California’s Draft Inference Regulation

Thinking cardboard boxImportant Notice To Readers of This Essay On November 27, 2013, President Barack Obama signed the Drug Quality and Security Act of 2013 into law. That act has many provisions, but one is to pre-empt all existing and future state serialization and pedigree laws like those that previously existed in California and Florida. Some or all of the information contained in this essay is about some aspect of one or more of those state laws and so that information is now obsolete. It is left here only for historical purposes for those wishing to understand those old laws and the industry’s response to them.Yesterday I published an essay about the new discussion draft of a Federal track and trace regulation bill from the Senate HELP Committee.  It is definitely worth watching closely, but don’t let it take your eye off of the California regulations.  Those are real today and will move forward unless Congress and the President complete the enactment of a bill that preempts the California law.  That’s a long and uncertain road and the discussion draft released last week is only the first unofficial step.

Last week I wrote about the new draft regulation on certifications in California e-pedigrees.  In the same document—distributed by Joshua Room, Supervising Deputy Attorney General, California Department of Justice assigned to the California Board of Pharmacy, at the March 14, 2013 Enforcement Committee meeting (and converted to MS Word document form by me)—on page 3, you will find the draft regulation for the use of inference.  This draft regulation is apparently based on the minimal input the Committee collected last fall when they asked for public comments on the use of inference.

Just like the draft certification regulation, I have marked up the inference draft with my recommendations for making the regulation more workable.  You can see my markups in this document.  These are just ideas.  I’m not going to submit them to the Board but those of you from companies in the supply chain should consider submitting something like my comments because without changes like these you might find that the inference regulation is not so clear.

Basically my edits attempt to accomplish the following:

  1. Carry forward the recommended changes I included in my markup for the certification draft regulation that would enable the use of GS1 standards such as GLN, GTIN and one of the Network Centric ePedigree models.  See last week’s RxTrace essay for a full explanation.
  2. Carry forward the recommended changes for removing specific technology for securing and certifying ePedigrees, specifically digital signatures.  See last week’s RxTrace essay for a full explanation.
  3. Added references to repackagers so that their shipments are treated the same as those from manufacturers and so recipients can use inference on them.
  4. Added the ability for companies to use inference on shipments as well as receipts.  This allows wholesalers to ship full, homogenous cases received from manufacturers or repackagers to their customers without opening and scanning everything in them.  Until recently I used to think that manufacturers would also need to be specifically granted the ability to use inference on shipments in the regulation but I decided that their use would occur just prior the generation of the initial pedigree and so it should not be a part of the pedigree requirements.
  5. Adjust the language slightly to make it more clear that the containment hierarchy data is not part of the pedigree.  That’s because it was not specified in the actual law.  The Board of Pharmacy may disagree on this one (or any of these, actually), but in my view it should be outside the pedigree itself.  In fact, if they do believe that this data must be within the pedigree then you will not be able to use inference with DPMS and you will not be able to use serialized Advance Shipment Notices (ASNs) to carry the containment hierarchy.  DPMS includes a pedigree envelope to hold this hierarchy, but the data in the envelope is outside the actual pedigrees.  ASNs are not pedigrees either.
  6. Eliminated language that would result in requirements that I believe are excessive and unnecessary.  These include:
    1. A  cap on the number of packages within a case, over which inference would not be usable;
    2. The need to scan all of the contents of a case immediately after it is opened.  In my view, this would only be necessary if a discrepancy were found.  However, I changed the language to require all of the units to be scanned prior to shipment or dispensing, without a time limit.  I believe that this modification fulfills the need to protect patients without placing an unnecessary drag on efficiencies on wholesalers and chain pharmacies.
  7. I also lengthened and slightly redefined the requirement to resolve any discrepancies found after the use of inference.  Originally “48 hours”, my change proposes “4 business days” so that weekends are not counted.  These situations should be viewed as important, but not an emergency.  And some (most?) of these will take a lot of work to resolve.

Stakeholders should familiarize themselves with the ANSI/ASQ  Z1.4-2008 standard for quality sampling because you would be required to follow it to determine when you can use inference and when you must open a case to sample the quality of the containment hierarchy supplied by the upstream trading partner.  This standard is available from the American Society of Quality.

The draft regulation assigns liability for errors to “all parties propagating or relying on inference”.  I think this is fair, since errors in inference will likely be the result of incorrect containment hierarchy generated by the manufacturer or the repackager, and it will be the wholesaler and/or chain or mail-order pharmacies who will select the option of making use of inference.  All of these parties accept the risks by choosing to enable or use inference.

The regulation also requires the development and keeping of

“mutually-executed standard operating procedures (SOPs) that define, at minimum, the requirements to gain and maintain ‘trusted trading partner’ status, the circumstances under which an inference will be deployed, the limitations on that deployment, the sampling plan for sampling sealed, homogenous cases for continued compliance, and the means and time limits for remediation of any data or product discrepancies discovered, and where the source and recipient have a written agreement in place specifying the means and time limits of remediation of, and the apportionment of liability for, any discrepancies discovered in either the electronic pedigree data or the drug products received, either or both of which shall be made immediately available for inspection by an authorized officer of the law or by an authorized representative of the board, upon request;”

The draft regulation defines “trusted trading partner” status in detail.

The widespread use of inference will be critically important to the continuing operation of the pharmaceutical supply chain in California.  Without it, supply chain efficiencies will be lost, costs will rise significantly and  new types of errors will be introduced.  Getting this regulation right is the first step.  For that reason, it warrants careful attention and response to the Board.

Next week I will discuss the last of the three draft regulations that were published by the Enforcement Committee in March:  Inspections.  Watch for it.