Monday, April 21, 2008

National Standards: It’s About Time! !

The movement to make the pharmacy supply chain safer just took a huge step forward with Friday’s introduction of H.R. 5839 Safeguarding America’s Pharmaceuticals Act of 2008. The bill is co-sponsored by Representatives Steve Buyer (R-IN), Gene Green (D-TX), Jim Matheson (D-UT), and Mike Rogers (R-MI).

I enthusiastically support this bill, which finally offers Federal preemption of the multiple disorganized, uncoordinated, and underfunded state-level mandates. Ultimately, patients will be the biggest beneficiaries of a more secure supply chain.


Federal Preemption with Uniform National Standards – “no State or political subdivision of a State may establish or continue in effect any requirement with respect to statements of distribution history, manufacturer packing lists, unique standardized numerical identifiers, or drug identification and tracking systems for prescription drugs that is different from, or in addition to, any requirement under this subsection.’’ Got that, States? The bill also establishes new Federal minimum standards for wholesale licensing.

Phased Implementation – The Bill sensibly requires earlier compliance for “High-Risk Drugs.” The precise timing will depend on when the bill becomes law, but it looks like High-Risk Drugs would not have to serialized until mid-2011. (I touted a risk-based approach last July.) There are many places in the bill where the speed of implementation will be based on sensible factors such as “operational and technical feasibility.”

Support for “Independents” – A truly closed-loop, interoperable track-and-trace system based on serialization will require a massive infrastructure upgrade at the 150,000+ points of pharmacy dispensing in the U.S. The bill permits grants for technology upgrades to a “small pharmacy,” which is defined as “a pharmacy which is not owned (or operated) by a publicly traded company.” Of course, some privately-held pharmacies can be quite large (um, Duane Reade?), so this language will need to be cleaned up.

And the pedigree starts with… The bill also clears up a major area of disagreement between various state and federal definitions of pedigree: Where does pedigree begin? According to H.R. 5839, it begins with the Authorized Distributor of Record (ADR) that purchased directly from the manufacturer, a.k.a. “Direct Purchase Pedigree.”


H.R. 5839 Safeguarding America’s Pharmaceuticals Act of 2008 is only a bill, just sitting there on Capitol Hill. Nonetheless, here are a few implications if this bill becomes a law.

Amateur hour will be officially over. Today’s crazy patchwork of pedigree regulations creates uncertainty for everyone involved in the pharmacy supply chain. These decisions need to be made in a structured, logical, and public manner. Supply chain security regulations are too important to be left to the personal whims of a few volunteers at an underfunded state agency. Yes, I’m thinking about you, California State Board of Pharmacy!

Serialization will not be optional. The momentum for serialization is now inescapable, which is one reason that I joined the Advisory Board of Secure Symbology. Track-and-trace at the unit level only becomes possible with serialization, which is complex and must begin with the manufacturer/packager. At a minimum, serialization with pedigree requires: affixing a unique number during the packaging process; capturing and managing petabytes of data; adding pedigree information as the product moves down the supply chain; and then making these data easily (but securely) accessible. It also requires substantial lead time since serialization must happen during the drug packaging process, which can be months (or longer) from the time that the product is dispensed to a patient.

The pharmacy lobby will oppose national standards. I warned in December that pharmacists do not want pedigree. State Boards of Pharmacy – composed mainly of independent pharmacists – don’t want to lose local control (read: influence, power) and want to avoid any additional burdens on pharmacy operations. In fact, before the text of H.R. 5839 was even posted online, Steve Anderson of NACDS leapt into action with this statement asking Congress to “refrain from mandating serialization, e-pedigrees or track and trace requirements, since they are still experimental and will prove extraordinarily costly for pharmacies and other supply chain operators.” Unfortunately, pharmacies must close the loop if we are all to benefit from complete track-and-trace and ensure that pharmacy purchasing is not the weak link in the supply chain. Plus, wouldn't a single national standard lower compliance costs for NACDS members such as CVS Caremark or Walgreens (WAG)?


All in all, a very promising start for reducing counterfeits in the legitimate supply chain. Now, we just need to convince consumers to stop buying from shady online pharmacies.

BONUS FUN FACT: Did you know that "PEDIGREE" is a registered trademark of Mars, Inc., the makers of M&Ms? Woof!


  1. The noise coming out on the federal side regarding securing the supply chain is up several decibels. On March 20th, The FDA published two requests for comments and information around technologies for prescription drug tracking and tracing as well as standard numerical identifiers for validation, track & trace and authentication of prescription drugs. Add this to the introduction on April 17th of House Bill 5839 (“Safeguarding America’s Pharmaceuticals Act”) introducing uniformed federal pedigree legislation and it would seem that the message has been received on a federal level that one drug tracking standard is optimal over every state doing their own thing. The frenzied run up to the California delay was not a pretty site and the apparently the federal government took notice. Unless all key stake holders come together and develop a harmonized strategy to the growing problem of counterfeiting and supply chain security, we will likely be in the same position two years from now. The industry has been afforded a golden opportunity to control its own fate with the delay and call for standards by the FDA. It is time for the industry to answer the call and make it happen.

  2. I find it very interesting that the bill does not specify electronic pedigree. Will this be good or bad for RFID?

  3. The Healthcare Distribution Management Association (HDMA) just released their response to HR 5839. No surprise -- they like it.



  4. Federal control of this does seem to be a lot better than every state doing their own thing, but decades of experience make me think that retail pharmacies will wind up footing the bill for most, if not all, the costs of implementation and continued use.

    After all, we're already paying for patient information leaflets (PILs) and electronic transmission of claims, and every e-prescribed transmission into my pharmacy costs me 25 cents. (Doctor's finger spasms and hits the send button 3 times, 75 cents.)

    So I'm pretty certain, "grants" notwithstanding, retail pharmacy will somehow wind up paying for this program, too.

    Tom Connelly, RPh
    Sun Pharmacy

  5. Why not just fully implement the 1987 PDMA instead of "clarifying" the landscape with yet more legislation? Seems like PDMA + HDAAA 20007 pedigree standard requirements could get done well before the new bill will pass into law and become implemented.

    John Burnell
    Burnell Reports

  6. If we can find a secret to stop consumers from buying from "dark alleyways" online, the whole industry will be better off. For some reason though, whether it be ignorance or trying to save a buck, people seem to keep getting fooled out of their money and health online. It'll take a huge national news story to stop them (at least temporarily).

  7. I think the federal government has already lost control of this. Default will roll to the large states like California that have the most stringent regulation. And I don't think the states will cede ground to Washington once the ball is rolling. Does anyone think California will get pushed out beyond 2011 and/or diluted by industry? If not, I think that's effectively what we'll be living with.