Magazine Article | October 1, 2009

E-Pedigree Track And Trace: What Are The Next Steps?

Source: Life Science Leader

By Cliff Mintz

The diversion, counterfeiting, and adulteration of prescription drugs have been on the rise in recent years. “Unfortunately, when some people see that there is money to be made, they do bad things,” says Bill Buzzeo of Cegedim Dendrite, a company that offers anticounterfeiting solutions to the drug industry. Indeed, fake, adulterated, and diverted prescription drugs are expected to account for $75 billion in losses for the drug industry next year. Adulterated and counterfeited drugs account for 1% of the prescription drugs in the United States and other developed nations. “That’s upwards of 40 million potential prescriptions being filled with counterfeit or adulterated drugs,” says Dean Hart, executive vice president of NanoGuardian, a division of Nanolink and a company that specializes in nanolithography, a novel anticounterfeiting solution. And, drug counterfeiting, adulteration, and diversion are much more severe in the developing world where they account for up to 30% of all prescription drugs. Recent reports indicate that drug counterfeiting rates are about 12% in Russia, 40% in Mexico, and as high as 80% in Nigeria. Finally, according to the report “The Counterfeiting Superhighway” prepared by the European Alliance for Access to Safe Medicines, 62% of all medicines purchased on the Internet were substandard or counterfeit, 49% had no packaging or safety information, and 30% of product packaging had been tampered with or damaged.

Despite the multitude of health risks posed by the skyrocketing rates of drug counterfeiting, there is still a remarkable amount of confusion among drug makers over how, when, and where to implement strategies to combat drug counterfeiting and secure increasingly porous drug distribution supply chains. This confusion likely stems from mixed signals from regulatory agencies and state legislatures regarding acceptable anticounterfeiting technologies, the cost of implementation, and a lack of industry standards for technologies that have been proposed. The recent renewed interest in combating counterfeiting and drug diversion has been mainly driven by the economic downturn, rising healthcare costs, and increasing amounts of counterfeited drugs found in prescription drug supply chains. According to NanoGuardian’s Hart, “Drug companies have a vested interest in fighting drug diversion and counterfeiting from financial, drug safety, and brand-protection perspectives. And most are taking these issues very seriously these days,” he says.

Anticounterfeiting And Drug Diversion Options
Anticounterfeiting and drug diversion technologies are classified as either overt or covert and can be implemented as “on-package” or “on-dose” solutions. Examples of overt on-package strategies, which are displayed on drug packaging and visible to would-be counterfeiters, include 2-D bar codes, color-shifting dyes, tamper-evident seals, and serialization technologies. Covert on-package tactics include specialized label threads, radio frequency identification (RFID) tags, hidden marks, and taggants (unique identifiers incorporated into product packaging). Hart contends that while on-package solutions provide an adequate first level of defense, “the quality of illicit copies has become so good that often only those who package the product at a manufacturer’s plant can determine its authenticity.” Consequently, on-package measures may not be sufficient, he adds.

The limitations of on-package solutions have allowed a number of companies to develop on-dose anticounterfeiting solutions. These solutions rely on the incorporation of unique identifiers on or in individual doses of medications. Like on-package options, on-dose technologies are classified as overt or covert. Covert solutions include color schemes, on-dose printing (for tablets and capsules), and special marking schemes. An example of an overt on-dose technology is taggants — microscopic particles of generally-regarded-as-safe (GRAS) excipients, DNA, or proteins that are incorporated into individual doses. Recently, NanoGuardian developed a nanoencryption technology that facilitates both overt and covert on–dose capabilities. More than 350 different codes can be introduced on a single dose, and drug authenticity is verified using specialized decoding detectors and software.

While budgetary constraints can sometimes limit the anticounterfeiting technology that is implemented, many larger companies opt to use more than one anticounterfeiting solution to ensure product integrity. Rick Seibert, VP of operations at Sharp Corporation, a company offering anticounterfeiting audit services to the drug industry, says, “Many of our larger customers use multiple technologies, whereas our smaller clients tend to employ the most robust, cost-effective solutions available. Generally speaking, the cost of a product usually dictates the technology chosen to ensure its integrity as it travels through the supply chain.” Interestingly, in July 2009, the FDA issued draft guidance on the use of physical-chemical identifiers (PCID) like pigments, inks, taggants, and flavors to combat counterfeiting and drug diversion. The issuance of this guidance suggests that the agency may be moving toward endorsing on-dose anticounterfeiting technologies to complement on-product strategies like RFID and 2-D bar codes to thwart drug diversion and counterfeiting.

