How are you? I’m sure your summer has been busy, just like mine. Hope you were able to get at least some time away. I’ve taken most Saturdays off, but the other days of the week have been very full with consulting, and then writing RxTrace essays every Sunday. You know, the wife is not very happy about that!
The reason I am writing directly to you at this time is to ask a question that I hope you are asking yourselves and planning ahead for. It has to do with what your plan is when each of your serialization regulations actually go into effect. For the U.S., that’s November 27, 2017; for ANVISA, that’s December 11, 2016; and for the E.U., that’s probably sometime in late 2018 (as you know, that’s dependent on when the final text of the Delegated Act is published in the next six months or so…see “The ‘Unique Identifier’ in the EU Delegated Act”). On those dates, your respective regulations require drug manufacturers to have almost all of their prescription drug packages serialized.
Probably a majority of drug manufacturers (A) are going to be ready by your deadline. But based on observation of how these things go, no matter when your deadlines are set for—even if you ultimately delay them to a later date to accommodate procrastinators—some companies are not going to be ready on your particular deadline. There are lots of reasons for that. Some companies (B) have so many packaging lines that they will have trouble converting them all in time, despite their best efforts. Some companies (C) rely heavily on contract packaging organization and are at the mercy of their line conversion efforts. And yes, a few companies (D) are probably going to miss your deadline just because they are gambling that you are going to delay your deadline and they would get a leg up on their competition, or raise their stock price, by delaying the cost of upgrading their packaging lines until it is absolutely necessary…maybe even intentionally after your deadline actually goes into effect.
So here is my question. Who are you going to punish when companies B, C and D miss your deadline?
I know, I know. Regulators don’t like to view what they do as “punishment”. Even companies in the “D” category are not criminals and we really should not plan to “punish” them for missing the deadline. In fact, what we want to do is provide them with an incentive to be ready on time, or as soon after the deadline as they can if being on-time is not possible for reasons beyond their control.
I like that too! But here’s the thing. If you end up delaying your deadline, you end up punishing the companies in the “A” category, even if you don’t mean to. They could have delayed their investments too, and they would have benefited from that, but they chose not to. Being ready on-time is going to cost them more than if they were not ready. If they end up being ready, and you then delay the deadline for compliance, you end up giving a “black-eye” to the people within those organizations who evangelized the need to be ready on-time. These are the people who are, right now, championing the importance of meeting your deadline. You might even hurt their careers because, to make sure their organizations are ready on-time, they are burning up social and professional currency by having to twist arms to get funding, and get people to move, and get their corporations to think differently. If/when you push out your deadline at the last minute, you are pulling the rug out from under these people.
I saw this happen back in 2008 when California pushed out their ePedigree deadline from 2009, then 2011, then to 2015-2017 (the California ePedigree law is now obsolete as the result of the Drug Supply Chain Security Act, DSCSA, see “The California Pedigree Law Is Now Officially Inoperative“).
The punishment does not end with people within drug manufacturer organizations. Many serialization consultants and solution providers lost most of their business and lost credibility when California pushed out their dates. The whole budding industry was turned upside-down as a result.
On the other hand, when you push out your deadline you inadvertently promote the career of the person in the “D” corporations who first proposed a strategy of ignoring your deadline. Trust me, these people exist, and they turn out to be the instant hero when you push out. They helped defer a huge expense, and it turned out to be a winning strategy. Time for a promotion…and to reapply that same strategy for any future deadlines you might have coming up.
So you see, whatever you do, you are going to punish someone. Would you rather punish the people and companies in the “A” category, or those in the “D” category? Pick one. And then develop a plan around that choice.
ONE WAY TO AVOID PUNISHING THE “A”s
Here’s how I would do it. I would decide right now that delaying the deadline is not going to happen. And I would develop a plan to impose very small fines on the “B” and “C” companies. These could be viewed as just “token” fines initially that escalate into something more significant the longer it takes them to be fully compliant. But for the “D” companies—those who cannot document a concerted effort to prepare for your deadline well in advance—you should consider more significant penalties. Odds are these companies will take the longest to come into full compliance so perhaps you could make the initial penalties be very small, but then escalate them rapidly after some period of time. That way they would apply to everyone the same and avoid a court challenge of fairness. BTW, this idea is based on one I wrote about a few years ago for the California ePedigree law (see “Will The California ePedigree Dates Slip Again?”).
If you develop a plan like this and announce it in advance, companies will likely adjust their adoption plans around it—some accelerating, and perhaps some decelerating—but people will recognize that your deadline is real and is not likely to change, so perhaps more companies will take it seriously. The likely affect would be fewer companies in the “D” category. And then you would end up punishing fewer companies, and fewer people.
One more thing. The FDA recently delayed enforcement of a few of the DSCSA provisions for most companies in the supply chain by four months (see “FDA Postpones Enforcement of DSCSA Transaction Data Exchange Until May 1” and “FDA Publishes New Guidance Delaying Dispenser 3T Requirements Until November 1, 2015”). Those delays were not too bad because four months is pretty short, and it was an enforcement delay rather than a delay of the deadline itself. Well done. But because the addition of serialization to all Rx drug packages requires so much more time, expense and effort to be ready by a given date, I don’t think this kind of approach is going to work for your serialization deadline.
So what’s it going to be? Who are you going to punish?
Sincerely, Your Friend,