Last week we learned that 11 people were charged with the record-breaking $75 Million drug heist from the Eli Lilly warehouse in Enfield, Connecticut back in March of 2010 (see the excellent article by Jay Weaver in the Miami Herald, including a copy of one of the multiple indictments).  Importantly, all of the stolen drugs from the Lilly warehouse were apparently recovered before they could be re-introduced into the legitimate supply chain.  But this investigation and the charges go well beyond the infamous Lilly warehouse theft.  They include other pharmaceutical, liquor, cigarette and cell phone cargo thefts around the country, allegedly perpetrated by members of the same criminal organization.  Cracking this organization could end up disrupting the most prolific source of cargo theft in the United States over the last five years.

Congratulations are due to the law enforcement organizations who contributed to the investigation and to bringing the charges.  They include DEA, ATF, FBI, U.S. Attorney of Florida, Miami-Dade Police Department, Florida Highway Patrol, U.S. Attorney of Illinois and U.S. Attorney of New Jersey.

This episode highlights one of the things I call the built-in protections of the U.S. pharmaceutical supply chain—the things that, combined, result in the U.S. having the safest supply chain in the world.  In this case, it is strong and cooperative law enforcement organizations.  While far from perfect, would you trade our system of justice, including law enforcement, with that of any other country in the world?  I don’t think you would (unless you’re one of the Villa brothers or their associates!).

But what are the other components that result in the safest drug supply chain in the world?  It’s certainly doesn’t occur by accident, so what are the built-in protections?

MY LIST OF THE BUILT-IN PROTECTIONS

As far as I can tell, no one has done a formal study to isolate the complete list of reasons why the drug supply chain here is the safest in the world.  My list is certainly not a formal study but it includes the things that I could think of.  Make sure you submit a comment below to add anything I’ve missed.  I’m sure there are several.

• Licenses
  You can’t become a member of the legitimate pharmaceutical supply chain—whether manufacturer, repackager, distributor, 3PL, pharmacist, pharmacy, doctor, nurse or hospital without obtaining at least one, and often multiple licenses.  To obtain and retain the necessary licenses applicants need to periodically demonstrate that they are qualified to fill the role they are applying for.  Most of these licenses require substantial investments in time and/or money to initiate and maintain.
  
  
• Penalties
  The U.S. Federal and State governments have established certain penalties for crimes in the pharmaceutical supply chain.  I think most people would agree that they are currently too low considering how damaging these crimes can be to innocent people (see my essay “STEP #1: Raise Penalties For Drug Crimes To Reflect The Widespread Harm They Can Inflict”), but at least we have penalties that can be applied when criminals are caught.
  
  
• Strong and cooperative law enforcement organizations
  As the episode last week highlights, this is an indispensable ingredient!
  
  
• A “closed” distribution network
  The requirement that all supply chain parties obtain licenses, combined with the fact that drugs cannot be reimported (see my essay, “Safe Prescription Drug Reimportation: An Oxymoron”), results in a “closed” supply chain.  Not just anyone can leap into the legitimate supply chain and start buying and selling drugs.  If you’re going to get into this business, you need to have some resources behind you that make it clear that you are legitimate and you place the interest of patients high in your list of priorities.  A vital part of this component is for trading partners to verify that those they are buying from and selling to possess valid and current licenses.  This is one of the weakest links in the U.S. supply chain as demonstrated by crimes that have occurred in the last five years (see my essays “How Counterfeit Avastin Penetrated the U.S. Supply Chain”, “Lessons from ‘Drug Theft Goes Big’” and “STEP #1: Raise Penalties For Drug Crimes To Reflect The Widespread Harm They Can Inflict”).
  
  
• Commitment by large distributors to only buy direct from the manufacturer
  About six years ago the largest U.S. distributors, representing about 75% of the drugs distributed in the U.S. legitimate supply chain, publicly committed to only buy their stocks directly from the drug manufacturers (see my essay “Do We Even Need To Mandate Drug Pedigrees Anymore?”).  This was a big and important change because prior to that they all had business units whose purpose was to buy some of their stocks from the secondary market—overstock drugs sold by non-manufacturers.  This practice was found to open the door to criminals selling illegitimate drugs—including counterfeit, diverted, up-labeled, improperly stored, tampered, etc.—back into the legitimate supply chain.  Many of the crimes documented by Katherine Eban in her book “Dangerous Doses…” may have been made easier as an unintended result of this type of buying practice.  By making that pledge, this door was closed, at least for that 75% of drugs that come through these organizations.  However, this is a voluntary pledge that not all drug distributors in the U.S. are even able to make.  Again, Katherine Eban documented a case that showed this is an ongoing weakness in the U.S. supply chain (see Eban’s engaging and eye-opening article at CNN/Money online, “Drug Theft Goes Big”).
  
  
• The general low tolerance for crime and corruption by the American public
  Americans have what I call a general low tolerance for crime and corruption compared with many places in the world.  We generally expect our government and system of commerce to be free of the kinds of activities that often lead to illegitimacy.  This may turn out to be one of the most difficult components of a safe drug supply chain for countries in the world to emulate.  You can adopt all of the other components I have listed above, but if the public accepts crime and corruption as the norm, you are going to have crime and corruption, and your drug supply is not going to be safe as a result.  Fortunately the U.S. isn’t the only country in the world whose public has a low tolerance for these things.  I would bet that the public tolerance for general crime and corruption is closely correlated to the safety of a given country’s drug supply.  It would be an interesting thing to study.

CAN WE DO EVEN BETTER?

Even with all of the things listed above going for us, criminals still attack our drug supply.  But that’s going to happen any time you have something as lucrative as our drug supply has become no matter what protections you impose.  Criminals are always going to be attracted by the high value of drugs in the U.S. market.  You can’t prevent criminals from making attempts, but in an ideal world, the built-in protections would always block them.

In my opinion, we have a system today that is remarkably resistant to those criminals.  Last week’s arrests demonstrated that resistance.  As long as criminals can always be detected, caught, charged, prosecuted and their work is prevented from harming patients—as it appears will occur in this case—the built-in protections are a smashing success.  What more needs to be done?

But not all crimes have been prevented by our current built-in protections.  Is there anything more we can do to reduce the criminal success rate even farther?  Do we need to augment our existing built-in protections with new ones?  If so, which new protections should be built-in?

I think it is possible to do so but considering the low success rate of drug supply chain crimes in the U.S. supply chain today (see my essay “Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack”), we may be within the realm of diminishing returns.  Further improvements will require careful study to determine the weaknesses that criminals are able to take advantage of today to ensure that any new protection we add actually has a positive impact on those specific vulnerabilities and does so with the least cost.

So far the closest thing I’ve seen to that kind of study was published by the FDA last fall with the publication of “FDA Preliminary Report: Review of Counterfeit and Diversion Criminal Case Information”.  It is a start, but it is too superficial, is not representative of today (the study only looked at FDA Office of Criminal Investigation (OCI) cases investigated between 2003-2008) and does not look at possible additional protections.  The report concludes:

“…the results [of the review] may not be representative of current drug supply chain trends.  This review is intended to provide some insight into the schemes, types of products, and supply chain participants involved.  We recognize that to conduct a more in-depth analysis and to achieve a full understanding of the supply chain complexities and the possible sources of sampling bias, additional data sources, such as those from industry, would be necessary.  This report provides results from an initial review of the OCI case information and does not contain statistical inferences, future trend predictions or opinions.  FDA expects to conduct further analysis and report as appropriate.”

WHAT ABOUT DRUG PEDIGREES?

I chose not to include existing pedigree regulations—like the Federal Prescription Drug Marketing Act (PDMA) and the Florida drug pedigree law—in my list because I don’t think they have contributed to the protection of the supply chain.  I don’t think that will surprise anyone (leave a comment below if this opinion surprises you) because the regulations that came from the respective laws apply to so few drugs in the supply chain and they primarily only affect distributors.  These regulations add cost but no real protection.  This is the kind of reaction to crime we need to avoid in the future.

You might think my negative opinion of the PDMA and Florida law would also apply to the California drug pedigree law, but the differences between it and those less effective laws address many of their shortcomings (see my essay, “The California Pedigree Law” for a catalog of the differences).  The biggest problem with the California law is that it results in a “big bang” deployment of drug pedigrees in the California supply chain.  A big bang won’t work because the leap in technology used in the supply chain is too great for such a short time span (2 ½ years).  The approach I advocated in my essay, “Plateaus of Pharma Supply Chain Security”, and then clarified in the essay, “SNI’s Are Not Enough In a Plateau-Based Supply Chain Security Approach” (see how complex this work is, it needed a follow-up clarification!), was an attempt to address that problem.

The folks from the Prescription Drug Security Alliance (PDSA) apparently agree that the problem is the “big bang” nature of the California law because their RxTEC proposal also appears to be an attempt to address that characteristic (see my essay, “What If RxTEC Isn’t Adopted?”).  In any attempt to address the “big bang” problem the first plateau/stepping stone is not going to offer much additional protection against criminal activity, and that’s true of both my recommended approach and of the RxTEC proposal.  The first steps are designed to deploy some of the necessary technologies throughout the supply chain and get companies familiar with them so that later plateaus/stepping stones can make use of those technologies smoothly to finally gain the protections sought.

The biggest problem with the RxTEC proposal is that it only describes the first plateau/stepping stone and so you can’t tell how or when the actual protection will occur in the implied later plateaus/stepping stones.  You can’t tell if those future protections will address the vulnerabilities of today’s supply chain because they aren’t identified.  On the other hand, in my RxTrace essays I advocated a step-wise approach where experts would fill in the blanks of each step/plateau/stepping stone.  The specifics I included in the essays for each plateau were intended to be examples of what might be done, not necessarily specific proposals.

A FORMULA FOR IMPROVING SUPPLY CHAIN PROTECTION

Everyone seems to leap to the solution without studying the problem first.  In my view the formula for improving the protection of the U.S. drug supply chain is logical.  What it needed is to first find some way to get the industry and regulators to rally around the step-wise approach in general—no specifics yet.  That shouldn’t be hard to do…the members of the PDSA are apparently already there.  Then study recent crimes that were “successful” to identify the current vulnerabilities in the supply chain.  Then determine alternative approaches that would address those vulnerabilities as new built-in protections (including costs).  Next, select the lowest cost approach that addresses the identified vulnerabilities and finally figure out the steps and timeframes needed to make the necessary technology widespread.  That may take some time to accomplish but any other approach is like shooting in the dark.  No one is going to be satisfied with the results.

In this essay I’ve certainly left something for everyone to comment on.  Submit one below.

Dirk.

Over the last year in GS1, in many of the members of the U.S. pharma supply chain and even in the FDA, the focus has turned to the analysis and discussion of three classes of electronic pedigree models:

• Fully Centralized,
• Semi-Centralized, and
• Fully Distributed.

I’ve discussed some of the pros and cons of these models here in RxTrace too (see “The Viability of Global Track & Trace Models”, “Should Regulations Dictate Technology?”, and “Could This Be Your Future Track & Trace/ePedigree Exchange Solution?”).

One of the characteristics included in many of these discussions is the “points of failure” of each model.  For example, I’ve heard it said several times that the Fully Centralized model suffers from a “single point of failure”, with the implication being that Fully Distributed models do not have this problem.  In fact, this is incorrect and in reality, both the Fully and Semi-Centralized models are much less likely to fail than models that fall within the Fully Distributed category when “failure” is defined as not being able to provide an ePedigree on demand in any given instance.

RELIABILITY ENGINEERING OF COMPLEX SYSTEMS

Wikipedia has a pretty good article on Reliability Engineering so I’ll spare you the background of the discipline that studies points of failure.  The mistake people sometimes make when comparing the centralized and distributed ePedigree model classes is to think that a single central repository is like “putting all your eggs in one basket”, and the distributed models is like “spreading your eggs out”, but this is wrong.  When it comes to the ability to produce an ePedigree on demand in a given instance, a model where all of the data is held in a single location is going to come out better in the failure analysis than one where the data is fragmented and spread out among multiple distributed databases and needs to be collected to produce a complete ePedigree.

In fact, all things being equal in each repository, the likelihood of failure would be at least n times greater, where n is the number of distributed repositories holding the fragmented ePedigree data.  That’s because, all things being equal in each repository, if any one of the distributed repositories experiences a failure, the overall system fails because it is incapable of producing the ePedigree.

BUT ALL THINGS WON’T BE EQUAL

In a Fully Centralized or Semi-Centralized ePedigree model the central repositories would be designed and maintained under contracts issued by multiple parties who would share an interest in high availability (HA) and disaster recovery (DR) so you can bet that there would be multiple online copies of the data hidden behind the façade of a single point of access.  More than likely those multiple copies would include copies that are widely separated geographically to mitigate the risks of major weather events (hurricanes, tornadoes, ice storms, etc.), natural disasters (tsunamis, fires, earthquakes, floods, etc.) and man-made disasters (terrorist attacks, war, etc.).  Even Twitter applies these principles to ensure that we won’t have to miss out on the latest celebrity drivel during and after one of these disasters.