The Pharmaceutical Supply Chain And E-Pedigree/track And Trace
The typical pharmaceutical supply chain and distribution network is often complex and composed of a matrix of primary distributors, secondary wholesalers, and retail pharmacies. For example, while 90% of the drugs in the United States are handled by three main wholesalers — AmerisourceBergen, Cardinal Health, and McKesson — there are more than 6,000 smaller secondary market wholesalers that buy up odd lots or excess product, repackage it, and then sell it back to other wholesalers, pharmacies, and other retailers at steeply discounted prices. This prompted the FDA to enact a federal law in 1987 requiring drug wholesalers or distributors that engage in interstate commerce to provide auditable, paper-based-chain-of-custody documentation or a pharmaceutical pedigree as part of the sale of any prescription drugs.

The cumbersome nature and numerous opportunities for falsification of paper documents coupled with the growing complexity of modern pharmaceutical supply chains induced the FDA to craft a new law in September 2007 mandating development (by 2010) of a “standardized numerical identifier to be applied to prescription drugs at the point of manufacturing and repackaging at the package or pallet level to facilitate identification, validation, authentication, tracking, and tracing of the drug throughout the supply chain.” This so-called e-pedigree or track-and-trace system is intended to be an auditable electronic record that tracks every step taken by a prescription drug as it moves from a factory to its final point of sale. The goal of the system is to track drug products (using a serialized identification number) at the unit level at the time they are manufactured, packaged, repackaged, sold, returned, or recalled.

Since the e-pedigree law was enacted in 2007, the FDA has requested information on a variety of technologies, including RFID, encryption, and nanotechnologies to evaluate their strengths and weaknesses, validation, standardization and implementation costs and their abilities to meet the e-pedigree track-and-trace requirements for product authentication. While the agency hasn’t yet identified a technology to meet its mandated March 2010 deadline, a summary of public comments submitted to the FDA in 2008 showed that RFID was the technology favored by the drug industry. Also, the report showed that using 2-D bar codes was another e-pedigree system favored by many drug manufacturers.

Prior to passage of the 2007 federal law, two states — Florida and California — decided to enact their own electronic pedigree laws and track-and-trace requirements. In 2004, the state of California passed legislation mandating serialization, e-pedigree, and track-and-trace systems for prescription drugs. The California State Board of Pharmacy recommended that RFID be the industry standard and that 2-D bar codes be used as a backup technology. California’s RFID-based e-pedigree system was supposed to be in place by 2007, but its implementation has already been delayed twice, with a new implementation date of 2011. In contrast with California, Florida eschewed RFID and 2-D bar codes in favor of an EDI (electronic data interchange) solution. While it is an improvement over paper-based systems, EDI transactions aren’t uniform across all suppliers, and data exchange rates have been found to be slow, suggesting that EDI may not be sufficient to meet e-pedigree track-and-trace mandated requirements.

While RFID and 2-D bar codes were early front-runners as e-pedigree track-and-trace solutions, it isn’t clear whether either of these technologies will emerge as the industry standard. Many anticounterfeiting experts and pharmaceutical brand managers consider RFID to be the ultimate solution to fight drug diversion and counterfeiting. This is because it is a non-line-of-sight technology that can store large amounts of easily modifiable product data. Also, RFID supporters contend that RFID tags are more difficult to counterfeit or duplicate than other methods (including 2-D bar codes), and they are very amenable to data serialization, an essential requirement of any e-pedigree track-and-trace system. However, there are a number of reasons why RFID may be difficult to implement as an e-pedigree solution. First, it is expensive, and many smaller companies may not possess the financial resources to implement it. Second, all members of the pharmaceutical supply chain, starting with drug manufacturers and ending with retail pharmacies, will have to adopt RFID. NanoGuardian’s Hart calculates that it will cost about $5.5 billion at the retail pharmacy level in the first year to implement RFID. “Who is going to pay for it?” he asks. Finally, in order for RFID to work, drug manufacturers, wholesalers, and retailers must agree upon standardized RFID equipment and software platforms to collect, store, manage, and analyze the large amount of data generated by RFID-based technology. Several larger pharmaceutical companies and drug distributors, like AmerisourceBergen, Cardinal Health, Pfizer, and Purdue Pharma, have already begun experimenting with RFID. However, it is important to note that the return on investment for implementation of RFID may be nominal before RFID industrywide standards are adopted.

