I’m pretty excited about the kickoff this Wednesday of the GS1 EPCglobal Software Action Group (SAG) Discovery Services Work Group which will take the business and technical requirements that were collected by an earlier group and turn them into an actual standard.  This will be the first new major technical standard GS1 has started for quite a few years.  The most recent kickoff I can remember was the GS1 Drug Pedigree Messaging Standard (DPMS) which kicked off back in late 2005 and completed in January 2007.  The GS1 Electronic Product Code Information Services (EPCIS) standard effort kicked off in late 2004 and completed in April 2007.  That gives you an idea of how long these things take.

The effort to create the business and technical requirements for Discovery Services started just about two years ago and completed this past December.  How long will it take to get to a ratified standard?  The GS1 Discovery Services Work Group Charter predicts it will be done in June of 2011, but predictions in charter documents are notoriously optimistic.  The EPCIS Charter predicted that standard would be ratified in August of 2005, for example—one third the time it actually took. 

This is not a bad thing in my opinion.  A Charter document needs to estimate how long the effort will take, but once things get rolling, GS1 EPCglobal takes as long as needed to get the standard right.  So how long will this one take?  Based on how long the requirements took, I’m guessing the development of this standard will take some time.  Right now, I’d guess it will be complete sometime in early 2012.  That would be two years.  Hmmm….  Almost feels too short.  We’ll see.

Standards development can be contentious.  If it’s done right, that is.  I’m talking about contentiousness along the lines of the Lincoln-Douglas debates or the crafting of the U.S. Constitution, only pitting different technical approaches against each other.  The GS1 EPCglobal SAG facilitation crew really knows what they are doing when it comes to facilitating contentious groups so the blood, sweat and tears invested are directed in a positive direction and results in a valuable standard in the end.  I worked with Mark Frey in the development of DPMS and I just can’t say enough good things about him.  According to the charter document, Mark will be involved in the Discovery Services group, as will Giselle Ow-Yang—a great start.  From these choices you can tell GS1 EPCglobal places a lot of importance on the success of this effort.

BUT WILL DISCOVERY SERVICES HOLD ANY VALUE FOR PHARMA?

Right now, I don’t think the pharma supply chain will be able to make use of Discovery Services for regulatory compliance with current or even future pedigree laws.  As far as I can tell, I’m the only person I know who sees it that way so let me explain.  It comes down to what Discovery Services is aimed at and how that differs from what pedigree laws are trying to accomplish.  There seems to be a disconnect between what people think a pedigree law is trying to accomplish and the reality.  That leads them to the misconception that something like Discovery Services has value for compliance.

I reach this, perhaps shocking conclusion from the following analysis.

FUNDAMENTAL LAW OF COMMERCE

In my first substantive essay in this blog I pointed out what I called a fundamental law of commerce.  That is, when regulations mandate that a product’s value is determined by the ability to show, at any time, specific information about the product’s history, then the buyer of that product must receive all of the necessary information from the seller at the same time the product is received.  That information is so intertwined with the product’s value that it actually becomes part of the product itself, and needs to move with it.  Supply Chain companies who buy products can’t rely on previous owners to hold information on their behalf without a contract to do so if the total value of those products depends entirely on the instant availability of that information at any unpredictable moment. 

This is the case with drugs in supply chains that operate under pedigree regulations.  If a regulatory inspector arrives at the door of one of these companies and asks to see the pedigree of any item they happen to pick randomly from the inventory, and the company cannot produce the pedigree because they are unable—for any of a myriad of reasons—to collect it from remote databases controlled by upstream trading partners, that item has zero value and the company should expect to be fined, or worse. 

When this scenario happens, more than likely the pedigrees of a lot of other units will also be unavailable at the same time for the same reason.  This single inspection at the wrong time–when an earlier owner’s database is, coincidentally, unavailable–could result in a significant part of the company’s inventory being impounded, large fines imposed and the opening of a wider investigation.  All because essential information was not in the control of the party that was responsible.

So, a distributed pedigree doesn’t work in a regulated supply chain.  But why doesn’t this issue get discussed more in industry groups that are trying to figure out how to create an interoperable, standard approach for the industry to follow to meet the current and future pedigree laws?  It’s because of a very interesting thing about this “fundamental law”:  for the most part, it has no impact on drug manufacturers. 

