Friday, June 20, 2008

JNJ: We Want Federal E-Pedigree Standards

Mike Rose, VP of Supply Chain Technology at Johnson and Johnson (JNJ), testified at Tuesday’s Senate Hearing called Protecting Consumers by Protecting Intellectual Property. He was refreshingly unambiguous on JNJ’s position regarding e-pedigree, saying:

Within the US, a federal standard is required for electronic pedigree.


The federal government can and should take the lead in establishing a single federal standard for electronic pedigree.

(You can read his full statement here.)

He’s absolutely correct. Complying with a grab bag of state laws does little more than add unnecessary costs without an equivalent increase in safety. Inconsistent state laws ignore the fact that today’s pharmaceutical supply chain is a national business for drug makers, large wholesalers, and multi-state pharmacy chains. Read my op-ed Securing the Supply Chain for more.

At the same time, pharmacists are mounting an effort to slow down or stop the movement to a national e-pedigree standard due in part to the implementation costs associated with track-and-trace. (See Pharmacists Haggle over Pedigree Costs.)

On Monday, I’ll look at the new NACDS/NCPA study that estimates first year track-and-trace costs to be $110,000 per pharmacy. Get ready for an industry-wide debate over a timely and heretofore unanswered question: How much supply chain security are we willing to pay for?


  1. AnonymousJune 20, 2008

    Mike Rose of J&J makes a great point about the need for a federal standard - of course there will be arguments over what that standard should be. However having one domestic standard to comply with removes some of the risk of guessing wrong on compliance with multiple and evolving state standards.

    At the same time, it is critical that lawmakers keep their eye on the ball. The stated purpose of all of the supply chain security laws is improving patient safety by limiting counterfeiting. The key question for lawmakers is how best to do that while preserving the cost structure of prescription drugs to the public.

  2. AnonymousJune 20, 2008

    Interesting Mike seems to suggest the pedigree would start with the distributor but as he mentions all other security features start at the manufacturer. Why not have pedigree or track and trace start at the manufacturer?

  3. AnonymousJune 20, 2008

    The california legislation that you linked in previous blog moves the date back to 2015. This will push the FDA and Congress to act sooner on a national pedigree standard once there is a new FDA commissioner. I just hope that it is something more than a rerun of the PDMA.

  4. AnonymousJune 20, 2008

    Adam, I look forward to your posting on the cost for the pharmacy. No way it will cost $110K for the first year for each pharmacy unless they are planning on stupid processes and including the costs not associated with actual T&T. Besides, isn't $110K just one prescription nowadays? If they used generic systems would that lower the costs of the first year? :)

  5. AnonymousJune 21, 2008

    I think it is a bit insincere for J&J to be endorsing a piece of legislation which takes pains to exclude J&J from participating. Of course, they support it – it doesn’t cost them a dime and removes any liability.

    What is more interesting is the statement by Ron Bone of McKesson on Behalf of HDMA. He said HDMA supports the bill for three reasons (at least, by his count):
    1. One standard, because it removes the State’s ability to enact pedigree requirements
    2. One standard, because it removes the State’s ability to enact pedigree requirements
    3. One standard

    He has certainly learned the tell em’ three times rule.

    This bill does not mandate serialization at the item level. While most of observers would say there is no other way, the bill simply asks for a report assessing “the cost-effectiveness and benefits of applying such technologies at the pallet, case, unit, and tablet levels…” If they only serialize to the pallet, which is a possibility, it won’t cost the pharmacists much. If they decide to serialize the tablet, we will have to rebuild and expand every pharmacy.