Many drug companies also favor the use of 2-D bar codes because the technology is more commonplace and is much less expensive to implement than RFID. However, like RFID, 2-D bar codes also have their disadvantages. For example, unlike RFID, generating unique, identifiable bar codes and reading them can be labor-intensive. Further, adding or changing information in bar codes as a product moves through the supply change has been found to be challenging. Finally, bar code reading is a line-of-sight technology that can increase processing time, increase costs, and slow down track-and-trace capabilities.

Issues That Must Be Addressed
Drug makers and regulators agree that establishing an e-pedigree system will help ensure the security and safety of prescription drugs sold in the United States and elsewhere. However, there are several issues that must be addressed before any serialized, e-pedigree track-and-trace system — whether RFID, 2-D bar codes, or other solutions — can be implemented.

First and perhaps foremost is the adoption of industrywide, intraoperable standards for any technology chosen. These include standards for generations of unique, serialized product identification tag numbers, reader equipment, and software/middleware that will be used for data capture and analysis. Second, implementation costs must be reasonable enough so that all members of the supply chain — including the patient — will be able to purchase the technology to verify product authenticity. Finally, regulators and industry officials must agree upon and formalize best practices for use of these technologies.

What To Expect Next
Most anticounterfeiting experts agree that an e-pedigree track-and-trace system will help reduce drug counterfeiting and impede drug diversion. However, Cegedim Dendrite’s Buzzeo and NanoGuardian’s Hart both believe that other methods in addition to e-pedigree will be necessary to ensure drug authenticity and safety. “On-product measures like RFID may not be enough. E-pedigree technology should be complemented by on-dose solutions to ensure drug authentication and safety at the patient level,” says Hart. Similar sentiments were echoed by Buzzeo. “RFID is great technology, but are we going to be able to put RFID tags on every pallet, box, blister pack, and pill?” Like Hart and Buzzeo, Sharp’s Seibert thinks RFID is a powerful technology but it isn’t quite ready for implementation. “Maybe 5 to 10 years from now,” he predicts. However, he believes 2-D bar codes in conjunction with tamper-resistant packaging may be robust enough to serve as an interim anticountering solution as RFID and other e-pedigree technologies continue to evolve.

While the FDA has taken a lead in mandating the requirement for an e-pedigree track-and-trace solution, Hart and Buzzeo believe the agency will back off and individual states will be allowed to craft their own e-pedigree track-and-trace solutions. This precedent has already been established by California and Florida. However, this may change after the federal e-pedigree law is fully enacted by 2010.

Despite the federal and state mandates for e-pedigree track-and-trace systems, Buzzeo, Hart, and Seifert all believe that in the future drug manufacturers will use multiple methods to prevent drug counterfeiting and diversion at all points in the prescription drug supply chain. And, the level of protection will likely be contingent upon the value of a drug and likelihood that it will be counterfeited. For example, lifestyle and high-priced biotechnology drugs, which have the highest counterfeit and diversion rates, might require multiple technologies, whereas lesser-valued drugs require only a single anticounterfeiting solution. Finally, Sharp’s Seibert likens choosing anticounterfeiting solutions to buying a new car. “New car buyers usually have a range of choices to choose from. They can buy the basic model, the same model with a few options, or one that is fully loaded. The decision is based largely on need and how much money the buyer can afford to spend. This is the approach I believe drug manufacturers will take when selecting appropriate anticounterfeiting measures to ensure the integrity and authenticity of their products,” he says. Hopefully, whatever solutions are chosen, they will help reduce the rampant counterfeiting, adulteration, and drug diversion that is currently plaguing the global drug supply.