They don’t buy drugs, so, even if a distributed pedigree were selected as the industry solution, they would almost never need to access data on anyone else’s server to reconstruct a pedigree.  All pedigrees from their perspective are entirely stored on their own servers because they start them.  Because of this fact, drug manufacturers won’t “feel” this problem with a distributed pedigree.  Only wholesalers and pharmacies will “feel” it because they buy drugs from upstream trading partners.  Right now the pharmacies are not participating much in the search for a solution, and the number of wholesalers involved is not great.  The largest representation is from the manufacturing segment.

THE DEPUTIZED SUPPLY CHAIN

More recently I posted an essay on the “deputization” of the pharmaceutical supply chain by regulators.  This is a recent phenomenon where regulatory agencies have begun to require supply chain member companies to monitor the supply chain themselves.  It comes from the realization of two things by the regulators:

1. the supply chain is too massive for regulatory enforcement officers to inspect anywhere near enough transactions to detect illegitimate behavior;
2. the responsibility for supply chain security rests with the participants and not just with the regulators.

When you put these two concepts together, the only natural conclusion is that supply chain participants must self-monitor and report suspicious activity.

You can see this deputization in the way the Florida and California Pedigree Laws are written.  They both require companies who buy drugs in the supply chain to receive a pedigree for every drug purchased (although in Florida, wholesalers who buy directly from the manufacturer are allowed to initiate pedigrees).  They also require the recipient to check those received pedigrees for errors, inconsistencies and omissions—all before they are allowed to put the drugs they purchased into regular inventory.  Any irresolvable discrepancies must be reported and the drugs must be quarantined pending further investigation.

I hope it’s obvious to you that the buying company must have all of the prior supply chain history—the pedigree— of every drug before they can properly perform this analysis and before they can confidently place it into usable inventory.  Theoretically you could accomplish this with a network of distributed information servers, but the full set of pedigree data would also have to be passed down the supply chain, along with the drug, in addition to it being distributed.  However, the official pedigree—the one that companies and regulators would rely on—would remain the information that is passed.

THE POINT OF DISCOVERY SERVICES

On their website, GS1 EPCglobal answers the question, “What is ‘Discovery’?” this way:

“’Discovery’ is finding and obtaining all relevant visibility data, of which a party is authorized, when some of that data is under the control of other parties with whom no prior business relationship exists.”

They view the benefits of Discovery Services to include:

“Enable trading partners to discover all of the resources who may have information about things (who has data about EPCx? Where is their EPCIS located so I can ask about this data about EPCx?)                  

“Enable trading partners to exchange data in a secure way with parties that they may not have a prior direct business relationship                  

“Will ensure each party retains rights of ownership of its visibility data                  

“Will ensure that queries are authorized and authenticated”                  

Clearly Discovery Services has a value if your supply chain can get away with distributing visibility data across the supply chain, but I’ve already dismissed the utility of this approach for pedigree compliance above.  But if a push-model is used for compliance instead, what value are these benefits? 

THE TRUE VALUE OF DISCOVERY SERVICES IN THE PHARMACEUTICAL SUPPLY CHAIN

When you look at the future Discovery Services standard through this analysis, how can you conclude that it will contribute any value to pedigree compliance?  I don’t, but lots of other people, who have not seen my analysis, do.  But how about value from non-compliance uses?

When you think about it, the concept of pedigree—or chain-of-custody/ownership—is a historical view back “up” the supply chain, as viewed from the perspective of where a drug is right now.  That fulfills one side of the concept of “track and trace”.  Different people define that concept in different ways, but I subscribe to the group that believes that “trace” is the capability that is encased in the concept of “pedigree” (thus the name of my blog:  RxTrace).  In my view, a push-model pedigree completely fulfills the definition of a “trace”, but it does nothing to enable the other side of the coin:  “track”. 

“Track”—a consolidated forward view of exactly where drugs are right now in the supply chain from the perspective of previous owners—has value for things like recalls, regional emergency response, manufacturer production planning and wholesaler purchase planning to name a few. 