The investment in the centralized repositories would be spread across multiple parties so more could be spent on ensuring that the data is protected without causing any one participant to pay excessively.  The costs would be spread out.

But in a Fully Distributed ePedigree model each data contributor—each supply chain participant—would be independently responsible for designing and maintaining their own repository to hold their fragment of the ePedigrees for the drugs they make, buy, sell and/or dispense.  Even many of the larger corporations in the supply chain may not have the expertise in-house—or the willingness—to apply the principles of HA and DR when designing their repositories.  It is extremely unlikely that all members would be able to do what is necessary to minimize the odds that some disaster would prevent them from providing their fragment of the ePedigrees requested.

For this reason we can’t use the phrase “all things being equal” between the repositories in the two centralized models and the distributed models.  Things are not going to be equal, and so the odds of a failure in the distributed models would be much worse than even n times greater than those of the centralized models.

WOULD A CRIMINAL CONTRIBUTE THEIR PEDIGREE FRAGMENT?

Now let’s throw into our scenario what happens when one of the supply chain participants is actually a criminal in disguise (for an example of how that can occur, see my essay “Lessons from ‘Drug Theft Goes Big’”).  In either of the two centralized models they would need to supply their ePedigree fragment data to the centralized repository before they could sell a given drug package.  The central repository would need to validate the data they contributed and if it doesn’t check out, the criminal activity would be exposed immediately and the illegitimate drug would not be able to move further down the supply chain.

But in a distributed approach the criminal wouldn’t need to supply their ePedigree fragments until later, perhaps only when someone becomes suspicious and requests the full ePedigree for a particular package of drugs.  When the criminal receives a request to supply their ePedigree fragment for a package that they know has an illegitimate history do you think they would supply that data?  Certainly not!  They would claim that they are having “system problems” and if pressed, the data would get “lost” somehow.  They are criminals, after all, and that data would be self-incriminating!

I hope you can see that a centralized ePedigree model is actually much less susceptible to failure—whether unintentional or intentional—than a distributed model.  I’ve grown to really appreciate the centralized models—particularly the semi-centralized model for free-enterprise countries.  I don’t see any characteristic where a distributed model outperforms the supply chain protections of a centralized model.  Do you?  Leave a comment below and set me straight!

Dirk.

I did not participate in the development of the Pharmaceutical Traceability Enhancement Code (RxTEC), a proposed Congressional bill that was created by the industry lobbying group known as the Pharmaceutical Distribution Security Alliance (PDSA).  In fact, while I was aware that a group had been formed last year I wasn’t aware that they were working on drafting an actual proposed bill until their discussion draft (dated February 27, 2012) appeared on the internet about 10 days ago.  I first saw it on Ed Silverman’s Pharmalot blog.

I also saw a presentation by one of the members of the PDSA last week that touched on the RxTEC proposal.  It was characterized as a “stepping-stone” to full traceability in the U.S. supply chain someday down the road.  In other words, the PDSA apparently means that their RxTEC proposal isn’t the final destination but it is only the first step toward that ideal.  At least, that’s how I interpreted that “stepping-stone” comment.

PLATEAUS OF SECURITY

Now this is a concept that is familiar to me.  In fact, as an idea stripped of all of the RxTEC-specific details, it is identical to the idea beneath the approach I proposed in a pair of RxTrace essays last May and June called “Plateaus of Pharma Supply Chain Security” and “SNI’s Are Not Enough In a Plateau-Based Supply Chain Security Approach”.

This single underlying idea originates, on both accounts, from the fact that the amount of illegitimate activities within the U.S. supply chain is really quite small compared with the rest of the world (see my essay, “Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack”), and to reduce it further will take significant and carefully thought out investments.  It would be very easy to throw money at this problem, but there are lots of very costly potential “solutions” that wouldn’t have any impact at all on the problem.  The goal must be to have the most positive impact on the problem using the least investment necessary.

In my “plateau” essays I proposed that the best way to achieve improved supply chain security without bankrupting companies and/or causing supply disruptions was to produce a roadmap that included a series of “plateaus of security”—a concept that is identical to “stepping-stones”.  I envisioned that the success of this approach would be measured by the following outcomes:

1. Criminals cannot introduce illegitimate drugs into the legitimate supply chain without being detected well before patients are threatened;
   
   
2. Criminals who attempt to scam the system are more easily identified and more easily prosecuted using evidence produced by the new system;
   
   
3. Legitimate supply chain members can quickly and clearly differentiate between likely criminal activity and innocent unintended errors;
   
   
4. The number of businesses in the supply chain who enter bankruptcy as the result of the additional compliance costs is minimized;
   
   
5. The cost added to finished pharmaceuticals delivered to patients as the result of the new complexity is minimized.

I proposed that a properly defined system would have the entire roadmap defined from the beginning so that solution providers could work on the next plateau/stepping-stone prior to any deadline to ensure that it could be reached with the least expense.  One problem with the RxTEC proposal is that it only identifies the first stepping-stone.  It is unlikely that outcomes 1, 2 or 3 will be achieved after the first step/plateau/phase of any multi-phase approach, not just RxTEC.

One important feature of my plateaus idea was that the dates for every plateau would not need to be defined at the beginning.  In fact, if the success criteria were met at any plateau prior to the final plateau, there would be no need to continue to the next one unless and until it was found that criminals were able to circumvent the safeguards in the current one.  For that reason, the deadlines and even the technology for the later plateaus would not need to be carved in stone from the beginning.  Only the concept of the later plateaus would need to be defined at the beginning.

The goal would be to protect patients and the supply chain with mandates that require the least investments and only those that are absolutely necessary to achieve that protection.  Of course if companies find a non-compliance-related benefit by moving to later plateaus before it might be necessary for security reasons, they may move forward voluntarily.

EVEN MORE AGREEMENT BETWEEN RxTEC AND RxTRACE

Even when you look at the details, the RxTEC proposal shares some of those that I included in mine.  For example, the RxTEC data that would be encoded on each drug package includes the SNI, lot and serial number.  I made the point that if you aren’t going to move to a full track & trace or ePedigree system for a period of years after the first plateau then you would really need to include the lot and expiration date on each package so that you could get some benefits from that first plateau.  Here’s how I put it:

“If you were to do a big bang going from zero to full supply chain ePedigree system in a short period of time (like in 2 ½ years as the current California Pedigree Law does), all you would really need are GS1 SGTIN’s (Serialized Global Trade Item Numbers) to fulfill the SNI requirement (see my essay “FDA Aligns with GS1 SGTIN For SNDC“).  That’s because, in this instance, everyone is going to have some kind of repository that would be able to tell them everything they need to know about a given unit of drugs, all keyed off of that SNI.

“But if you imagine that my plateaus idea were to be implemented, it would take a number of years between the time that all drugs contain SNI’s and the time when a full pedigree or track & trace system is fully operational.  During the time of the interim plateaus, especially the first few, all any company would have is the SNI’s that they read off of each package of the drugs they handle.  There would be no data repository containing information about the drugs and no data exchanged.”

[…]

“What would be very helpful on each package of drugs is the lot number and expiration date in addition to the SGTIN—not as optional data elements, but everyone would need to supply them.  With these three data elements—readable by electronic reading equipment—on every drug package, big benefits would start right away in the first plateau without any data repository or communication needed.  These includes:

• Efficient SGTIN-based recall execution;
• Efficient full-lot-based recall execution;
• Efficient stock rotation based on expiration dates;
• Efficient SGTIN-based stolen product monitoring.”

[…]

“At some point I think we will see the addition of more information on drug packages than just the NDC and serial number in electronic-readable form, no matter if my ‘plateaus of security’ concept is ever picked up or not, but the timing is hard to tell.  Without those additional data elements the industry will be forced to implement a full ePedigree or Track & Trace system to get any value out of the SNI’s, something that more and more people are opposed to as they see what it will cost.”

The PDSA seems to agree with that.  The RxTEC proposal also includes increased penalties for drug counterfeiters, something I also proposed in my essay last November that I called “STEP #1: Raise Penalties For Drug Crimes To Reflect The Widespread Harm They Can Inflict”.  Fortunately the U.S. Senate passed (unanimously!) last week a bill that would do just that.

BUT RxTEC GOES WELL BEYOND RxTRACE

RxTEC includes a number of features that go well beyond anything I have ever proposed.  It is a kind of a “catchall” of pet changes to pharma regulations that members of the supply chain would like to see done—some of them for quite a while now.  Here is a partial list:

• Interim pedigree provisions similar to those that were proposed in the failed Buyer Matheson ePedigree bill proposed last year.   This “pedigree” for an authorized distributor of record (ADR) is simply a statement printed on their invoices that says that the drugs were purchased from the manufacturer.  Distributors who are not ADRs would have to provide
  
  “…a statement, whether in paper or electronic form, identifying each wholesale distribution of such prescription drug, back to the manufacturer or to the [ADR] for such prescription drug…”
  
  See the RxTEC proposal for additional provisions and the details.  The interim pedigree provisions would take effect six months after enactment and would last until the RxTEC system is required, six years after enactment.  This approach seems to address the argument that was at the center of the RxUSA v. HHS court challenge.  (See my essay, “Impact of RxUSA v. HHS On Future Pedigree Legislation”.)  However, the use of the term “paper” for a pedigree seems like a step backward to me.
  
  
• Federal licensure of wholesale distributors of drugs in a way that complements and standardizes existing state licensing.  Effective six months after enactment.
  
  
• Federal licensure of Third-Party Logistics (3PL) providers, drug manufacturers and drug repackagers.  Effective six months after enactment.
  
  
• Electronic drug information (referred to as “E-Labeling” in the proposal) that would require drug manufacturers and repackagers to replace today’s paper “outsert” drug information sheets with electronic versions.  Effective one year after enactment.  This is a great idea and it should be combined with a requirement for the development of a standardized lookup service(s) (an “app for that”) so that medical professionals and patients can simply scan the SNI on their cell phone, tablet or computer and they would be presented with the electronic drug information.
  
  
• Stiffer requirements for online pharmacies to help reduce the incidence of illegitimate online drug selling.  Effective between six months and one year after enactment.  This is a very noble attempt to address the problem of illegitimate online drug sellers which is a much bigger problem today than the problem of illegitimate drugs in the legitimate supply chain.  I hope it has the desire effect.
  
  
• Formalized creation of a Pharmaceutical Distribution Chain Community group that would allow the industry to make recommendations to the FDA related to supply chain safety, security and RxTEC implementation.  It seems like the PDSA is trying to build themselves directly into the FDA as a branch with the power to insert text into the Federal Register and on the FDA’s website.  On the surface it sounds like a good idea as a mechanism that would allow the FDA to consult with industry, but I think it would go too far in providing the industry with special influence within the FDA and could jeopardize the patient advocacy mission of the FDA.

THE PROBLEMS WITH RxTEC

RxTEC is far from perfect.  That’s not surprising considering that it was developed by a committee of people from organizations with widely diverse interests.  I’ve been in those situations before and I know how the result can appear a little odd to people who didn’t go through the debates during the construction of the document.  I assume that’s where some of this stuff came from:

1.  Mandating very specific technology
Regular readers of RxTrace will know that I believe that there is a place for mandating specific technology inside of a regulation.  That place is to ensure interoperability in areas where there are too many options (see my essay “Should Regulations Dictate Technology?”).  Lots of people disagree with that, including most of the respondents to the recent FDA RFC for the consideration of replacing the linear barcode requirement with some other, more modern technology (see my essay “Will the FDA Accept RFID for Drug Identification?”).  Paradoxically, many of the organizations who oppose idea of the FDA identifying a specific identification technology to replace linear barcodes are members of the PDSA—the organization who is now trying to do just that in a Congressional bill proposal which is much worse than doing it in a regulation.

I stand by my belief that the FDA should specify one technology (either UHF RFID or 2D barcodes) for the linear barcode replacement.  But even I think it is wildly inappropriate to identify specific technologies within a Congressional bill as the RxTEC discussion draft proposes!

RxTEC would specifically mandate GS1’s SGTIN for the Standardized Numeric Identifier (SNI) and mandate that it be depicted, along with the lot and expiration date, within a DataMatrix 2D barcode (for at least the first 12 years) on each individual package.  Remember, this would end up being in a federal law.  That means it would literally take an Act of Congress to change to a new, more modern technology before the first 12 years are up!  About the only thing worse would be if they amended the Constitution to include it.  If the members of the PDSA want it that badly why did so many of them recommend that the FDA not identify any specific technology to replace the linear barcode requirement?

No.  Technology mandates intended to establish interoperability should be made by the regulatory agency in regulations that come out of a much less-specific wording in the law.  In this instance the law should simply require the FDA to work with the industry and appropriate consensus-based standards organizations to select the technologies or standards and leave it at that.  RxTEC is way too prescriptive here.

