Monday, November 13, 2006

The FDA on PDMA

I’m blogging to you live from my hotel at the NACDS/HDMA RFID conference so I can opine real-time on the FDA’s hot-off-the-press pedigree documents.

The FDA released its final Compliance Policy Guide (CPG) and PDMA Q&A this morning shortly after Acting FDA Commissioner Andrew von Eschenbach addressed the conference. (All documents are available from the FDA’s new PDMA Resources page.) Ilisa Bernstein, Director of Pharmacy Affairs at FDA, also gave a presentation describing the Q&A.

Naturally, it’s a treat to hear directly from the FDA on the day new guidelines are released, even if the comments did not stray too far from the published documents. Here are three points that I took away from the presentations:

  • No more stays – The PDMA will be implemented on December 1, 2006. Dr. von Eschenbach indicated that the agency is considering no further stays, casting serious doubt on the legal actions being pursued by some secondary drug wholesalers. (See my earlier post Channel Conflict as Pedigree Looms.)
  • “Some must…all should” – Both FDA officials used the phrase “some must … all should” in their respective presentations. The PDMA excludes manufacturers and Authorized Distributors of Record (ADR) from the requirement to provide pedigree. To my ears, the phrase “… all should” indicates that the FDA does not want to see the ADR exclusion become a loophole to avoid pedigree.
  • Manufacturers gain leverage – The PDMA makes ADR designation more important. Manufacturers could use the concept of a “written agreement” associated with an ADR to enshrine supply chain business requirements that might otherwise be covered in fee-for-service or distribution service agreements. I predict that ADR agreements will play a role in the next round of fee-for-service negotiations.
Marketplace Impact

In my last PDMA post, I speculated on three possible outcomes from the PDMA:

  1. Wholesalers with an ADR relationship will pick up volume.
  2. Manufacturers will broaden their ADR networks.
  3. The marketplace will create a solution for pedigree.
The FDA’s “...all should” comments make option 3 seem the most likely.

Mark Parrish, newly appointed as CEO of Healthcare Supply Chain Services at Cardinal Health Inc (CAH), stated at the conference that Cardinal will continue to service some of its existing secondary wholesaler customers after December 1. AmerisourceBergen Corp. (ABC) highlighted its intention to provide pedigrees in a press release this afternoon. ABC noted that “…customers are charged fees that allow the Company to recover the cost of generating the pedigrees.” (I’ve heard that the monthly pedigree service fee is $5,000 for the first ship-to location, and $1,000 for each additional location.)

RFI-Do or RFI-Don’t?

Dr. von Eschenbach said that track-and-trace means "from the assembly line to the dispenser." Unfortunately, this year's RFID conference has once again provided little substance on the use of RFID by pharmacies to authenticate inbound product.

This is the major unspoken limitation in using RFID to make the supply chain more secure: How do we stop pharmacy buyers and consumers from purchasing outside of a theoretically secure supply chain? I refer to this challenge as Our Demand Side Counterfeit Drug Problem. It's the pachyderm in the parlor. And unless we start getting real about this problem, then we won't really be meeting the FDA's needs or securing the supply chain.

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