Supply Chain: Scanning the Future - Pharmaceutical Executive

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Supply Chain: Scanning the Future


Pharmaceutical Executive


Legislation: a closer look

United States. The idea of unit serialization is not new—the California Board of Pharmacy has been working on a bill that will require an electronic pedigree at the unit level for over a decade. Under the legislation that is scheduled to go live on January 1, 2015, every change of ownership of an individual unit as it passes through the supply chain needs to be recorded and available for inspection at the pharmacy level. At least 50 percent of a company's product that is sold in the state will need to comply with the new legislation by the start of 2015, with the remainder on January 1, 2016.

As the California initiative gets closer to implementation, the federal government is working on legislation simultaneously that would supersede the California law. The House and Senate approved a draft version of the Drug Quality and Security Act in late September. Should the proposed legislation be enacted ( http://www.govtrack.us/ gives it a 42 percent chance of being signed into law), it would supplant any and all state legislation on track and trace and ePedigree.

Despite the uncertainty surrounding which legislation will ultimately become the standard, industry is focused on the January 2015 deadline for implementation and the California ePedigree legislation, as it is likely to come on line first.

"I would say that nearly half of the firms that we have polled have already started their pilot testing," Jamie Hintlian, principal, Americas at EY, told Pharm Exec. "It is a very tight pack. No one is out front in the sense that they have 100 percent of their lines and products serialized. I think most are going to come close to hitting the 50 percent mark by January 2015, but there are concerns. Concerns about how much do you invest versus hedge because maybe there will be a federal law that trumps California. While many would like to wait and see, they are not ready to play chicken with the state of California, the 12th largest economy in the world."

The proposed legislation gaining traction in Congress does not go as far as the California initiative, at least at the start. The main points of the proposed bill, H.R. 3204, include:

Four years after enactment, manufacturers need to serialize each package of product distributed within the United States.

At the start of 2015 for manufacturers and July 2015 for dispensers—as product changes ownership, companies need to provide or receive transaction information, history, and statements in a single document (paper or electronic). Four years from enactment, all information needs to be exchanged electronically.

Ten years after enactment transaction information needs to be exchanged in an electronic matter at the unit level starting at the point of manufacture.

The glaring difference between the California and Federal proposals is the timeline required for full serialization at the unit level. California calls for unit serialization on January 1, 2015, while the Federal legislation requires the same four years after the Drug Quality and Security Act takes effect. The differences are forcing industry to decide whether to pull for a particular piece of legislation. But which one?

"To some degree, industry's preference for one piece of legislation over the other will depend on where organizations are on the readiness continuum," Hintlian says. "It appears based on the recent September agreement between the House and Senate, the federal direction may be closer to California's direction, as it requires serialization at the package level. In this case, organizations that have made progress with their California compliance programs will likely continue with their programs, although some may alter their timelines for deployment based on how the federal direction is finalized."

European Union. Like their US counterparts, EU lawmakers are in the midst of hammering out some form of serialization legislation. The Directive 201⅙2/EU the European Parliament issued in June of 2011 gives EU member states until 2016 to enact serialization legislation. Just like in the United States the exact legislation is unclear—with each of the 28 Member States being charged with creating its own legislation things are bound to get increasingly complicated.

Unlike the proposed US legislation, the likely EU laws will focus on the authentication of the product at the time of dispensing, instead of the individual movement of the product through the entire supply chain. When a pharmacist scans a blister pack (the most common form of dispensing in Europe) at the counter, the product's serial number would be run through a database to check if that particular number was flagged for any reason. If the product was flagged the pharmacist would be unable to dispense.


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