I received news last night that my friend and co-worker, Ivan Shen, passed away on Sunday after losing a five month battle with cancer. During his career Ivan worked for serialization and pedigree companies including Oat Systems, Reva Systems and SupplyScape (now TraceLink). Many RxTrace subscribers are current or former co-workers or former customers of Ivan. Continue reading Yifan “Ivan” Shen (1962–2010)
Back in 2005 I created a line graph of my personal prediction of the percentage of pharmaceuticals in the U.S. supply chain that would be unit-level serialized by the manufacturer and I circulated it among my co-workers at the time. I based it purely on guesses that were “supported”–very flimsily–by the number of large pharmaceutical manufacturers who were participating in the GS1 EPCglobal Healthcare and Life Sciences (HLS) Business Action Group (BAG) (the group is now defunct), and the existence of an early version of the California Pedigree Law. The graph included a high and low line that formed a band that I thought would be where the reality would fall. In that prediction I didn’t think most manufacturers would achieve 100% serialization of their products until sometime between 2010 (high) and 2015 (low).
In my analysis at that time, I theorized that the actual percentage would start out following my “low” estimate line, but at some unpredictable point, something would happen that would cause the percentage to jump up to the “high” estimate line. At the time, I assumed the event that would cause that jump would be the U.S. Federal government issuing some kind of pedigree regulation that included a unit-level serialization requirement.
As it turned out, things moved slower than I had guessed. Here it is 2010 and the percentage of drugs in the supply chain with unit-level serial numbers on them is so small that it’s tough to give it a percentage. But I think my estimate from way back in 2005 was not bad for its time (but notice I’m not publishing the actual graph). After all, the California Pedigree deadline has been pushed out at least three times since then (from 2007 to 2009, to 2011, to 2015/1016).
I think the future is a little less murky now because, since 2005, Continue reading Estimated Rise In Serialized Drugs In The U.S. Supply Chain
RxTrace is now one year old. There are 34 essays that together amount to a true liberal exploration of the intersection between the pharmaceutical supply chain, track and trace technology, standards and regulatory compliance…as promised.
My personal favorite essays from the past year, in chronological sequence are:
- The Florida Pedigree Law (August 10, 2009)
- The California Pedigree Law (September 7, 2009)
- What Are Pedigree Laws Trying To Accomplish Anyway? (November 2, 2009)
- Who owns supply chain visibility data? (December 31, 2009)
- The Deputized Supply Chain (January 31, 2010)
- FDA Aligns with GS1 SGTIN For SNDC (March 29, 2010)
- RFID is DEAD…at Unit-Level in Pharma (April 12, 2010)
- The Modern Pharmaceutical Wholesaler and the Approaching Transformation (May 7, 2010)
- California Pedigree Law: Historic Change to Commerce (June 14, 2010)
Since late January I have been collecting some statistics on page views on RxTrace and here is the list of the essays in the sequence of page views since that time. Continue reading RxTrace, One Year Retrospective
Understanding the concept of “Normal Distribution” is important in understanding the status of pedigree regulations in the United States pharmaceutical supply chain. The term itself didn’t exist back in the late 1980’s when the federal Prescription Drug Marketing Act (PDMA) pedigree provisions were originally enacted by Congress but the concept is built into that law as the “Authorized Distributor of Record” (ADR) concept. When states began enacting their own pedigree legislation back in the early 2000’s, the term “normal distribution channel” was defined to describe the path of drugs when they move through the most common–or “normal”–sequence of supply chain owners. It’s a concept that is explicitly defined in most state pedigree legislation.
When a pedigree law is a “normal distribution” law, it generally means that pedigrees are not needed for any shipment or change of ownership where the drugs do not leave this common/typical/normal path as defined in the law. But as soon as a change of ownership or custody occurs where the drug leaves this “normal” path, a pedigree is then necessary.
Typically, when a pedigree is required outside the “normal distribution channel”, that pedigree must Continue reading The “Normal Distribution” Concept
“…[C]ommencing on July 1, 2016, a wholesaler or repackager may not sell, trade, or transfer a [prescription] drug at wholesale without providing a pedigree.
…[C]ommencing on July 1, 2016, a wholesaler or repackager may not acquire a [prescription] drug without receiving a pedigree.
…[C]ommencing on July 1, 2017, a pharmacy may not sell, trade, or transfer a [prescription] drug at wholesale without providing a pedigree.
…[C]ommencing on July 1, 2017, a pharmacy may not acquire a [prescription] drug without receiving a pedigree.”
With these words the State of California introduced a significant change to the way the pharmaceutical supply chain works (see section 4163 of the California Business and Professions Code) and has written a new page in the history of commerce. It brings pharmaceutical commerce fully into the computer age. Adam Smith would not recognize it. Today, and up to the effective dates of these provisions, the value of a legitimate pharmaceutical in the legitimate U.S. supply chain is determined by the physical condition of the product and its package. After July 1, 2016, the value of a legitimate pharmaceutical in the supply chain in California will be determined by the combination of the physical condition of the product and its package, and the sellers ability to provide the buyer with an electronic pedigree.