2.  RxTEC data use and availability
The proposal doesn’t define the term “RxTEC data”, but it does define the term “RxTEC” to mean a data carrier holding the NDC, SNI (which is somewhat redundant, by the way), the lot and expiration date.  Throughout the document it is clear that in this first “stepping-stone” no one is required to ever use or even read the SNI.  That appears to be one of the foundational principles of RxTEC.  It implements “lot-based traceability” on a one-up, one-down basis, and despite the inclusion of the SNI (a unit-level serial number), the proposal is intentionally not a unit-level traceability system.

For a first phase, that seems very practical, but Section 301 in TITLE III includes a provision that would allow the FDA to

“…request RxTEC data from all pharmaceutical distribution chain participants in the event of a recall, or as determined necessary by the Secretary to investigate a suspect product.”

Even the States could request RxTEC data.  The problem is that “RxTEC” is defined to include the SNI (the unique serial number that no one is required to read or use) so if the Secretary can request “RxTEC data”, does that mean that the participants really do have to read and keep track of the SNI just in case the FDA needs it?  I suppose the FDA could request it, but since the proposed bill wouldn’t require anyone to read it, they just wouldn’t get it.  Something needs a little work there.

3.  Tying the hands of the FDA rather than requiring the FDA to work with the industry
It seems to me that Section 201 of TITLE II of the RxTEC proposal goes way overboard in tying the hands of the FDA.  Under the heading “ENSURING FLEXIBILITY” the proposal lists twelve things that the regulations developed by the FDA when implementing RxTEC must conform to.  Some are reasonable, but is it really a good idea to specifically block the FDA from:

• Prescribing or proscribing specific technologies for the maintenance of data;
• Prescribing or proscribing specific methods of verification (just visually glancing at the product appears to be sufficient for verification according to other sections);
• Requiring the manufacturer to aggregate unit level data to cases or pallets;
• Requiring dispensers or wholesalers to verify product at the unit level;
• Requiring a record of the complete previous distribution history of the drug from the point of origin of such drug or point of receipt?

Those provision make RxTEC sound more like a roadblock rather than “a stepping-stone” to full traceability down the road.

In my view a lot of the bulk of Section 201 of the proposed bill could be reduced to a few sentences that direct the FDA to develop a multi-phase (multi-plateau, or multi-stepping-stone—take your pick) solution for protecting the supply chain from illegitimate activities (counterfeiting, tampering, theft/reintroduction, diversion, etc.).  It could mandate that there be at least X number of phases to ensure that the leap to each phase isn’t too great, and it could mandate that each phase last at least Y number of years (barring any unexpected major events), and then the leap to the next phase would only occur if evidence shows that counterfeiters or drug thieves are able to work around the protections in the current level.  Now that would truly “ensure flexibility” by not tying the hands of the FDA so that they are free to react appropriately in the event of a large-scale and serious counterfeiting event—a worst-case scenario.

Overall I think the PDSA’s RxTEC discussion draft is a good start toward a multi-phased supply chain security system, but it needs some work to address the problems I mentioned above and a few lesser problems not mentioned here.  They have until the end of September, as I understand the Federal Government’s fiscal year calendar, so hopefully they will continue refining it until they have something that will start the industry on its way toward eliminating the small amount of crime that exists in the legitimate U.S. supply chain.

WHAT IF RxTEC ISN’T ADOPTED?

Even before the PDSA made their RxTEC draft bill public I was trying to assess the odds that some kind of track & trace or ePedigree bill would make it through Congress this year.  On the one hand, with the Prescription Drug User Fee Act (PDUFA) bill needing to pass by the end of the Federal fiscal year there is a “vehicle” for such an amendment, but on the other, it is an election year and partisanship seems to infect almost every debate.  (See this interesting article in Pharmaceutical Commerce online:  “House subcommittee airs out serialization issues during PDUFA discussions”.)

Even though it seems like everyone is in favor of eliminating the patchwork of State pedigree laws with a single federal regulation—even the States seem to be in favor of that—would the Congress be willing to swallow a bill that increases the enforcement responsibilities of the Federal government and could therefore be considered an expansion of government at a time when politicians seem hell-bent on shrinking the Federal government and returning regulatory responsibilities to the States?  I don’t think this issue fits very well into that mold, but I am frequently amazed how the debates on other issues have made a turn down that path.

So I wonder what would happen if no drug traceability regulation passes this year?  In fact, the FDA is already authorized to develop standards for a nationwide track & trace and authentication system (ePedigree?) as part of the Food and Drug Administration Amendments Act (FDAAA) of 2007.

The FDA has already asked for generalized public input for SNI, Authentication and Track & Trace.  That occurred way back in early 2008.  Less than a year after that the FDA published draft guidance only for the SNI and asked for public comments.  After collecting comments from interested parties the FDA modified the SNI guidance and then published the “non-binding recommendations” for SNI in the form of final guidance in March 2010, (see my essay, “FDA Aligns with GS1 SGTIN For SNDC”).

With that history as our guide, and noting that the FDA is obligated to do so by the FDAAA, I think the next thing we will see will be a draft guidance for non-binding recommendations for a full track & trace, authentication and/or ePedigree system published for comment by interested parties.  It has been over a year since the FDA held a public workshop to collect input into the system attributes for the tracking and tracing of prescription drugs.  In recent presentations the FDA has indicated that it is working on that guidance.  After collecting comments the FDA will modify their draft guidance and then publish a final guidance document.  Like SNI, it will contain non-binding recommendations.

You might think that non-binding recommendations would just sit there and not have any effect on the operation of the supply chain, but look at what is happening right now with the non-binding SNI guidance.  Because California requires the application of “a unique identifier” to each drug package, and because the FDA non-binding SNI is a valid definition of “a unique identifier”, companies are most likely going to adopt it for compliance in California (see my recent essay “The Surprise Consequence of the California Pedigree Law”).

If there are any new State drug pedigree regulations drawn up at any time in the future they would be foolish to designate anything other than the FDA non-binding SNI for their unique identifier.  What the FDA has done is to define a non-binding “standard” for a unique identifier for drugs that will be applied nationwide, all without needing to make it a federal mandate.

It is possible, even likely, that if Congress doesn’t enact new drug traceability legislation, the same thing will happen with their future non-binding track & trace and authentication (ePedigree?) guidance.  Wouldn’t you think that with a Federal “standard” defined, states like California (especially) and Florida (perhaps) might decide to abandon their “special” approaches to supply chain security and simply mandate that Federal standard?  Wouldn’t you expect that any new State ePedigree regulations would simply do that from the start?  In fact, wouldn’t you expect that the existence of a non-binding Federal standard might actually make it much easier for States that don’t currently have a pedigree law to enact their own ePedigree legislation considering the fact that they no longer have to go to the trouble to figure out and document the details of how it would work—they could simply mandate the Federal standard?

In fact, most states with existing drug pedigree regulations took the text that was offered by the National Association of Boards of Pharmacy (NABP) for their laws.  The NABP “model rules” were developed back in 2003 to help States adopt a standardize set of drug pedigree rules.  But with a Federal “standard” offered by the FDA, it is possible that it would replace the NABP model rules as the reference source for new State laws.  Over time the future FDA non-binding drug track & trace and authentication guidance may become the de-facto nationwide pedigree solution that solves the current “patchwork” problem.

It would take a long time for that to occur, but without the passing of new legislation this summer, that could be our future.  What do you think the odds are that RxTEC will be passed by the Congress and signed by President Obama this year?  If it doesn’t get enacted what do you think will happen?  Leave a comment below.

Dirk.

Counterfeit Avastin

The internet lit up last week when the U.S. Food and Drug Administration (FDA) posted an announcement that they are aware of counterfeit Avastin in the U.S. pharmaceutical supply chain (see “Counterfeit Version of Avastin in U.S. Distribution” on the FDA website and Genentech’s announcement).

I found out about it when I received notice of Dr. Adam Fein’s (PhD) excellent blog posting “Greedy Physicians Invite Fake Avastin Into the Supply Chain” on his DrugChannels.net blog, but multiple national news agencies picked the story up and many articles were written about it.  Most simply reflected the contents in the FDA’s announcement.

But at least one news source seemed to do some additional investigating.  Bill Berkrot and John Acher of Reuters published the excellent article “Fake Avastin’s path to U.S. traced to Egypt” on Thursday.  In the article they provide a little more background on the path the drugs allegedly took before apparently arriving on the shelves of U.S. physicians and potentially in the bodies of unsuspecting U.S. patients.

And Pharmaceutical Commerce Online reports that Avastin isn’t the only incident of recent counterfeit injectable cancer drugs making it into the U.S. market that the FDA is currently investigating.

HOW COUNTERFEIT AVASTIN MADE IT INTO THE LEGITIMATE U.S. SUPPLY CHAIN

Now keep in mind, this is only investigative journalism so far, and while the information source listed in the Reuters article is the Danish Medicines Agency, criminal investigators may already know more than this and in the end, some or all of the contents of the Reuters article may eventually be found to be untrue.  Whether ultimately true or not, here is a drawing that I have constructed to reflect the path that they sketch out.  Dashed lines indicate probable sales transactions

Click on the image to enlarge.

As far as we know so far all of these distributors were licensed by some local regulatory agency to buy and sell legitimate prescription drugs somewhere.  At least we don’t know otherwise.  According to Genentech’s website, the U.S. Distributor that allegedly sold the counterfeit Avastin to 19 medical practices was not authorized by Genentech to sell legitimate Avastin to anyone anywhere.  The question is, were they licensed to sell prescription drugs in the locations that the FDA says they did (mostly California but also Texas and Illinois).  Local boards of pharmacy will have to investigate that for any potential violations.

PACKAGING PROBLEMS

It appears that the U.S. distributor that allegedly imported the counterfeit Avastin from the U.K. distributor and who then allegedly sold it to the 19 medical practices may have done so illegally not only because the product was allegedly counterfeit, but also because the product was not labeled for distribution in the U.S.  Here are the pictures of the counterfeit Avastin packaging from the FDA website.

Counterfeit Avastin

Counterfeit Avastin

The linear barcode on the package contains a GS1 GTIN-13 that is rarely seen in the U.S. on drugs, though it is typical almost everywhere else (especially in Europe).  According to the GS1 GEPIR service, the GTIN-13 on the counterfeit packaging uses the GS1 Company Prefix (GCP) that is registered with GS1 Switzerland to F. Hoffmann-La Roche AG of Switzerland.  Roche is the parent company of Genentech.  Of course, anyone can generate a barcode that uses someone else’s GCP so that doesn’t really mean anything except that the counterfeiters went to the trouble to make it look legitimate by that number.

The full GTIN-13 appears to be meaningless.  A Google search of the full GTIN returns nothing.  However, the GCP reported by GEPIR is “764012801” which is not composed of an FDA Labeler Code as it must be to be legally distributed in the United States (see my essays “Anatomy of the National Drug Code”, “Anatomy of a GTIN”, and “Depicting an NDC within a GTIN”).  There is no U.S. FDA National Drug Code (NDC) on the package or the vial in either human or machine readable forms.  Any good packaging expert would be able to find multiple other reasons this packaging doesn’t comply with U.S FDA regulations.

IS THIS JUST THE TIP OF THE ICEBERG?

When you trace backward to find the source of any drug in a lengthy supply chain like this it is an easy trap to assume that you have documented where all of the drugs went.  But more than likely you have only found how just one subset of the drugs made it to this particular endpoint.  The role of a distribution company is to distribute product.  If the Danish Medicines Agency and the FDA are correct, then these drugs that have been discovered in the U.S. supply chain went through at least four distribution companies and maybe five (if you include one in Egypt).  What are the odds that each distributor sold their entire inventory of this Avastin to the next distributor?  Laughably slim in my opinion.

Here is how I depict what we don’t know.  Dashed lines indicate probable and potential sales transactions.

Click on image to enlarge

If only a few of these unknown but potential transactions actually took place the problem could be much bigger than we know right now.  Hopefully there are intensive investigations going on right now on both sides of the Atlantic.  Unfortunately there is no single criminal investigating agency with jurisdiction over all of the places through which these counterfeit drugs allegedly passed.  That makes investigations complicated and time consuming.  If you were a criminal, wouldn’t you just love that about this kind of international crime?

HOW WOULD VARIOUS SUPPLY CHAIN SECURITY APPROACHES HAVE DEALT WITH THIS EPISODE?

There are discussions and debates going on all over the world about exactly what is the right way to counter the growth in attacks on the legitimate pharmaceutical supply chain.  I have selected three approaches that have been discussed in Europe and the United States in recent years.  Each of the approaches to supply chain security outlined below requires the application of a globally unique identifier to each drug package by the original manufacturer which is generally considered the first step by most people (see my essay “Anatomy of an FDA SNI“).

