerisourceBergen's pedigree was basically an electronic version of a paper document. It was a PDF that could be printed out, but recipients weren't able to sign it or update it for a transaction. When it came time to set up a system to meet the California mandate, the wholesaler opted for a more advanced electronic product code information system (EPCIS). Unlike an EDI connection, EPCIS does not rely on a single point of connection; instead, it is a Web-services connection, much like a traditional Internet connection.

"We are seeing a tremendous increase in speed of transmission," Reid says. "Ninety-nine percent of the transactions that we transmit occur within five seconds. That's as close to real-time data as it gets when exchanging with trading partners."

The way the system works is straightforward. A manufacturer populates data into a single electronic file that is associated to a product being shipped to the wholesaler. The file is then sent through the Web to Amerisource's EPCIS system, which stores data from the e-pedigree file in a database. When the distributor receives the product, its unique identifier is scanned and associated with the original e-pedigree document. Finally, a transmission is sent notifying the manufacturer of receipt. "As the product is distributed, our downstream customers will be able to send back information as to where the product is going," Reid says. "This process includes the manufacturer through the entire life cycle of the product."

As manufacturers rush to install new pedigree systems in California, they also are selecting which form of serialization to use. As it relates to supply chain management, serialization is the placing of a unique number on every unit of sale, whether that is a pill bottle, a case, or a pallet. In Florida, there was no regulation for serialization, and companies, if they serialized at all, tagged cases with basic bar codes or 2D bar codes (advanced bar codes that store more information and are read with a special camera).

Although California has yet to issue requirements regarding which serialization method to use, five major pharma companies are currently piloting RFID technology to track expensive and highly counterfeited drugs. RFID tags include tiny microchips that can store more information than linear bar codes. These chips are costlier than paper labels and require special equipment and software to read and write to them.

Although pricey, serialization with RFID is expected to reduce logistical errors and address some aspects of supply chain security. Companies are using RFID-generated data to measure how efficiently a product is moving through the supply chain and to track a product from the point of manufacture to the pharmacist. "In this industry, you're dealing with medically critical products," Hintlian says. "It isn't soap or consumer goods, where if you have 90 percent product visibility it's OK."

Purdue, whose pain reliever OxyContin (oxycodone) is one of the most counterfeited drugs, was an early adopter of RFID. The company is currently piloting a program with the wholesaler H.D. Smith in which every bottle of OxyContin that passes through the wholesaler is tagged with an RFID chip.

"One could certainly argue that Purdue did all the legwork and spent all the money," says Aaron Graham, vice president of corporate security and chief security officer at Purdue. "Now other companies can just come along and take our lessons learned and implement them for cheaper. That's true, but we felt the urgency to do what we can do to curb counterfeiting and diversion."

Track and Trace

A huge benefit of choosing RFID over traditional linear bar codes is the ability to use it as a track-and-trace solution. Track-and-trace systems are designed to help manufacturers understand how the product moves through their supply chain, where it ends up, and where it is getting stalled or diverted.

For example, Pfizer established an RFID pilot with its distributor, McKesson, in which the software relays information back to Pfizer every time the product hits a certain point in the supply chain. Pfizer can see easily when the shipment leaves the warehouse, when it leaves the distributor, and when it lands at, say, Rite Aid.