It's also a misnomer to call it "lot level" pedigree since only the manufacturer can use the lot as the primary basis for maintaining their supply chain history. Downstream segments must make use of receipt segregation techniques in addition to the lot/batch. Since the lot/batch number applied to each package is not machine readable, using it for tracing is inconsistent with a modern, high volume, high speed supply chain.

It's interesting to look at how costs are distributed across each segment of the supply chain for different approaches to pedigree. I'll try to expand on these thoughts and my observations in a future essay.

Another misconception is that pedigree is costly. From my experience of implementing California pedigree law compliance solutions, pedigree is only a fraction of the cost. It is the item-level serialization which consumes majority of the budget and generates huge amount of data. At the same serialization level, the economic impact of POD model won’t be much less compared to pedigree model. On the other hand, if we decouple pedigree from serialization, the cost of non-serialized pedigree (e.g. lot level) becomes very manageable.

Adam's comment makes several very good points. I encourage everyone to read his excellent essay regarding the demand side counterfeit drug problem (see the link in his response above). I was just telling my wife that any action that successfully tightens up the supply chain will cause criminals to focus directly on the pharmacies, and that there will be a need for pharmacies to actually advertise their safe buying practices in a way that allows customers to discriminate appropriately. But Adam makes an excellent point (made in his essay) that consumers will ultimately have to be given some way of independently checking the authenticity of the drugs they buy from pharmacies so they can feel more confident in their trust. The pharmacy segment in the U.S. has traditionally been opposed to anything that causes customers to feel less than totally confident in drugs coming from pharmacies (any pharmacy), but with re-importation looking more and more likely, I wonder if they might change their tune.

Finally, Anonymous (above) makes a point similar to one I made in my previous post, "Pedigree Models and Supply Chain Master Data".

These three comments demonstrate just how narrow the focus is in my blog. I don't cover economics. Fortunately Adam covers it quite well and he is able to provide that perspective in his DrugChannels blog and in his comments in my blog.

If a 'solution' doesn't satisfy the requirements, its not really a solution, is it?

Very thoughtful post.

Your point about POD may be valid, but pedigree laws could also increase the presence of counterfeits. The administrative burden of pedigree could tempt some pharmacies to engage in unsafe buying practices, especially if any type of importation law gets passed by Congress.

So, I think it's very hard for a technical solution to protect us from a "demand-side" counterfeiting problem. See my 2006 blog post for more: Our Demand Side Counterfeit Drug Problem.

Plus, pedigree laws are often driven by the personal whims of a few volunteers at underfunded state boards of pharmacy. Florida's law tries to make up for an asleep-at-the-switch Board of Pharmacy prior to 2003. The result has been a crazy patchwork of inconsistent laws and regulations.

Adam