Authentication at the Point of Dispense (POD)
The European Federation of Pharmaceutical Industries and Associations (EFPIA) has heavily promoted the concept of Authentication at the Point of Dispense (POD) for years now.  This approach is not really an attempt at securing the supply chain itself but instead focuses all protection of patients on medical professionals such as pharmacists, doctors and nurses.  These healthcare professionals would need to use a barcode reader and associated internet-connected databases to verify the serialized barcode on each package of drugs at the point of dispensing it to a patient.  Thus, if a counterfeit drug made it through the supply chain, it would not be allowed to harm patients because these healthcare professionals would detect it at the last possible moment.

Applied to this specific case the 19 medical practices who are listed in the FDA notice as allegedly having improperly purchased counterfeit and illegally labeled products would have been responsible for scanning the serialized barcode on the counterfeit product just prior to dispensing it to their patients.  How likely is that to have happened in this scenario?  Hard to say, but considering that these 19 practices had a duty to know that they were allegedly buying from an unauthorized source, and that the packages they received were improperly labeled, but yet they apparently failed to notify any regulatory agency when they received them, I wonder if they would have bothered to perform the authentication step.  If they had (and assuming that this product had the necessary serialized barcode on them that would be necessary under a POD system, which they don’t today) then we would hope that the patients would not have been injected with the counterfeit drugs.

POD authentication does not offer any mandatory protections of the supply chain itself.  That is, criminals are free to spew counterfeit and stolen product throughout the supply chain, wherever they can find a place that will allow them to introduce illegitimate product into the legitimate supply chain.  So nothing would have prevented or slowed any of the four or five distributions, or the potentially many other unknown distributions of this counterfeit Avastin.  And by the time the drug is found to be counterfeit the criminal can be long-gone, working somewhere else on their next counterfeit drug.  By then their trail has gone cold.

To me, POD authentication is a lovely invitation to criminals to setup shop and go for it.  Full steam ahead!  Make a killing monetarily but you don’t have to worry about killing patients because POD authentication will ensure that the fake chemicals will eventually be blocked from actually being consumed at the other end of the supply chain.  The game is setup to protect the patient…and coincidentally, the criminal.

Patient Authentication
Like POD Authentication, Patient Authentication doesn’t attempt to protect the supply chain itself but relies on the patient to authenticate each drug prior to injection or ingestion.  It provides an additional benefit over POD Authentication by eliminating the need to trust the healthcare professionals to properly source their medicines and to authenticate them on your behalf.  The patient is allowed to take drug authentication matters into their own hands.

In the current Avastin situation the 19 medical practices would have provided each of their Avastin patients with the packaging prior to injecting them with it so that those patients could use their cell phones to scan the serialized barcode (or type in a unique code via SMS text messaging) and receive a good/bad message directly from Genentech, the manufacturer.

This approach assumes that the patient has a cell phone with a camera and data service (or SMS feature), knows how to use the authentication service (think of your grandparents doing this…most drugs are consumed in the U.S. by those over 60), and the healthcare professional is willing and able to wait around while the patient interacts with the authentication service in a clinical or emergency room situation.  If I were a counterfeiter I would simply counterfeit drugs that are typically administered when patients are unconscious or in fast-paced emergency situations.  Who’s going to take the time to authenticate in those situations?

Patient Authentication fails for all of the same reasons, and more, that causes POD Authentication to fail.  The biggest failure of both is that they fail to do anything to protect the supply chain and therefore encourage counterfeiters and cargo thieves to do their worst.  (See my essays “Illegitimate Drugs In The U.S. Supply Chain: Needle In A Haystack” and “How to Stop Pharmaceutical Cargo Theft“.)

ePedigree
ePedigree is a supply chain protection technology that is invoked at each sales transaction of a drug within the supply chain.  It requires each seller of a drug to provide the buyer with access to a standardized and authenticated (signed) history of all prior transactions starting with the original manufacturer of the drug component (irrespective of any repackaging that may have occurred along the way).  Each buyer in the supply chain is expected to analyze the ePedigree to confirm that the prior history is valid (through validation of each digital signature) and consistent.  All validations are automated and, depending on the model, may be performed centrally or distributed.  If any ePedigree is found to be invalid the buyer can refuse to take possession of the drugs and may return them to the seller, and, depending on the problem, may notify the regulatory agency (see my essay “Viability of Global Track & Trace Models”).

The California Pedigree Law is an example of an ePedigree system (see “The California Pedigree Law”, and “California Pedigree Law: Historic Change to Commerce”).

In this way illegitimate drugs of almost any kind can be blocked from moving into and through the legitimate supply chain.  Applied to this Avastin case, the very first distribution would have been blocked because the counterfeiter would not be able to provide an ePedigree that matched the product and which contained a digital signature from Genentech.  Even if the first distribution would have gone through because the buyer failed to check the ePedigree, the second buyer would have the opportunity to validate it, and so on through the four or five distributors that allegedly owned the Avastin before it reached the 19 medical centers.  Every supply chain sale is an opportunity to detect and stop the counterfeit.

Even if we assume that only the United States required an ePedigree back to the manufacturer, the U.S. Distributor in this case would not have been able to sell the counterfeit product to the 19 medical centers, or anyone else in the U.S., because they would not have received a valid ePedigree from the U.K. Distributor.  In this way, ePedigree keeps the entire supply chain clear of illegitimate drugs and blocks criminals at every point of introduction and sale.

The one thing that ePedigree cannot protect you from is a criminal healthcare professional who might choose to buy illegitimate drugs directly from the trunk of a criminal’s car or truck.  Since those drugs have not passed through the legitimate supply chain they cannot be detected.  In my view this can be addressed by stronger penalties for these kind of crimes so that healthcare professionals decide it’s not worth the risk to their careers.  That’s already in the works in Congress right now (see my essay “STEP #1: Raise Penalties For Drug Crimes To Reflect The Widespread Harm They Can Inflict”).

As a system-wide supply chain solution ePedigree costs more than POD or Patient Authentication.  In particular, distributors need to spend a lot more to deploy and operate an ePedigree solution.  POD and Patient Authentication systems only involve the patient, pharmacy or hospital/clinic and the manufacturers.  Distributors may choose to participate voluntarily if they want to invest the resources.  As in many things, you get what you pay for.

Why didn’t I include “Track & Trace” as a separate approach to securing the supply chain?  Because the “Trace” part of “Track and Trace” performs the same role as ePedigree and the “Track” part doesn’t add anything extra to supply chain integrity.  See my essay “Terminology: Track and Trace, and Pedigree“.

Which approach to blocking counterfeits like this Avastin case do you think is appropriate for our future?  How much should we expect to spend to “solve” this problem?  Who should pay for it?  Should there be a single, global approach selected or different national approaches that are targeted to the specific problems that exist today in each locale?  Leave a comment below.

Dirk.

Linear barcodes have served us well for almost half a century, but NOW is the time to move on to something else in the global pharmaceutical supply chain.  I think most people already agree with that but I’m not sure everyone fully appreciates exactly why that is.  It’s important to fully understand the reason why so that your resolution to move away from linear barcodes is strong and you won’t drag your feet or look back.  So let me show you.

                      SERIALIZATION
THE DAWN OF ^ CIVILIZATION

No matter what you might think is going to happen to ePedigree or track & trace regulations going forward, more and more governments around the world are concluding that legitimate pharmaceuticals should come with unique identifiers—serial numbers—attached to them by the manufacturers and repackagers.

Serialization is upon us and I believe that in 10 years the ongoing benefits from it around the globe will significantly exceed the ongoing costs.  Whether you agree to the benefits or not you certainly must accede to the fact that serialization in pharma supply chains is being mandated by more and more governments around the world, and that trend is not likely to reverse but will likely increase.  Serialization mandates are currently in place for 2015-2016 in the state of California and they are under consideration by the two largest pharmaceutical markets in the world:  The E.U. and the U.S.

Serialization is upon us and there is no turning back.  While this is the foundation for why the industry must move away from linear barcodes, it is not the complete reason.

ADDING SERIAL NUMBERS TO PHARMACEUTICALS

Serialization mandates in countries around the world vary quite a bit but the more recent the regulation, the more likely they are to specify the use of GS1 standards, either as part of the mandate or as an example of one way to comply.  GS1 linear barcodes are the most common type of product identifier barcode in use today in the larger markets so when you need to add a serial number to a drug, the addition of a GS1 serial number makes a lot of sense.

In a recent essay, “Depicting An NDC Within A GTIN”, I showed how to depict a U.S. Food and Drug Administration (FDA) National Drug Code (NDC) with an GS1 Global Trade Item Number (GTIN) for both over-the-counter (OTC) drugs and prescription drugs.  Then, in my essay “Anatomy of an FDA SNI” I explained how to use GS1 standards to produce an FDA-compliant serialized NDC, or sNDC.  An sNDC is what is necessary if you want to (voluntarily today) add a serial number to any drug that has an NDC assigned to it for the U.S. market according to the FDA’s Standardized Numeric Identifier (SNI) document from 2010 (see also my essay “FDA Aligns with GS1 SGTIN For SNDC“).  At the end of my “Anatomy of an FDA SNI” essay I used the FDA’s own example (from their SNI Guidance document) to create the GS1 string of elements that would be encoded into a barcode and placed onto the drug package:

01003555556667762111111111111111111111

What I didn’t say in that essay is that you can’t encode this or any other sNDC in the GS1 Universal Product Code-A (UPC-A) barcode symbology that is used today for depicting NDC’s in linear barcodes on many of the pharmaceuticals in the U.S. supply chain.  The UPC-A symbology itself does not support the addition of the serial number.  For that you have to switch to another GS1 linear symbology known as GS1-128 (formerly known as UCC-128 and EAN-128).

Without the serial number, the linear UPC-A barcode for the NDC in the FDA’s example would look like this (all barcode images in this essay are courtesy of Terry Burton’s website):

That’s what the NDC barcode would look like today depicted as a GS1 GTIN-12 without the serial number.  Here is what the full NDC and the serial number from the FDA’s example sNDC would look like depicted as a GTIN-14 plus serial number and rendered in the GS1-128 symbology:

Look at these two examples and you will see why serialization triggers the need to abandon linear barcodes.  The linear barcodes that result after adding a serial number to NDCs are too long to fit onto most drug labels in a way that allows them to be scanned properly.  Yes, this example uses U.S.-specific data and requirements but the same principles will apply to almost all countries and similar results will occur.  Yes, the serial number in the FDA’s example is an extremely long one that probably exceeds the needs of 99% of companies, but the technology must accommodate the extremes or it is not usable.

And that’s not even the most extreme serial number I can think of.  Serial number “YESTHISISAVALIDSRNUM” (yes, this is a valid serial number) is the most extreme serial number I can think of, and this is what it would look like as an sNDC in the GS1-128 symbology:

In fact, I had to reduce the image considerably to get it to fit into this webpage. Click on the image to see it full scale.

That’s even less workable.

SO WE NEED TO MOVE TO 2D BARCODES, RIGHT?

2-Dimensional barcode symbologies, like GS1’s DataMatrix, will solve this problem, yes.  For example, here is what the previous two examples would look like encoded in GS1 DataMatrix:

(01)00355555666776
(21)11111111111111111111

(01)00355555666776
(21)YESTHISISAVALIDSERNM

Both of these symbols take up less space than the original UPC-A barcode that only contains the NDC.  Even if we now add a lot/batch (AI=”10) and an expiration date (AI=”17) as I recommended in my essay “SNI’s Are Not Enough In a Plateau-Based Supply Chain Security Approach”, and we do so using the maximum lengths possible, these two become:

 (01)00355555666776
(21)11111111111111111111
(17)160701
(10)22222222222222222222

(01)00355555666776
(21)YESTHISISAVALIDSRNUM
(17)160701
(10)YESTHISISAVALIDLOTNM

Whoa!  What happened with the “extreme” example to make it blow up so big?  There are two things that just happened.  First, the DataMatix symbology is highly compressed and it automatically adjusts to accommodate the type and size of the data being encoded.  Notice that the length of the lot number and the serial number in the two images above are the same, but the type of the data in the lot and serial numbers are not the same.  When only digits are used the symbology can compress the image into a smaller space than it can when alphanumerics are used.  In both examples I am using the maximum number of characters allowed, but in the extreme example I am using all alphas in both the serial number and in the lot number.  That is the worst-case scenario and, as you can see, it takes up more space.

Second, the GS1 DataMatrix symbology will split into multiple segments (four in this case) once you cross a technical boundary related to the number of bits being encoded.  Alphanumeric characters require more bits to encode them than numeric characters and in this example we crossed that boundary so the image generator split it into four segments.  This helps readers decode larger symbols without significantly lowering reliability.

Considering the fact that it required me to come up with a pretty unrealistic extreme example of both serial number and lot number before the symbols made the leap to four segments I think it is unlikely that most drugs will require more than one segment.  That’s because most drugs require many fewer than 20 characters for their lot/batch and serial numbers and most companies will probably stick with numeric-only characters in their serial numbers.