Tracking drugs may also make an important contribution to supply chain integrity by helping to detect diversion, theft and duplication of unique identifiers by counterfeiters, depending on the adoption model.  This is where the real value of Discovery Services lies for the pharma supply chain.  But tracking of drugs, and the use of Discovery Services as part of the implementation, has some thorny data ownership issues that will have to get solved.

So why am I so excited about the kickoff of the Discovery Services standard development work group?  I want to help find a way to solve those thorny data ownership issues that stand in the way of some of these “track” applications.  I think they will exist in all supply chains but perhaps pharma’s use case has the most thorns.  If we can find the right technical solution to that issue I think the supply chain will find the value in Discovery Services… It just won’t come from pedigree compliance. 

If you’ve stayed with me by reading this far, then you should join me on the work group.

In April of last year VHA, a nationwide network of community-owned health care systems, published a viewpoint essay on their website called “The Track to Improving Health Care will be Built with IT Standards”.  The posting was written by Mike Cummins, Chief Information Officer of VHA, Inc.  In it, he draws a great analogy between the widespread adoption of a standard railroad gauge by railroad companies 150 years ago as part of the U.S. Transcontinental Railway (as set in motion by President Abraham Lincoln), and the potential benefits of widespread adoption of health care IT standards.  Mike points out that some historians believe that the nationwide adoption of a single railway gauge accelerated the evolution of the greatness of the United States.  It’s well worth reading.

I think the problem Mike sees is that there are so many incompatible IT standards in use in the healthcare industry, with different ones in use in different pockets of the industry.  There are too many proprietary approaches in use, and too many standards in use in one segment of the industry that are incompatible with similar standards in use in another.  In effect, it’s a patchwork, yet each user can claim to be using a standard.  This was exactly the case with the railroads 150 years ago as Mike’s analogy implies.  Each railroad company, or groups of companies, had their favorite “standard” gauge, but which standard was “the best”…the one worthy of becoming the national standard?  I don’t know, but I do know they eventually figured it out and settled on a single gauge for the Transcontinental Railroad and that gauge become the defacto standard.  That allowed the country to be connected and, as Mike points out, historians have dawn a direct line from that agreement to economic expansion and eventual greatness.

Mike makes several proposals that I interpret as ways to cut through the patchwork of standards and get the industry to settle, like the railroad companies, on a single standard for some key technologies like Electronic Medical Records (EMR), Health Identification Numbers and Personal Health Records (PHR).  He calls for the broad, mandatory adoption of GS1barcodes, Global Location Numbers (GLN), Global Trade Item Numbers (GTIN) and accelerated plans by the FDA to mandate the usage of Unique Device Identification (UDI).  He calls for the use of part of the federal economic stimulus money to be used for standards development. 

SLEEPY PROPOSAL BECOMES HOT TOPIC

Fast forward to January 6, 2010.  On that date, VHA issued a press release calling for actions by the FDA and the Obama Administration that were the same as the Cummins posting from last April.  The title of the press release is “VHA Inc. and 12 of the Nation’s Largest Health Care Systems Call for Government to Mandate GS1 Data Standards to Improve Health Care”.  The press release did not include Mike’s railroad analogy.  While the Cummins essay didn’t appear to get any response on the internet, the VHA press release was widely copied by many news release websites.

The very next day, ModernHealthcare.com published a brief news article based on the VHA press release titled, “VHA, member hospitals push GS1 standards”.  One day later the same website posted a comment from Ted Almon, President and CEO of Claflin Co., a Rhode Island based healthcare distributor, about the press release.  The subject of Ted’s posted comment is “Why the rush for GS1 standards?”.  In it, Ted, a veteran of past standards development efforts which led to the formation of the Health Industry Bar Code Council (HIBCC), reasons, “Many industries much smaller than healthcare have dedicated SDOs, and I’m not entirely sure a single set of standards would even present any advantage with today’s technology.”  (SDO=Standards Development Organization.)  He asks “…why all of a sudden is there this pressure to choose GS1, and eschew our own SDO, which we control?”.

