Friday, January 25, 2008

Pedigree and Obscenity

If you’re like me, you probably don’t recognize Potter Stewart, the 92nd Associate Justice of the United States Supreme Court. But I bet you’ll recognize his famous test for obscenity: “I know it when I see it.

Unfortunately, the California Board of Pharmacy has apparently adopted Justice Stewart’s highly subjective and now-obsolete test as it evaluates the industry’s progress. Therefore, I predict that you can look forward to a Drug Channels post later in 2008 about either: (a) a delay to 2011, or (b) an injunction against the Board of Pharmacy preventing implementation on January 1, 2009.


Although I didn’t attend the Board of Pharmacy meeting on Wednesday, I have heard from a number of the 400-500 (!) people who were there.

The Board members were adamant about the 2009 implementation date and seemed quite frustrated with the messy, real-world problems associated with putting an interoperable system in place.

Representatives from industry – manufacturers, pharmacies, wholesalers, and technology providers – highlighted their ongoing progress and challenges while trying to (politely) remind the Board that life is not as simple as a PowerPoint slide.

And as I predicted on Tuesday, the Board did not vote on delaying implementation until 2011. Perhaps the board members are enjoying their moment in the sun and want it to last a big longer.


On Tuesday night, the Board released Questions and Answers relating To the California Electronic Prescription Drug Pedigree Law(s), which claims that their template “outlines criteria the board will apply to any request for a delay in implementation.” (See question 41 on page 11.)

I’ve reread the template at least 10 times, but I still can’t find a list of the criteria that define “evidence.” The Board received at least 35 written responses (discussed in CA Pedigree: Going to '11?) addressing the questions on the template and providing “specific, articulated evidence” (per item 3). Yet at least one of the board members allegedly stated that “none” of the responses were evidence-based!

And how should we interpret the statement that the Board's decision about 2011 will be “an aggregate rather than an individual determination, pertaining to the industry as a whole rather than to the readiness of any individual industry participant.”

Which companies or individuals are included in the “industry as a whole?” How many of them need to talk personally with the Board of Pharmacy? Will the Board delay if 80% of the (undefined) “industry” is ready? What if only 51% are ready? Would you believe 48.7% and a troop of very angry girl scouts?

I guess they’ll know it when they see it. Yikes!


Here are some facts on the California Board of Pharmacy drawn from the Governator’s proposed budget for 2008-2009:

2007-2008 budget (estimated): $9.7 million; 50.5 positions
2008-2009 budget (proposed): $10.0 million, 50.5 positions

So let me get this straight – the Board of Pharmacy’s budget will increase by 2.5 percent and add no new positions in the fiscal year that it implements e-pedigree?!? (My advice: start selling tickets to the enforcement committee meetings!)

Regular readers will remember that two well-funded, fully staffed Federal agencies were stymied in their attempts to bring drastic change to the pharmaceutical supply chain.

  • In December 2006, a preliminary injunction was granted against the FDA to stop implementation of the pedigree requirements of the Prescription Drug Marketing Act (PDMA).
  • In December 2007, a preliminary injunction was granted against CMS to stop implementation of the Average Manufacturer Price aspects of the Deficit Reduction Act.
Golly, I wonder what will happen in December 2008? Any lawyers out there who can enlighten me on the legal definition of "arbitrary and capricious"?


In the spirit of full disclosure, I want to let you know that I just joined the Advisory Board of Directors of Secure Symbology, a company that sells a cost-effective solution for unit level serialization of prescription drugs.

Don’t worry – I won’t start selling you stuff. Please feel free to contact me directly if you want to know more about why I chose Secure Symbology.


  1. Adam: You are being much too kind to the board. I was there and some of the presentations got very heated - like the professor from florida. I don't think the board trusts wholesalers or manufacturers, so can there be any evidence that will satisfy them?

  2. I have a couple of questions.

    Excluding the associations, if a drug manufacturer or wholesaler submitted a letter for the record stating they are not prepared to meet the requirements of California Law addressing 'public safety', and grandma dies as a result of a counterfeit drug between now and a delay date, what is the drug company defense when they are sued for contributing to the death of grandma by negligently not taking what is recognized by the CA State Legislature as a requirement for ensuring public safety in California ?

    Basicaly, a previous delay or pending delay is not the determination of the Board that the Law is not credible, or the basis for the law is not proper.

    The delay would be recognition the industry is not prepared to meet minimum requirements.

    What may appear to be a sound argument by the defense, can still be a distinct argument by the plaintiff.

    Can drug companies be compelled to 'prove' the drugs they sold in California are not counterfeit in a wrongful death or injury medical suit ?

    Without the legislation, the presumption of authenticity is in favor of the drug supply chain. But, with the legislation in California does the burden not shift to the drug company or drug wholesaler ?

  3. One of the most important decisions seems yet to be made: what happens when one drug manufacturer decides not to ship to California? Or they simply don’t comply? In the meeting, the Board kept asking what consequences the FDA considered or will consider for non-compliance. No reply. It doesn’t take a long history in supply chain to guess what happens if a manufacturer says, "hey, not going to play on these particular drugs in California.” Will California residents have to buy them online? Can you imagine the alarmist reactions from the press and consumers? No more ED drugs shipped to the coast! Town hall meetings in every city and county.
    Or maybe noncompliance results in $50k penalty payable to the Board? If that is the case, manufacturers might find it cost-efficient to pay the penalty.
    If a doctor prescribes a drug, does a pharmacy board really have the right to determine what drugs are available to California residents (recent rulings say heck no)?
    The proposal creates a supply chain control system of a scale the world has never seen. Yet, the pharma industry is endeared to legacy distribution systems. Pharma just implemented barcodes – decades behind other consumer categories. Now, California proposes they leap forward a couple of decades and become the world’s premier distribution channel with unprecedented data content. The operational affect is unknown. The impact on consumer health, unquestioned. Improvements to anti-counterfeiting and recalls, untested. The penny costs to the system, insurance providers, government, and consumers is undisclosed or likely, unknown. The effect on large proteins, unpublished. The ePedigree vendors allowed to play, undetermined. And our hearts certainly go out to small business because we DO know what will happen to them.

    It seems the Board sees themselves as visionaries with drug suppliers as their constituents and worker bees. They have waved their magic wand and blindly expect the nasty details to fall into place. Manufacturers and suppliers will align (maybe even hug). Standards will write and publish themselves with full agreement among the players. IT systems will be replaced - and new systems installed where they never existed. Print production lines upgraded. Vendors will be ready with open systems and aligned with their offerings. Tests run and rerun.

    I predict the board will be replaced by a new operationally-focused one. The new board will then begin the years of planning needed to execute such a supply chain control system. The current board will be allowed to keep their wand.

  4. Jon,

    Thanks for the thoughtful comments.

    You may be right about the outcome. Nonetheless, you paint a very disturbing and cynical picture of our system for regulating drug distribution.


  5. Adam,
    Key issue for all should be public safety. The board has not provided data on the route cause of counterfeits detected. They extrapolate WHO global data from countries that don't have as a controlled regulatory system and supplychain. Question-will increased cost and potential interuptions in supply force people outside the supplychain and into Caveat Emptor.
    In regard to recall control, lot system exists but not used by all trading partners. Guess longer and more numerous digits will be easier to control.

  6. FYI, here is a press release from Secure Symbology that was released after my blog post.

    Catalent And Secure Symbology Partner To Meet E-Pedigree Mandate