WHAT ABOUT RFID?

The pharma industry could move to Radio Frequency Identification (RFID) instead of 2D barcodes where regulations allow, but I believe that is unlikely except where the overseeing regulatory body actually requires it for all drugs in that jurisdiction.  The explanation I documented for that in my essay “RFID is DEAD…at Unit-Level in Pharma” still applies.  On the other hand, RFID would also solve the space problem that we have seen results with linear barcodes and the addition of serialization.  In fact, most RFID tags would likely be placed under the product label so they would not take up any label real estate at all, but I don’t think manufacturers will view that savings as enough to offset the cost of the tags themselves.

THE TIME IS NOW

If you are a global pharma manufacturer or repackager and you haven’t yet figured out a plan for moving away from linear barcodes on your product labels, now is the time to start.  Whether you choose 2D barcodes or RFID, the existence of serialization mandates around the world is the reason you need to take action and the time is now.

If you are a distributor, pharmacy or dispenser of pharmaceuticals in parts of the world where serialization has arrived or is coming, you need to develop a plan for reading the product codes and serial numbers using technologies that drug manufacturers and repackagers will move to.  Now is the time to find out how many different technologies you will have to deal with.  Now is the time to influence those manufacturers who are considering technologies that you don’t want and steer them toward those you do want.

Now is the time.

NOW IS THE TIME…EXCEPT FOR ONE THING!

Except, the FDA currently requires that drugs sold into the U.S. market be identified with their NDC specifically in a linear barcode.  That means that in the U.S. today, you cannot move away from linear barcodes on your drug product, even when you need to add serial numbers to them for compliance with the California pedigree law in 2015-2017.  As I show above, it doesn’t make sense to add serial numbers in linear barcodes so you are left with the probable decision to put the NDC and serial numbers in a 2D barcode or RFID tag in addition to the existing linear barcode that contains the NDC by itself.  That’s pretty space inefficient.

The FDA is aware of this unfortunate situation as indicated by their recent request for comment on eliminating the requirement for the use of linear barcodes containing the NDC on drugs.  Click here to read the responses they have collected so far.  You have until February 23, 2012 to submit your own comments to the FDA through www.regulations.gov, docket number FDA-2011-N-0719.

Pay close attention to what the FDA does with this issue.  More than likely it will impact everyone in the U.S. pharmaceutical supply chain.

Dirk.

Thank you to George Wright IV of PIPS for catching an embarrassing error in my construction of the GTIN-14′s encoded into the sample barcodes.  I have now corrected and updated them.

Last Thursday a bipartisan group of U.S. Senators and Representatives jointly introduced a bicameral bill that would significantly increase the criminal penalties for drug counterfeiting to as much as 20 years in prison, as reported by Phil Taylor in SecuringPharma (see the article for the details).  The house bill is called H. R. 3468, The Counterfeit Drug Penalty Enhancement Act.  The group of legislators include U.S. Senators Patrick Leahy (D-VT), Chuck Grassley (R-IA), Michael Bennet (D-CO), and Richard Blumenthal (D-CT) and U.S. Representatives Patrick Meehan (R-PA) and Linda Sánchez (D-CA).  Not surprisingly the responses from the Pharmaceutical Research and Manufacturers of America (PhRMA) and Pfizer were swift and supportive.

Raising the penalties for counterfeiting drugs to the point where they adequately reflect the widespread harm they can cause the public is a very good thing.  It should have the effect of making people think twice about selling counterfeit drugs to Americans through the internet or attempting to introduce them into the legitimate supply chain (brick-and-mortar and legitimate internet pharmacies).  It may even cause more people in the legitimate supply chain to think twice about buying drugs that have prices that seem too good to be true from sources that they aren’t quite sure about, so that they don’t inadvertently get caught up in a scheme to introduce counterfeits into the supply chain and risk prison or a large fine.  Maybe.

WHAT ABOUT DRUG FACILITY/CARGO THEFT AND PHARMACY ROBBERY?

Yes, significantly higher penalties for counterfeiting drugs are a good thing, but can’t we make the same argument to also justify higher penalties for drug theft from distribution centers and trucks, and robbery of pharmacies?  These crimes are also on the rise and they also result in a high potential for widespread harm to the public when these drugs are reintroduced into the legitimate supply chain.  These crimes can result in something that is just as bad as the harm that can come from counterfeiting.

Take, for instance, the recent successful cargo theft of a truck carrying 14 pallets-worth of Oxycodone tablets from Actavis last month as reported by SecuringPharma.  The heist also netted the thieves 16 pallets of other drugs too, but I want to focus on the Oxycodone.  Nobody is going to find these bottles showing back up in the legitimate supply chain.  Oxycodone is the generic name for the opiate-based prescription pain medication that most people know better by its brand name “OxyContin” used by the brand owner.

Oxycodone abuse in the U.S. has been rising steadily for at least the last dozen years.  It results in a particularly insidious form of addiction.  One that quickly becomes a major social problem in the small and large communities where it takes hold.  Here is a quote that says it all from U.S. Attorney Joseph Famularo during a February 2001 news conference as quoted in the March 13, 2011 article “OxyContin abuse spreads from Appalachia across U.S.” by Bill Estep, Dori Hjalmarson and Halimah Abdullah of McClatchy Newspapers:

“You could leave a bag of cocaine on the street and no one would touch it, but leave one OxyContin in the back of an armored car and they’ll blow it up to get at it.”

Along with the rise in Oxycodone abuse has been a rise in serious crimes committed by addicts desperate for whatever it takes to get more Oxy.  And now we have 14 pallets-worth more of it in the hands of those who will make sure that the number of those addicts increases.  If our law enforcement organizations are unable to recover that shipment then we are all going to see more of the kind of social destruction that results from the crazy crimes these desperate Oxy addicts commit.  The U.S. Drug Enforcement Administration (DEA) has been trying to control diversion of Oxycodone, but this single cargo theft represents a huge quantity that goes well beyond the “fraudulent prescriptions, doctor shopping, over-prescribing, and pharmacy theft” diversion that the DEA is focusing on.

HOW MUCH CAN A THIEF MAKE FROM A SINGLE CARGO THEFT?  MORE THAN YOU THINK.

Let’s try to figure out the approximate street value of just the Oxycodone in this cargo theft.  According to the SecuringPharma article, the thieves got away with about 70,000 units.  That’s about 5,000 bottles per pallet which is within reason for a 100 count bottle of small tablets.  I’ll assume that this shipment was evenly divided between the 30mg dose and the 15 mg dose.  According to the National Prescription Drug Threat Assessment 2009 conducted by the U.S. Department of Justice National Drug Intelligence Center, the average street value per milligram of Oxycodone in 2008 in the U.S. was $1.15.  With this data we can calculate that the estimated 2008 street value of just the Oxycodone in this cargo theft is

( ( (15mg + 30mg)/2 )*$1.15  * 100tabs per bottle ) * 70,000 bottles = $181,125,000.

$181,125,000 !

If this were the market value of a typical drug cargo theft where the drugs only have value if they are sold back into the legitimate supply chain the thieves would probably expect to receive much less than this when they sell the drugs.  But in this case, because the drugs have a higher street value than legitimate supply chain value, they can probably expect to sell this Oxycodone for even more than this value because it is now 2011 and I assume prices on the street only go up.

The estimated street value of this stolen drug is only one aspect of this particular cargo theft.  The cost to our communities of 70,000 more doses of Oxycodone being sold to addicts across the country in terms of family breakdown, job loss, and elevated petty and serious crime, makes this particular cargo theft something that we are going to be dealing with for a long time.

Those who introduced the bipartisan bill into Congress last week recognized the critical difference between the criminal counterfeiting of watches, purses and apparel, and of the much more serious crime of counterfeiting drugs because of the widespread harm they can cause.  That is the proper justification for significantly higher criminal penalties for drug counterfeiters.  If this bill is enacted, the penalties for drug counterfeiting will reflect this greater ability to harm.  But the penalty for pharmaceutical cargo theft should likewise reflect the widespread harm it can inflict on our citizens and our communities over and above non-drug theft.  The sponsors should make these newly enhanced penalties apply to these crimes as well while the bill is still in committee.  Counterfeit drugs are a problem, but so are drug cargo theft and the prescription drug abuse that can result.

A QUESTION FOR YOU, DEAR READER

So, dear reader, I have a question for you that has been banging around in my head ever since I read about the Oxycodone cargo theft I analyzed above.  As U.S. taxpayers–as the people who will foot the bill for the devastation to our people and our communities that will come as a direct result of this $181 Million crime–what kind of security practices should we expect the owner of a shipment that has a street value of $181 Million to use on that shipment?  What kind of security practices should we demand?  Please leave your answer in a comment below.

Dirk.

West-African countries have been under attack by drug counterfeiting criminals for decades with little resistance until the last one.  The result, in 2002 Mohammed Yaro Budah, then president of the Pharmaceutical Society of Nigeria, estimated that 70% of the drugs in Nigeria were fake or substandard.  That’s an incredible figure, but starting around that time the Nigerian National Agency for Food and Drug Administration and Control (NAFDAC) under the direction of Professor Dora Akunyili began fighting back.

Initially they focused on inspecting drug imports at the Nigerian ports and airports and they were able to bring the percentage of fake or substandard drugs to come down considerably.  More recently they have begun employing a number of Raman Spectroscopy-based devices called TruScan (recently acquired by Thermo Scientific) to inspect drugs and anti-viral medicines being sold in pharmacies during “unscheduled” visits.

Even more recently, a number of pharma manufacturers have begun to add low cost scratch-off stickers to the drugs sold in Nigeria that cover a random number that can be scratched off and checked for authenticity by patients and healthcare professionals using SMS text message-based technology from Sproxil.  The service was launched in 2010 on a single product but that number is growing quickly as a number of large U.S.-based drug companies add the scratch-off stickers to their products.  The service is sponsored by NAFDAC.

WOULD THESE TECHNOLOGIES WORK IN THE U.S.?

That is, would these technologies help to reduce the number of illegitimate drugs in the U.S. supply chain? I believe that the answer is flatly “NO”.  The reason Raman Spectroscopy and Sproxil’s system work so well in Nigeria and are so appropriate there is because the percentage of illegitimate drugs in that country is so huge.

In comparison, the World Health Organization (WHO) has “estimated” that the percentage of counterfeit drugs in “industrialized countries with effective regulatory systems and market control”—countries like the U.S.—is “less than 1%”.  In reality, this “estimate” is not based on any actual measurement but appears to be just a guess.  We know that tiny quantities of illegitimate drugs are sometimes found in the U.S. supply chain today and we know that, even in the early 2000’s when criminals found a window of opportunity that no longer exists, the percentage has never approached 1% by any measure, so it is technically true that “less than 1%” of our drugs are illegitimate/counterfeit.

And we know, based on seizures in postal facilities alone, that the number of counterfeit drugs arriving on our shores through illegitimate channels is growing fast.  That was the real story seemingly hidden in plain sight in the recent CBS “60 Minutes” video essay “The fight against counterfeit drugs”.  The flood of counterfeit drugs on our shores that was the topic of that segment is coming in through ILLegitimate channels (mainly through unlicensed criminal pharmacies on the internet), not the legitimate supply chain that supplies our pharmacies (including properly licensed and fully legal internet pharmacies).

Despite unfortunate occurrences where illegitimate drugs made it into the legitimate supply chain as I analyzed in “Lessons from “Drug Theft Goes Big”, the actual percentage of illegitimate drugs in the legitimate U.S. supply chain is so small that it is actually immeasurable.  In my opinion, to say that the value is “less than 1%” actually inflates the problem beyond reality by at least five orders of magnitude.

The number of illegitimate drugs in the U.S. legitimate supply chain remains “less than .00001%”, and it is not growing (other than small fluctuations that are due entirely to the tiny numbers involved). That’s my “guesstimate” and it is likely based on more thought and observation of the U.S. supply chain than the WHO put into their guess for “industrialized countries”.  (Notice that my guesstimate of “less than .00001%” fits well within the WHO’s estimate of “less than 1%” so it doesn’t actually counter their estimate!)

If my guesstimate is accurate, that means that Nigeria conservatively has more than 1,000,000 times more counterfeit drugs in their pharmacies than the U.S. has in theirs.  Finding a package of a counterfeit drug is easy in Nigeria, perhaps one out of every 5 to 10 packages.  With a properly configured Raman Spectoscope, or a Sproxil scratch-off authentication code, these illegitimate packages can be found and removed from the market before patients are harmed.  But if applied in the U.S., using my guesstimate and assuming an even distribution, you would have to check well more than 10 million packages before you found one that was illegitimate.

