Seeking Supply Chain Security

Jul 01, 2013


Jill Wechsler
Pharmaceutical production is a global industry, with increasingly long supply chains and greater reliance on vendors for raw materials and finished products. While these developments may reduce production costs and expand access to important medicines around the world, they also raise the risk of lax quality control and widespread drug diversion and counterfeiting. Drug shortages appear to be one result, raising calls for intense regulatory scrutiny. The proliferation of fake and substandard medicines also points to the need for better control over the pharmaceutical supply chain in the United States and overseas.

Congress addressed some of these problems in the FDA Safety & Innovation Act (FDASIA) of 2012 by requiring manufacturers to notify FDA of pending shortages. It also strengthened the agency's authority to oversee and block substandard imports, to inspect foreign manufacturers, and to levy stiffer penalties for drug counterfeiting. But FDASIA failed to establish a much-debated system for tracking drugs and medical products through the supply chain. That issue is now before Congress, along with proposals to strengthen FDA oversight of large-scale drug compounders. In both cases, the House and Senate are far apart, raising doubts about effective action.

Compounding and tracking

That is somewhat surprising, because there's usually a sharp response on Capitol Hill when contaminated medicines lead to dozens of deaths and widespread illness. The legislators generally agree on the need for clearer standards to prevent broad distribution of illegally compounded injectible drugs, yet pharmacists are leery of greater FDA control over these operations. A bipartisan Senate measure would provide FDA with authority to regulate a new category of commercial compounders—large-scale operators that sell risky injectibles across state lines without prior individual prescriptions. FDA supports this move, as well as provisions that leave "traditional" pharmacy compounders under state law.

However, House Republicans oppose giving FDA more control over compounders, claiming that the agency already has sufficient authority to regulate illegal operators and should do that more effectively. At recent hearings before the House Energy & Commerce Committee, Republicans attacked FDA officials for failing to move aggressively against large compounders that caused hundreds of serious fungal infections. FDA reported on its recent efforts to beef up inspections of "high risk" compounders and close down violative operators. But agency inspectors had to obtain court orders to enter some facilities that tried to block their visits, illustrating the inadequacy of the current law.

The Senate Health, Education, Labor & Pensions (HELP) Committee linked its compounding bill to a measure establishing an electronic tracking system for prescription drugs. The legislation requires lot-level tracking initially, but sets up a 10-year process for adopting a unit-level traceability system, as preferred by FDA. However, legislation approved by the full House in June establishes an "enhanced" drug tracking system—but without a clear path to unit-level reporting.

Both House and Senate track-and-trace bills pre-empt state laws, a move championed by pharma companies anxious to halt adoption of diverse drug tracking programs on the state level. But broad pre-emption has drawn opposition from California members of Congress who oppose any federal drug tracking system that is less stringent than the one set for implementation at home in 2015. Congressional leaders have talked about enacting legislation by August, but agreement may take much longer.