The intended effect of this new regulatory requirement is to place a significant roadblock in front of counterfeiters, diverters and others who would try to scam patients and the legitimate participants in the supply chain. This is a noble cause. By requiring sellers to provide buyers with a pedigree at each change in ownership in the supply chain, illegitimate parties will find it very hard to inject illegitimate drugs without exposing their actions and, at the same time, creating evidence that can be used against them in their own prosecution. By providing a pedigree at each change in ownership, supply chain buyers will be able to check the authenticity of the full supply chain transaction history provided by the seller, maximizing the likelihood that any suspicious activity would be detected long before a patient would receive the drugs.
But I’m more interested today in exploring a surprising unintended effect of these requirements. I’ve touched on this briefly in past essays but I’ve recently concluded that the implications of these requirements are much more significant than I realized before. This may be the first time in the history of commerce that Continue reading California Pedigree Law: Historic Change to Commerce
In an essay published in April, I explained my theory that “RFID is DEAD…at Unit-level in Pharma”, which, if true, would mean that most drugs in the U.S. supply chain would be serialized by manufacturers with 2D barcodes by 2015 for California. In my last essay, “Inference in the Pharmaceutical Supply Chain”, I carried that theory one step further by showing how the widespread reliance on 2D barcodes to serialize at the unit level would lead directly to the widespread use of the practice of inference in the supply chain. This would be out of necessity since the unit-level serial numbers would not be readable without opening their containers, something that can’t happen because it is so inefficient that it would cripple the supply chain. So let me say it this way, the widespread use of 2D barcodes for unit-level serialization will necessitate the widespread reliance on inference. The former leads to the latter just like excessive sunshine leads to sunburn.
But the projections of widespread reliance on inference lead directly to a new concern. Let me explain. Successful use of inference for determining the contents of cases is totally dependent on the accuracy of the aggregation information established and provided by the manufacturer, or whoever packed them. If a packer uses a casepacking process that is incapable of yielding highly accurate aggregation information, inference will not work well.
This is a problem. A big problem, because Continue reading Will The Pharma Supply Chain Be Able To Use Inference? Maybe Not!
In my recent essay, “RFID is DEAD…at Unit-level in Pharma”, I used relative cost estimates to theorize that Radio Frequency IDentification (RFID) will not be the predominant carrier of serial numbers applied to drug packages for compliance with U.S. pedigree laws. My theory is that there will actually be a mix of RFID and 2D barcodes, and that barcodes will be the predominant carrier technology. As you might expect, that was a little controversial with the RFID industry (See RFID Journal’s blog post in response to my essay). Hey, it’s just a theory. I too, wish everything would be RFID, and for all of the reasons cited by RFID Journal. It’s just that I don’t believe it’s going to turn out that way and that’s based on the logic I laid out in my essay. (Also see FiercePharma Manufacturing’s more neutral post in response to my essay.)
BARCODES WILL PREDOMINATE. LET’S MOVE ON…
In a mixed-but-predominantly-barcode-serialized U.S. pharmaceutical supply chain, companies will not be able to tell which unit serial numbers are inside of each sealed case at receiving or at shipping. Because barcodes are a “line-of-sight” technology, the only way to tell with absolute certainty what the sealed-up unit serial numbers are will be to cut the tape seal, open the case, expose the barcodes, scan each unit and tape the case closed again.
It is a ridiculous notion to believe that Continue reading Inference in the Pharmaceutical Supply Chain
The modern pharmaceutical supply chain is an amazing thing. No other supply chain handles the combination of volume, variety, value and complexity, and does it as efficiently and accurately as the U.S. pharmaceutical supply chain. And it does it on an overnight order-to-delivery cycle from wholesaler to pharmacy. Wholesalers are the key to the efficient operation of the pharmaceutical supply chain, and that’s why I am personally drawn to that segment.
The heart of the modern drug wholesale business—the thing that makes it live, kicking or screaming—is the modern pharmaceutical distribution center (DC). That magical combination of people, processes, data and automation produces a dance every night across the country where individual drug packages are picked from cases and combined with other individual drug packages to fulfill the orders of pharmacies everywhere. It is musical to watch and understand, and the crescendo occurs around 10:30pm every night local time at every pharma DC. Today’s successful wholesalers have figured out how to deal with this specific complexity by organizing their people, processes, data and automation in a stabilizing way to make it all manageable, repeatable and very efficient, and thus making it possible to carve out a thin but well-earned and reliable profit.
Over the last 20 years only a few companies have found a way to surf this traditional complexity to profitability. But faced with the supply chain transformation that will occur soon as the result of widespread serialization and pedigree requirements, the complexity these companies face seems likely to Continue reading The Modern Pharmaceutical Wholesaler and the Approaching Transformation