Because the illegitimate drugs that are found in the U.S. supply chain are found in pockets and are not evenly distributed, you could easily check billions of packages and not find a single illegitimate drug if you don’t check in the “right” places (or is it the “wrong” places).  Clearly, checking all those drugs manually by either aiming a Raman Spectrograph at it, or scratching off a patch and texting a code to an authentication service is totally impractical for addressing the problem in the U.S. supply chain.

THE SUCCESSFUL ANTI-COUNTERFEITING TECHNOLOGY IS THE ONE THAT FITS THE PROBLEM

Raman Spectroscopy and Sproxil work well in Nigeria because you counterfeit drugs are so easy to find there.  These technologies fit the problem.  We should all hope that the day arrives soon when Nigeria finds that their counterfeit drug problem has diminished so far as the result of the application of these technologies that they no longer fit the problem.  When that day arrives, even Nigeria will need another technology.

The E.U. is a collection of “industrialized countries” where the counterfeit drug problem is believed by the WHO to be “less than 1%”.  Again, the problem in the E.U. is really too small to accurately measure and the bulk of the problem never enters legitimate channels, but from press reports (one example), it appears that the occurrence of illegitimate drugs in the E.U. supply chain falls somewhere between my guesstimate of “less than .00001%” for the U.S. and the WHO’s estimate of “less than 1%” and is probably closer to whatever the real value is for the U.S. than it is to the 1% value.

The problem is different in the E.U. than it is in the U.S. however because parallel trade in pharmaceuticals, or what I refer to as  “economically motivated diversion”, is somewhat legal in the E.U.  That is, it is apparently legal for a wholesaler to import drugs into a member country that sets the purchase price at a lower value, repackage these drugs for sale in a different member country that sets the sales price at a higher value.

As I understand it, the repackaging step is usually necessary due to language and regulatory differences in the packaging between E.U. member countries.  It’s this frequent legitimate need for repackaging that can provide “cover” for criminals to introduce counterfeit drugs into the legitimate E.U. supply chain.  Repackaged drugs are harder to trace than drugs that remain in the original manufacturer’s package.

(For Dr. Adam Fein’s thoughts on the importance of the differences between the U.S. and ex-U.S. supply chains and how that would impact any legalization of drug importation in the U.S., see his recent excellent essay “Importation is back? Really?!?”.)

Now I’m no expert on the E.U. pharma supply chain so I expect to be challenged by parallel traders in the E.U., if they ever pay attention to statements made by U.S.-based and –focused bloggers.  The reason I bring up this apparent difference (and the reason I keep using the word “apparent”) is that the contribution to the introduction of counterfeit drugs into the legitimate drug supply chain in the E.U. has been a hotly debated topic there for some time with lots of people on both sides of the question.

The point is, the supply chain is significantly different in the E.U. than it is in the U.S. and that causes the problem to be different.  I think that difference leads to the need for a different solution. The solution that works in the E.U. will very likely be different from the solution that works in the U.S., just like the solution that works right now for Nigeria would not be appropriate for either the U.S. or the E.U.

IS “POINT OF DISPENSE” (POD) AUTHENTICATION THE SOLUTION FOR THE E.U.?

The European Federation of Pharmaceutical Industry Association (EFPIA), an industry organization, proposes a model that would only detect illegitimate drugs at the point of dispense (POD) in the pharmacy.  In this model, all drugs must be serialized in some standard way and the pharmacist must execute an internet-based check on the authenticity of that serialized ID at the time the drug is being dispensed to the patient.

I’m not a big fan of POD because it doesn’t really help find and stop counterfeiters, but when drugs can legally pass through a complex supply chain that includes one or more repackaging and movement from country to country, perhaps simple POD makes the most sense.  (I first discussed POD Authentication in my essay “What are Pedigree Laws Trying to Accomplish Anyway?”.)

ILLEGITIMATE DRUGS IN THE U.S. LEGITIMATE SUPPLY CHAIN:  NEEDLE IN A HAYSTACK

The real problem with selecting a technology for securing the U.S. supply chain from the introduction of illegitimate product is that the proportion of illegitimate product is so tiny compared with that of the legitimate product.  Mandating almost any technology to detect “the needle” will undoubtedly introduce inefficiencies that will result in increased costs to everyone for “the hay”.

I discussed this problem in my essay “Do We Even Need To Mandate Drug Pedigrees Anymore?”.  Interestingly, since I published that essay we have learned from Katherine Eban about how some stolen drugs made it back into the supply chain.  It appears that it may have allegedly been a combination of method #2 “Legitimate wholesalers who are unable to make the pledge to only buy directly from the manufacturer”, and method #4 “Criminal wholesalers and/or pharmacists/pharmacies”.  And counter to my point in that essay, electronic drug pedigrees would almost certainly have detected the criminal activity before patients were harmed, as I later pointed out in my more recent essay “Reliance on Trust in the U.S. Pharma Supply Chain”.

(Dr. Fein has published many essays on these topics in his Drug Channels blog.  Here is one from 2006 that has some pertinent thoughts:  “Our Demand Side Counterfeit Drug Problem”.)

The real questions now are, what less costly technology exists (less costly than a full ePedigree system) that would have detected that crime before patients consumed the drugs?  POD Authentication is one.  Is that the solution that best fits the problem here?  Is the extra cost of a full ePedigree system worth it to be able to find and prosecute the criminals?  If so, who should pay for it?

Dirk.

If you are a regular reader of RxTrace but you still haven’t read Fortune Magazine’s recent article, “Drug Theft Goes Big” by Katherine Eban, then I suggest that you stop reading this essay right now and spend the next 15 minutes absorbing her article carefully.  And then return here for my analysis.  It’s that good and that important.

Many of you will remember Katherine Eban as the author of the excellent book “Dangerous Doses, A True Story of Cops, Counterfeiters and the Contamination of America’s Drug Supply”.  See my comments on the book here where I point out that a lot has changed since the events that are documented so well in the book.

The new Fortune article is a great update on what drug supply chain criminals have been up to since “Dangerous Doses” was published back in 2005.  The greatest thing about the article is that it contains one answer to the question that is on the minds of so many people in the industry:

HOW COULD ILLEGITIMATE DRUGS END UP IN THE LEGITIMATE SUPPLY CHAIN?

I wondered about this myself in my recent essay “Do We Even Need To Mandate Drug Pedigrees Anymore?”.  But this new article shines a light on one explanation—based on the work of a seasoned investigative reporter—of how this allegedly happened in the instance of some of the Levemir that was stolen back on February 5, 2009.  We can use this explanation to figure out how a modern pedigree model might have worked to detect the stolen drugs in the supply chain before they could cause harm to patients.

Let’s construct a hypothetical sequence of events that matches the sequence that Eban’s article describes in her section titled “From Heist to Pharmacists”.  That way we can dispense with company names and we won’t have to worry about discussing something that is probably still under investigation and will likely result in future criminal charges.

We know that the drug was manufactured and it was stolen in North Carolina while it was en-route from the manufacturer (M) to some destination.  Eban describes how some smaller quantity of drugs that matched the NDC and lot of the drugs that had been stolen were delivered to a licensed wholesaler (W1) in South Carolina five days later.

(As an interesting aside, here is a Google Map that shows a driving route between the town where the real drugs were stolen and the town where the first wholesaler received drugs of the same description as documented by Eban, only 150 miles away.  It’s very interesting, but it’s not really important to our analysis of the hypothetical sequence of events.)

W1 quickly resold these drugs to another licensed wholesaler (W2).  W2 then sold part of its stock to a third licensed wholesaler (W3) in Maryland.  W2 supplied W3 with a “phony pedigree” that inaccurately indicated the drugs had been supplied by a well known national wholesaler.

I use quotes around the phrase “phony pedigree” because that’s what Eban calls it, but that phrase gives the concept of “pedigree” a bad connotation.  One might ask, “What good are drug pedigrees if they can be faked so easily?”.

WHAT GOOD ARE DRUG PEDIGREES IF THEY CAN BE FAKED SO EASILY?

A quick check of the state pedigree regulation map posted by the Healthcare Distribution Management Association (HDMA) shows that neither North Carolina nor South Carolina have any kind of pedigree regulation.  Coincidence?  Maybe, but because neither W1, W2 nor W3 appear to have been Authorized Distributors of Record (ADR’s) for the drug in question, these drug sales should have fallen under the pedigree requirements of the federal Prescription Drug Marketing Act (PDMA).  Even with the court ordered stay in 2006 of part of those requirements, it seems that some kind of pedigree should have been required in each of these sales transactions.

But as Eban discovered in her investigation, only the W2 to W3 transaction apparently included some kind of pedigree.  That transaction occurred between South Carolina (W2) and Maryland (W3).  According to the HDMA’s map, Maryland has a pedigree regulation.  Hmmm.  Interesting.  But it didn’t help because the pedigree was allegedly forged to look legitimate.

Almost certainly, the pedigree that was supplied by W2 would have been a paper pedigree.  A paper pedigree is about as easy to forge as a note from your mother excusing you from gym class, but it is legal in every state that currently requires a pedigree for drug sales of this kind.  The regulatory acceptability of a paper pedigree is little more than an invitation to criminals to make them up.  Most tragic of all, they lend an undeserved impression of legitimacy to this kind of transaction.  W3 apparently complied with Maryland’s pedigree law.  That is, they apparently received a pedigree along with the drugs.  But even so, patients were harmed later.  The pedigree didn’t do its job of protecting patients.

Continuing with the story, W3 sold part of their stock to a chain drug store (CDS) based in Ohio.  Eban doesn’t mention if a pedigree was provided with the sale, but Ohio is another state that has no pedigree regulation.  CDS apparently distributed these drugs to their pharmacies (Ph) in at least four states where they were later found on pharmacy shelves, but not before at least two of their customers had life-threatening adverse reactions.

WHAT DOES THIS HYPOTHETICAL SEQUENCE OF EVENTS TELL US ABOUT PEDIGREE MODELS?

We have to remember that the drugs in the real story were not serialized.  So unless every unit in the entire lot that the manufacturer produced was stolen, it is not possible to say that the drugs that were allegedly found to have caused adverse events were definitely the units that were stolen.  That’s why unit-level serialization is a given in any future pedigree model.  There’s really no question about it.

I’ve already pointed out that paper pedigrees are worthless for protecting patients.  Because they can be forged so easily and the forgeries are so hard to detect, legitimate buyers of illegitimate drugs may accept them and feel confident that the drugs are real.  At least these forged paper pedigrees can be used later to help discover who the bad guys are.  That’s why investigators would rather have a forged pedigree than none at all.  At least they can use the forgery to prosecute the bad guys.  The forgery becomes obvious only after a time-consuming investigation.

But shouldn’t pedigrees help protect patients?  Shouldn’t they help legitimate supply chain members detect when they are being sold illegitimate products at the time of the sale so they can confidently refuse to buy them and notify the authorities right away?  The paper pedigree in our hypothetical story didn’t do that because it couldn’t.  A pedigree model is only as protective as the buyer’s ability to validate pedigrees quickly, efficiently and reliably.  Paper pedigrees with hand written signatures fail all of those tests.

Now let’s assume that every sale from W1 through CDS included the passing of an electronic pedigree that would be capable of being validated quickly, efficiently and reliably.  But that’s still not enough.  Even electronic pedigrees can be forged.  The difference is that forgeries of electronic pedigrees should be very easy to detect—if the pedigree model includes that feature (not all do).

But that capability alone won’t automatically translate into every legitimate company in the supply chain validating every pedigree.  Electronic pedigree validation will still take some amount of CPU time, even if that process is quick, efficient and reliable.  If companies don’t have to check the validity of pedigrees, many probably won’t bother.  In that case, even with a pedigree model that would be capable of easily detecting a forgery, patients could still be harmed if the pedigrees aren’t checked.

Should companies be required to check every electronic pedigree for validity on receipt?  If every recipient had checked an electronic pedigree in our hypothetical sequence, the sequence would have stopped at W1 because they would have easily found that the pedigree they were given was forged.  The thief could not have constructed a pedigree without forging the necessary record that only M could have produced.  All W1 would have needed to do is check the pedigree and the forgery would have failed validation.

Even if W1 had skipped pedigree validation, the next sale to W2 would have provided another opportunity to detect the forged M record.  The sale to W3 provided another opportunity and the sale to CDS another.  With the combination of serialization, an electronic pedigree model with the right features and each recipient validating each pedigree they receive, this hypothetical sequence of sales would have provided at least four opportunities to detect that the product was illegitimate before it was ever given to patients.  The first recipient to actually validate the pedigree would have detected the forgery and the stolen drug would have been stopped right there.

I am fascinated by the results of Eban’s investigation.  Can you see any other lessons from either the real or the hypothetical sequence?