Why indeed.  I’ve grappled with questions similar to Ted’s for some time now.  I’m not sure I have the answers—especially answers that Ted and others might agree with—but I have some thoughts on the subject.

ARE GS1 OR HIBCC STANDARDS THE RIGHT “GAUGE”?

I think Mike is on the right track (pardon the pun) when he sees similarities between the current standards situation in the healthcare industry and the railroad industry just prior to the adoption of a single track gauge for the Transcontinental Railroad.  Sure, the industry has been able to make do with two different sets of standards, HIBCC and GS1, for quite a few years, but that does cause inefficiencies.  To remove as much cost as possible from healthcare we need to remove as many inefficiencies as possible, thus, wide adoption of a single family of identification standards is important.  In fact, I think adoption of a single family of identification standards in our industry will result in benefits well beyond simple cost reduction, much as the adoption of the single railroad gauge went far beyond it as well.

So which family of identification standards should the industry settle on, HIBCC or GS1?  I don’t know enough about HIBCC standards to provide a full set of pro’s and con’s, but I think perhaps I can cut to the chase by pointing out the following critical differences:

• GS1 standards are truly global, are HIBCC standards?
  Is there a HIBCC affiliate in China? Brazil? Slovenia?  I don’t think so.  GS1 has affiliates—boots on the ground—in over 100 countries.  GS1 standards are receiving increased attention by governments in many places.
• GS1 standards are cross-industry, HIBCC standards are unique to the healthcare industry
  Sure, GS1 is huge in the grocery supply chain, but it’s also huge in the general merchandise supply chain in which retail pharmacies and drug wholesalers participate in a big way.  I think that’s a good thing.
• GS1 standards are more widely adopted than HIBCC standards, even in the healthcare industry
  OK, I’ll grant you that HIBCC’s HIN is currently bigger than GS1’s GLN in the healthcare supply chain, but it’s just one of many location identifiers in use.  GS1’s GTIN is more widely used than HIBBC HIBC for product identification in the healthcare supply chain.  I don’t have an internet link for this bullet.  This one comes from personal observation.

With just these three bullet points I think the picture is pretty clear.  So clear, in fact, that I think, faced with these three points, even the railroadmen from 150 years ago would tell you that the GS1 family of standards are the better candidate for a U.S. standard than the HIBCC family.  In fact, the HIBCC family of standards comes off looking more like just one of the niche railroad gauges that faded away 150 years ago.

SO GS1 WINS?

Does all that mean that GS1 wins and deserves to be selected as the sole family of standards in the healthcare industry?  Maybe, but like many families, there are good relatives and there are bad relatives.  The GS1 location and product identification standards, GLN and GTIN, are not bad, although in my view, there exist unacknowledged but important differences between the allocation rules of GS1 GTINs and those of NDC’s.  I fear that there may be some gotcha’s when using GS1 GTIN’s to carry a regulated identifier, especially when there is no authority who can arbitrate and enforce conformance.  GDSN, EPCIS and even DPMS have problems that need work.  And we don’t know yet how GS1 will implement the Data Discovery Services standard whose development is just getting underway.  Perhaps these are the kinds of things that Ted was talking about when he wrote of the benefits of having “our own” dedicated SDO.

Many people have a problem with the high fees that GS1 charges, making it look as if they are a for-profit company (they are not-for-profit).  I’ve been one of those people in the past but, for the most part, I have come to terms with it and I now recognize that to get the benefits of a truly global family of standards, it’s going to cost some money.  I hope someone is monitoring exactly how the money is being spent, but I now expect that standards development, along with encouraging adoption, is going to have some significant costs associated with it.   The users of those standards should pay for it.  A fully volunteer organization cannot accomplish what GS1 is doing.

So here is where we are.

1. We need a single family of standards to maximize the efficiency of the healthcare industry;
2. From a high level, the family of standards from GS1 seems to have the inside track;
3. But GS1’s family of standards are not yet a perfect fit and some are currently insufficient for use in this industry;
4. The pharma side of the industry is facing a pedigree deadline in 2015 in California where it will be paramount that the industry has this decision well behind them.

Why the rush for GS1 standards?  At least on the pharma side, it’s because we’re behind schedule.