Drawing by Zsuzsanna Kilian

A CHALLENGE TO THE CURRENT CONVENTIONAL WISDOM

Currently well over half of the U.S. states have a drug pedigree law of some kind either on the books, in the process of being enacted or proposed in their legislature.  No two laws are exactly the same.  That fact is quite painful for the national participants in the supply chain and it gets a little worse every time a new law is enacted or a change is made to an existing law.  For this reason, the conventional wisdom among many supply chain participants, industry organizations, solution providers, and even the regulators themselves is that a nationwide pedigree law would be better than 50 different local laws.

Many of these entities are in favor of replacing those state laws with one administered by the U.S. Food and Drug Administration (FDA).  I don’t challenge that.  In this essay, I’m challenging the very need for any U.S. pedigree requirement at all.  Let me explain.

PEDIGREE LAWS ARE AIMED AT FIGHTING A WAR THAT HAS ALREADY BEEN WON BY OTHER MEANS

That’s right.  State pedigree laws are a response to the shocking crimes against the U.S. supply chain that occurred between the late 1990’s and 2005, primarily, though not entirely, in Florida.  Katherine Eban documented these crimes so well in her excellent 2005 book,  Dangerous Doses:  How Counterfeiters Are Contaminating America’s Drug Supply (also available in paperback as Dangerous Doses: A True Story of Cops, Counterfeiters, and the Contamination of America’s Drug Supply) that I highly recommend it to everyone.

Back during that time, it was common practice for legitimate wholesalers to buy small quantities of drugs on the secondary market—that is, these drugs were bought from someone other than the original manufacturer.  The assumption was that these drugs were for sale because the current owner had bought too much legitimate product and would not be able to sell all of it before the product became too close to the expiration date, so they chose to sell it in on the secondary market at a reduced price.  Buyers normally required some form of documentation to prove that the sellers had originally bought these drugs from a legitimate source to reduce the risk that they were buying counterfeit product.  This practice had been going on successfully and very profitably in the industry for many years.

As Eban documents, in the late 1990’s, criminals discovered that they could easily forge the documentation they needed to “prove” legitimacy and so they began selling more and more illegitimate drugs—that is, stolen, counterfeit, up-labeled, diverted and tampered drugs—to these legitimate wholesalers through this secondary market.  Those wholesalers then often merged those drugs with the stock of drugs that had been bought directly from the manufacturers and then these drugs were sold to unsuspecting legitimate customers.  Viola, a small but critically significant percentage of illegitimate drugs made it into the legitimate supply chain.

But the problems that Eban documents so well won’t happen in the U.S. so easily anymore.  A month before Dangerous Doses was published in May 2005, the Office of the Attorney General of New York State initiated an investigation into the secondary market for pharmaceuticals in the U.S. supply chain and that investigation culminated in a settlement with one of the large U.S. drug wholesalers.  I should point out that I don’t have any first-hand information or knowledge about this case or the settlement other than what I have read from public sources.

The agreement, signed in December 2006, required this particular wholesaler to cease all participation in the secondary market for pharmaceuticals, among other things (see the full text of the agreement at “ASSURANCE OF DISCONTINUANCE PURSUANT TO EXECUTIVE LAW §63(15)”).  While the settlement was only with one U.S. wholesaler it apparently scared the other large wholesalers enough that they also voluntarily stopped trading pharmaceuticals on the secondary market in 2005/2006.

This was a pivotal event because it was the secondary market—the “grey” market—where illegitimate drugs were able to make it into the legitimate supply chain that these wholesalers dominate.  By closing off this huge entryway, criminals were locked out.  With that one settlement, the Office of the Attorney General of New York ended the war with criminals that Dangerous Doses exposed with a decisive victory.  As a result, the criminals moved on.  The vast majority of the U.S. pharmaceutical supply chain is now clean at the wholesale level.

WHERE ARE THE CRIMINALS NOW?

Most of the criminal activity has moved out of the legitimate supply chain, mostly onto the internet.  You know, the internet, where criminals can sell drugs directly to the few consumers who are dumb enough to think that someone will sell them legitimate prescription drugs, but do so illegally by not requiring a prescription.  That is, they think that some faceless company would be willing to knowingly break one law, but could then be trusted to provide real pharmaceuticals at below market prices.  In the age of the internet, how do you protect people who are that gullible?

But there is still one place where criminals have been able to retain a toehold in the legitimate supply chain and this can expose U.S. consumers to illegitimate product even if they only fill their prescriptions at legitimate pharmacies—whether brick-and-mortar or legitimate internet.  That is, these consumers are doing everything right.  Somehow, stolen and counterfeit drugs (part of what I classify as, “illegitimate drugs”) are still being found, however rarely, in the inventories of legitimate pharmacies.  It’s a big mystery that Federal and State investigators are apparently currently pursuing.

And where are all of the stolen drugs going?  Cargo theft is on the rise in the U.S. and around the world.  You wouldn’t think that professional criminals like those would normally steal things unless they have a ready market to sell into.  Who is buying these drugs?  Are they all making it back into the legitimate supply chain?  Some have, but how?  That information isn’t being released yet for some reason.  (See Adam Fein’s excellent essay, “How did stolen GSK product end up in pharmacies?” and my earlier essay “How to Stop Pharmaceutical Cargo Theft”.)

If the wholesale segment of the U.S. supply chain is clean, how can this occur?  I don’t know, but I can’t wait for arrests to be announced because, for this situation to exist, there have to be criminals not too far behind it and their methods should be exposed so we can close whatever hole in the supply chain they are exploiting.  But please allow me to speculate on what could be happening.

HOW COULD ILLEGITIMATE DRUGS END UP IN THE LEGITIMATE SUPPLY CHAIN?

If the big wholesalers are only buying their drug supplies directly from the manufacturers, as they have pledged, it should not be possible for stolen or counterfeit products to just appear in their inventories.  A criminal is in business to get paid, so they wouldn’t just sneak it into the inventory of an unsuspecting wholesaler.  Besides, wholesalers have pretty good security in their facilities, so I don’t think it is likely that these drugs are entering the legitimate supply chain through any wholesaler who has made the pledge.

I also don’t think it’s productive to consider that the manufacturers might somehow accept counterfeit or stolen drugs.  After all, they make the drugs, they don’t buy them.  And even when the drugs are made on their behalf by a contract manufacturer, they have solid sampling and testing regimens in place that would detect anything like this long before it reached consumers.

There are only a few possible ways I can think of for this condition to exist:

1.  Legitimate wholesalers ignoring their pledge to only buy direct from the manufacturer

It is possible that wholesalers who have made the pledge to only buy their supplies directly from the manufacturer are sometimes quietly not following that pledge.  If this is happening, they would be buying some of their stock from someone other than the manufacturer and would therefore open up the possibility that they are moving illegitimate product into the legitimate supply chain.  Technically such a wholesaler would not be committing a crime as long as the “alternate source” they buy from holds a valid wholesaler’s license.

In my experience, it’s not hard to find people who believe this is exactly what is happening.  Indeed, the settlement that the one wholesaler signed with the New York Attorney General’s office expired this past January (see paragraph 33 in the settlement), presumably releasing them to return to their old practices if they so choose.

However, I don’t believe this is what is happening.  From my observation the wholesalers who made this pledge have a genuine interest in a secure supply chain and would not revert to the business practices that led to the problems documented in Eban’s book.  Am I biased?  Perhaps.  Time will tell, but for now I am at least willing to list it as a possibility.

BTW, there are a small number of specialty drugs that even these wholesalers cannot buy directly from the manufacturer due to exclusive distributor arrangements.  I’m not including those drugs in this category and you shouldn’t either.  The “pledge” is that these wholesalers would buy drugs directly from the manufacturer when they can.

2.  Legitimate wholesalers who are unable to make the pledge to only buy directly from the manufacturer

Not all wholesalers have made the pledge to only buy directly from the manufacturer, because they can’t.  Regional wholesalers, or wholesalers who service niche markets often sell volumes of some drugs that are too small to meet the minimum purchase requirements of some pharma manufacturers so they are not able to make a pledge like the high-volume, nationwide, full-line wholesalers can.

If these legitimate companies want to serve their pharmacy customers with a wide selection of pharmaceuticals, they may be forced to buy some of their stock from one or more other wholesalers and thus cannot pledge to only buy direct.  It is possible that some of these wholesalers may buy drugs on the secondary market where there is still a chance they could fall prey to the kind of criminal activity that Eban documented in her book.  If that were to happen, these companies could unwittingly distribute illegitimate drugs to their customers.

3.  Returns through a legitimate wholesaler

For this scheme to work, a criminal needs to buy a significant amount of legitimate product from a legitimate wholesaler, then return those drugs for credit, but instead of physically returning the real product, the criminal ships back the counterfeit or stolen product and the unsuspecting legitimate wholesaler then unknowingly redistributes the illegitimate product to other customers.  The criminal would then sell the good product to someone else.

But there are a number of reasons this is highly unlikely.  First, to make enough money to justify the crime, the criminal would have to be licensed as a wholesaler, otherwise they wouldn’t be able to sell the good drugs to someone else in volume.  If they were a pharmacy, they could dispense those drugs to unsuspecting customers, but the volume would be too low to be very profitable.

Second, if the criminal has a ready buyer for the good drugs they would receive from their original legitimate purchase, why would they bother with the return? Why wouldn’t they just sell the illegitimate drugs directly to that buyer?

4.  Criminal wholesalers and/or pharmacists/pharmacies

In all 50 states it is a crime to purchase regulated pharmaceutical supplies from any company who doesn’t hold a valid license as a drug wholesaler in that state.  Any wholesaler, pharmacy or pharmacist who buys drugs from an unlicensed source is a criminal subject to prosecution, prison time and/or fines.  It is possible that any illegitimate drugs found in the inventory of a given wholesaler or pharmacy could have arrived there because the business owner, or an employee has actually crossed the line and become a criminal themselves.  This is not an unknown occurrence.

Take for example the case of Pamela Arrey of Glenelg, Maryland who pled guilty earlier this year to a number of charges, one of which was that she bought drums of expired medicines from an unlicensed source and dispensed them to patients out of two pharmacies she owned in the Baltimore area.  This sad story shows just how far a licensed pharmacist went into the dark once she made the conscious decision to step across that line and become a criminal.

I’m not the only person who is wondering where all the drugs stolen recently in cargo thefts are going.  In a CBS BNET blog post over the summer (“Stolen Advair Shows How Pharmacies Are the Crime-Infested Ghettos of the Drug Business”, pharma industry blogger Jim Edwards explains his theories about where it is going.  Unfortunately he quotes heavily from a CIO Magazine article from 2007 which contains quotes from people who relate stories from the early 2000’s, right back in the era before the wholesale segment was cleaned up.  It’s no surprise then that the stories are scary and that Edwards’ opinion is so blunt.  Katherine Eban already covered those stories, and did a better job of it.  I’d like to hear about the results of more recent investigations.

WHAT EFFECT WOULD DRUG PEDIGREES HAVE ON THESE POTENTIAL PATHS OF ENTRY?

If drug pedigrees are to put an end to the movement of illegitimate drugs into the legitimate supply chain, they would have to block all four of the potential paths of entry into the legitimate supply chain that I listed above, and maybe others I haven’t thought of.  I listed these four potential paths, not because I believe all of them are currently resulting in that movement, but because these are the only ways I can think of that could possibly result in it.  If only one of these ways turns out to be the actual path that these drugs have taken into the supply chain, then drug pedigrees would have to be able to block that one path.  Because we don’t yet know which path or paths it is, pedigrees would have to be able to block all four.  So would they?

Here is my list again with my thoughts on what effect pedigrees might have on them.

1.  Legitimate wholesalers ignoring their pledge to only buy direct from the manufacturer

I think a truly solid drug pedigree mechanism would prevent legitimate drug wholesalers from unwittingly buying and then redistributing illegitimate drugs because the criminal would not be able to forge pedigrees that appear to be “clean”.  Rather than exposing themselves to possible discovery, criminals would probably stop offering their illegitimate product for sale to a legitimate wholesaler (one who has chosen to ignore their pledge, that is).  However, if the buying wholesaler is known to not routinely bother checking the validity of the pedigrees for the product they buy, then pedigrees might not have any impact on this potential path.

2.  Legitimate wholesalers who are unable to make the pledge to only buy directly from the manufacturer

Just like the first path above, I think a truly solid drug pedigree mechanism would also prevent these legitimate wholesalers from unwittingly introducing illegitimate product into the supply chain, but with the same caveat as above.

3.  Returns through a legitimate wholesaler

Just as the two paths above, as long as the pedigree mechanism is solid and the legitimate wholesaler involved checks the validity of the pedigrees of the returned product, I think this potential path would be blocked.

4.  Criminal wholesalers and/or pharmacists/pharmacies

Here is where it gets interesting.  If a wholesaler, or one of their well-positioned employees, is a criminal, they could theoretically introduce illegitimate product into the wholesaler’s inventory by circumventing the pedigree check.  But that wholesaler would not be able to sell that product to a legitimate pharmacy customer as long as the pedigree mechanism is solid and the pharmacy checks the validity of the pedigrees for the drugs they buy.  So for wholesalers, pedigrees would do their job by blocking or exposing the criminal act.

But what if the criminal is a pharmacist or a well-positioned employee of a pharmacy?  Think of a situation like that of pharmacist Pamela Arrey that I mentioned above.  In that situation the illegitimate drugs would be knowingly bought by the employee and introduced into the “supply chain”.  It’s not much of a supply chain considering that the bad drugs are introduced right at the endpoint.  In fact, I personally don’t consider the pharmacy alone to be “a supply chain” so, to me, illegitimate drugs introduced there should not be considered to be introduced into the supply chain.

How would pedigrees help here?  The single opportunity for a pedigree validity check would be with the pharmacy, but in this instance, that’s where the criminal is.  A criminal is not going to bother checking any pedigrees because they already know they won’t check out.  The consumer who is dispensed the illegitimate drugs will never know because pedigrees are supply chain technologies that are not passed on to them (they wouldn’t know how to interpret them anyway).  Supply chain pedigrees stop at the pharmacy…in this case, at the criminal.

At the very least, in this kind of situation, pedigrees—or the lack of them if mandated—could be used to make it much easier to prosecute the criminal(s).  But if they won’t help detect the crime, easier prosecution might not matter very much.

Without the benefit of a pedigree mandate, when an investigator asks a criminal in a pharmacy where they bought the illegitimate drug that was just found in their inventory, they will certainly say they bought it from a wholesaler, even when they know they actually bought it illegally.  It would be quite easy for the criminal pharmacy worker to tell that lie, because they will certainly have some documentation that shows that they have bought that same kind of drug from one or more legitimate wholesalers in the past.  Since there are currently no serial numbers or even lot numbers indicated on shipping documents or invoices, no one can tell whether those documents refer to the illegitimate drug package being investigated, or some other one that has already been dispensed.

Here a drug pedigree would help to focus the investigation on the actual criminal, but only after the illegitimate drug was detected by some other means.  Without pedigrees in this situation, the criminal would be able to cast doubt into the mind of the investigators and erroneously implicate the innocent wholesaler.

Also, without pedigrees the wholesaler would have no way to definitively prove that they did not supply the illegitimate product, further casting doubt about who is the actual criminal.  Considering the history of criminal wholesalers and the unknowing complicity of legitimate wholesalers who once traded in the secondary “grey” market in the early 2000’s–all of which is so well documented by Katherine Eban–it may not be surprising if an investigator holds some suspicion of that wholesaler today.

I would also like to note to the proponents of Point of Dispense (POD) authentication that a POD approach would not prevent this kind of criminal attack on the supply chain.  Would the criminal bother to authenticate drugs that they know to be illegitimate?  No.

DO WE EVEN NEED TO MANDATE DRUG PEDIGREES ANYMORE?

A full pedigree mandate for all drugs in the U.S. supply chain would carry a heavy price tag throughout the supply chain.  As long as the mandate included the requirement that all buyers validate the entire pedigree, and as long as the technology used enables a rigorous validity check, I think that drug pedigrees would effectively block all of the paths of entry of illegitimate drugs into the U.S. supply chain, except when the criminal is in the pharmacy.

The question is, which of the four paths of entry I have listed are actually taking place today?  I don’t know, but I hope investigators from the FDA and the California Board of Pharmacy have a better idea and that they use that information to drive decisions about pedigree mandates from here on.

If it turns out that these drugs are entering “the supply chain” directly at pharmacies, then pedigrees will contribute no value in detection, and only some value in the prosecution of the criminals.  Is that worth the cost?

Four years ago the GS1 EPCglobal Software Action Group (SAG) Drug Pedigree Messaging Work Group was wrapping up the standard specification for the GS1 Drug Pedigree Messaging Standard (DPMS, aka GS1 Pedigree Ratified Standard).  That standard was developed through collaboration between U.S. pharmaceutical supply chain members, industry associations, solution providers and GS1.  DPMS 1.0 was ratified by the EPCglobal Board in early January 2007.

DPMS has many benefits.  It results in a self-contained, self-secure electronic document that clearly shows the chain of ownership and/or custody of a given drug package (or a set of packages if they all have the same history).  It works equally well with serialized and non-serialized products.  The security of DMPS documents comes from within the electronic documents themselves rather than just from a security layer wrapped around a given server.  A self-contained, self-secure document model should work well as evidence in a criminal trial.

But even before DPMS was ratified people were raising questions and concerns about it.  Those concerns were:

1. While it is great for providing a “trace” of a drug through the supply chain–that is, it provides a supply chain history to each buyer of a drug–DPMS does not provide any mechanism for “track”–that is, providing a downstream view of the supply chain history to previous owners including the manufacturer.  This would be important for some non-regulatory applications of track and trace.
2. As DPMS pedigrees move down the supply chain, they get bigger, and thus the storage burden gets bigger as they move.  This is because the chain of ownership/custody is longer and so more data is contained in each pedigree.  Because DPMS electronic documents are complete and self-contained, trading partners near the end of the supply chain, pharmacies in particular, must hold larger documents than trading partners near the beginning.  While this is partly offset by the fact that manufacturers will need to store pedigrees for many many more drug units than pharmacies, wholesalers fall somewhere in the middle.
3. The DPMS pedigree model results in duplication of data across the supply chain.  That is, most of the data contained in a pedigree that a pharmacy holds will also be held by the wholesaler, and some of it will also be held by the manufacturer.  This duplication would help investigators figure out exactly what happened to a given drug as it moved through the supply chain, but it results in greater data storage requirements for all non-manufacturer trading partners than would exist in a distributed pedigree model.  In theory, this duplication lowers the risk that a given trading partner would be falsely accused of criminal activity by allowing them to hold their own copy of the clean pedigree as they received it and as they sent it to their customer.  They would not need to rely on a third-party to keep their pedigrees secure.
4. Because an electronic document must be passed from the buyer to the seller in every distribution of a drug, a data communications channel must be established between each seller and each of their customers.  This represents a huge increase in the number of channels that are in use today.

Faced with these challenges just as DPMS was being ratified I drew up an alternative approach to pedigree and presented it in an EPCglobal Joint Action Group (JAG) meeting in Orlando in January 2007.  I called the idea “A Semi-Centralized, Semi-Distributed Track and Trace Pedigree System”.  My goal was to eliminate or reduce the magnitude of the problems raised over DPMS, but I also wanted to retain its benefits.

The only alternative to DPMS that has been proposed by others is what I call the “distributed pedigree“, where no one would hold the complete pedigree unless a regulatory inspector demands to see it.  In that case, a local system would query all of the prior owners of the drug for their part of the pedigree.  These partial pedigree components would be collected and then pieced together to form the complete pedigree, just for the inspector.  

In my view, this distributed pedigree fails to secure the supply chain because it turns the pedigree validation step into a rare, after-the-fact activity instead of an automatic and routine activity performed every time a drug is acquired from a supplier.  We lose the ability to monitor for the introduction of illegitimate drugs into the legitimate supply chain at every step and it becomes the responsibility of the government to monitor the supply chain.  On the other hand, DPMS keeps the complete pertinent data set in the hands of each member of the supply chain and distributes the responsibility for monitoring supply chain integrity to all trading partners.  In the distributed pedigree concept, the data is distributed and the responsibility for monitoring it is centralized with the government.

My goal was to retain the centralization of the data but keep the ability for validating the pedigree at every step.  I recognized the need for a central repository for pedigree data, but not a single, massive and impractical ”database in the sky”.  Because the central repositories would need to be very high performance, highly available and disaster recoverable, they would be costly.  The pedigree model would need to include a way to pay for these costs.

SEMI-CENTRALIZED, SEMI-DISTRIBUTED

My idea started with the requirement that each drug manufacturer establish a contract with a pedigree service provider that would host all of the supply chain pedigree data for the drugs that the manufacturer introduces into the supply chain.  They would pay for this service and all downstream trading partners would be given controlled access at no additional charge to allow them to deposit their part of the pedigree whenever the drugs of the associated manufacturer are sold.  In this way, the pedigrees are semi-distributed across all manufacturers, but they are also semi-centralized in that all pedigrees of a given manufacturer would be in one place.

Access to the data would be tightly controlled by the pedigree service provider so that no one, including the manufacturer who is paying for the service, could see the data contributed by other parties unless they currently own  the drug, or did so in the past.  And then, they could only see the supply chain history prior to their owning the drug.  Any trading partner could request a full pedigree, rendered in a DPMS document, that would show their ownership of the drug and all prior owners (a “trace”).  A view the other direction, down the supply chain (a “track”), would be allowed only when data sharing agreements are in force between trading partners, thus enabling non-regulatory uses of supply chain history data.

Each time a seller sells a drug to a trading partner the seller and the buyer would provide data about the transaction to the pedigree service provider of that drug.  When the service provider receives the data they would run a validation check to make sure that the pedigree is complete and consistent.  If it is not, all pertinent parties would be notified.  This includes the buyer and seller and could include the manufacturer and/or regulators.

FUNDING

The funding model of any given pedigree model is very important.  A pedigree model might sound great, but if it can’t be funded fairly, it won’t work.  For my proposed model, the cost to the manufacturer for the pedigree service would depend on the volume of drugs that the manufacturer introduces into the supply chain.  That payment would cover pedigree data services for the life of the product so that if the manufacturer goes out of business, the pedigree service for the product made and sold prior to that would already be paid for and would continue.  This cost would be added to the cost of the drugs and governmental drug pricing administrators would need to acknowledge and allow these true costs to be added. 

Each trading partner would need to contract with a single Connectivity and Information Exchange service provider that would provide services to seamlessly connect them to the pedigree service providers of all drug manufacturers.  The trading partner would pay for this service.  These fees should be much smaller than those paid by the manufacturer and so these costs would be absorbed by each trading partner.  It would become an additional cost of doing business in the pharmaceutical supply chain.  This is a fair and equitable way to fund supply chain security.

THE TECHNOLOGY

I envisioned that trading partners would make use of a data repository based on GS1′s Electronic Product Code Information Servicers (EPCIS) standard to hold their part of the pedigree data.  Because they would provide this data to the pedigree service provider, the official copy of the data would be the one held by that third-party and there would be no need for directly querying another trading partner’s EPCIS.  Each trading partner’s pedigree system would need to be able to understand the DPMS document format as well since that would be the format that a complete pedigree would be rendered in by the pedigree service provider whenever it is needed.

(Click on image to enlarge)

The pedigree service provider’s system would likely be partly based on the EPCIS interfaces but this software would be specialized to understand DPMS as well since it would need to construct DPMS pedigrees on demand.  The data would not be stored as DPMS pedigrees to avoid the duplication of data.  The digital signatures of each trading partner contained in a DPMS pedigree could now be replaced with a digital signature applied by the pedigree service provider as a way to stamp it as having been produced by the official service provider for that drug.  The EPCIS events contributed by each trading partner could also be digitally signed to provide DPMS-like non-repudiation, but only the pedigree service provider would need to validate those signatures so they would not appear in the DPMS pedigree report.

I don’t see any need for GS1′s Discovery Services, but others may see a place for it.  Back in 2007 I created a series of drawings that steps through the operation and it made use of GS1′s Object Naming Service (ONS) for each trading partner (via their connection and info exchange service provider) to find the pedigree service provider that is handling the pedigrees for each unit by serial number (EPC, that is).

THE KEY FEATURES

In 2007 I listed these key features of my design:

• Third-party hosts Pedigree Repository Services (Semi-Centralized)
• Pedigree Repositories distributed across multiple Service Providers (Semi-Distributed)
• Enables competition for Pedigree Repository Services and Connection & Info Exchange Service contracts
• Concentrates the need for High Availability and Disaster Recovery in service provider organizations rather than trading partners
• Minimizes the number of “hops” necessary to obtain the pedigree (also, # of hops does not grow)
• Enables optional item authentication at the same time pedigree is updated
• Data Security is maintained by service providers who are under contract
• GS1 ONS prevents counterfeiter from serving bogus pedigree and enables data to be moved from one service provider to another, preventing vendor “lock-in”
• Provides a practical and flexible data visibility control mechanism based on contracts
• Third-party is responsible for deleting pedigree data only after expiration of the longest legal deadline of the last pedigree transaction

WHAT EVER HAPPENED TO THIS IDEA?

What happened?  In short, nothing.  At the meeting where I presented this approach, a number of solution providers had joined forces to pitch the EPICS plus Discovery Services model and the distributed pedigree concept was born.  Since that time GS1 has pursued the development of Discovery Services, which is still far from completion. 

I continue to believe that my Semi-Centralized, Semi-Distributed Pedigree idea is still the most viable alternative to a pure DPMS pedigree model but the idea won’t progress any farther than this unless others in the supply chain recognize its strengths in comparison to either a pure DPMS or a distributed pedigree model based on EPCIS.