Pedigree Models and Supply Chain Master Data

Important 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.Right now there is only one industry standard that can be used to comply with the various drug pedigree laws in the United States. That’s the GS1 Drug Pedigree Messaging Standard (DPMS), which was created in 2006 by a group of technology experts and participants from nearly all segments of the U.S. supply chain culminating in GS1 ratification in January 2007. Many of those companies began using DPMS even before it was ratified because the Florida Pedigree Law went into effect in July 2006. Since then, companies are using it to comply with other state pedigree laws as well as for the pedigree provisions of the federal government’s Prescription Drug Marketing Act (PDMA) of 1988 (stayed until December 2006). Interestingly, a few companies have chosen to require DPMS pedigrees today for trading partner risk mitigation even where there is no existing regulatory requirement to do so.

A few months after GS1 ratified the DPMS standard, they ratified the Electronic Product Code Information Services (EPCIS) standard. This is a more general purpose standard intended for use in all supply chains that have a need to track and trace serialized products. Everyone acknowledges that it doesn’t make sense to try to use it for compliance with PDMA, Florida or other state pedigree laws because they do not require serialization, but in 2015 the California Pedigree Law will go into effect and one of its unique provisions requires item-level serialization.  Some see this as an ideal place to apply EPCIS.

There are lots of ways to contrast these two standards and their use for pedigree law compliance, but probably the most striking difference is how they each treat Supply Chain Master Data (SCMD). I defined SCMD in a previous post as “…that persistent, non-transactional data that defines a business entity for which there is, or should be, an agreed upon view across the supply chain.

GLN as SCMD

Addresses are an example of a “business entity” that can be treated as SCMD. GS1 defines a location identifier they call a Global Location Number (GLN) that can be used to refer to an address. A GLN is a structured series of digits that can be assigned to refer to a single address (among other things). Refer to the GS1 General Specification for the details. Continue reading Pedigree Models and Supply Chain Master Data

“The State of Healthcare Logistics”

Earlier this year The Association for Healthcare Resource & Materials Management (AHRMM) and the Center for Innovation in Healthcare Logistics (CIHL) at the University of Arkansas published the results of a survey they conducted in 2008 titled “The State of Healthcare Logistics”. The survey polled 1381 healthcare supply chain professionals regarding their “perceptions of cost and quality efficiencies and improvement opportunities within their organization”. I’m always a little skeptical (alright, I’m a lot skeptical) of “perception surveys”, but since this one was focused on the specific supply chain that I’m a member of, I took some interest. This survey included a series of questions about the respondent’s perception of Data Standards, which really caught my eye.

In fact, I’ve been doing a little investigating myself into the competing standards that are related to supply chain master data. My career experience in this area has almost solely dealt with GS1 standards, but that may be because the healthcare part of my career has centered on the pharmaceutical distribution corner of the full healthcare supply chain. If it had been centered on the distribution of medical devices, I would have been much more familiar with HIBCC (Healthcare Industry Business Communications Council) supply chain data standards. I’ve been trying to figure out if the industry needs multiple competing data standards and, if not, which one is a better set: GS1 or HIBCC? And should I consider some other set of standards that I just don’t know about? Are there good reasons to continue the use of either or both sets of standards in our supply chain?

In this light, I turned my attention to the AHRMM/CIHL survey results, hoping to gain some valuable insight. I quickly got stuck on their very first survey question in the Data Standards section (on page 15 of their report):

A. Is your organization moving towards the adoption of a data standards system (such as GS1) in the next five years?

Now this is an amazingly bad survey question that wouldn’t even pass a “survey questions 101” class. It is a classic example of a leading question. One where the desired answer is provided directly in the question itself. But look at the choice of answers!

  1. Yes – GS1
  2. Yes – Other
  3. No
  4. Don’t Know

Continue reading “The State of Healthcare Logistics”

Master Data, Supply Chain Master Data and Instance Data

We need to make a clear distinction between traditional Master Data (MD), Supply Chain Master Data (SCMD), and Instance Data (IData). This will help us understand some important differences in various supply chain track and trace technologies.

Master Data

Wikipedia defines “Master Data” like this today:

“…Master Data is that persistent, non-transactional data that defines a business entity for which there is, or should be, an agreed upon view across the organization.”

This isn’t detailed enough for me. MD must include a data element that serves as an identifier. An identifier that refers to a given MD record must be unique within the organization.

Good candidates for MD are customer information, location information, product information and employee information. The characteristic these all have in common is that the data behind them rarely change. For example, I have been issued an employee number by my company. My employee number is the unique identifier for the MD that describes me to the company. My mailing address, phone number, marital status, social security number rarely change.

Most organizations make use of MD so that they can maintain the definition of these entities in a single place, and they can simply refer to these definitions through the corresponding unique identifier. The identifier provides a quick way to get to the full set of information. In many cases, the identifier can serve as a stand-in for the full set of information.

Supply Chain Master Data

Wikipedia doesn’t yet have a definition for Supply Chain Master Data. I’ve coined the term to describe something that is similar, but distinctly different than Master Data as described above. I’ll define it like this:

“Supply Chain Master Data is that persistent, non-transactional data that defines a business entity for which there is, or should be, an agreed upon view across the supply chain.” Continue reading Master Data, Supply Chain Master Data and Instance Data

Who’s Responsible for Global Supply Chain Security?

My favorite pharmaceutical supply chain blog is DrugChannels by Dr. Adam J. Fein (PhD). Dr. Fein started his blog in May 2006. I became a subscriber and regular reader sometime later that year. The focus of DrugChannels is “Pharmacy economics and the pharmaceutical supply chain”, which has often included very rational opinions on the economic viability of various pedigree laws.

My RxTrace blog has only been around for a short time and its focus is “the intersection between the pharmaceutical supply chain, track and trace technology, standards and regulatory compliance”. This is almost the inverse of DrugChannels. I’d like to think they are complementary but I suppose we can’t judge that until I generate quite a few more posts. Either way, I owe quite a lot to Dr. Fein and DrugChannels because they provided me the inspiration for starting this blog.

In a recent email exchange, Dr. Fein drew my attention to the FDA document, “Safer Medical Products: Investments for Supply Chain Safety and Security”, a 22-page apparent explanation for an increase of $166,433,000 and 346 FTE’s in the FDA’s FY 2010 budget proposal. Part of the increase “…includes investments that will allow FDA to implement new approaches to effectively regulate the safety and security of the supply chain of medical products …”. “Medical products” include human drugs, vaccines, blood and other biological products, medical devices, animal drugs and medicated feed.

New Approaches

The biggest driver of the need for the increase is the rapid globalization of the supply chain for medical products that end up in the medicine cabinets of Americans.

“The priorities proposed in this initiative will assure the safety and security of foreign and domestic sources of ingredients, components, and finished products at all points in the supply chain…”.

“Supply Chain Safety and Security relies on risk-based prevention with a verification-focused approach to hold all segments of industry accountable for ensuring that their products meet U.S. safety standards, with FDA verifying compliance with standards.”

“FDA will increase medical product safety and security by enhancing oversight of entities in the supply chain.”

The proposal promises to hire more experts and modernize FDA information technology. But it also includes funds to fight internet drug fraud, and to allow FDA to develop policy options related to drug importation.

“FDA will develop policies to implement the Administration’s policy of allowing Americans to buy safe and effective drugs from other countries.”

So is the FDA Responsible for Global Supply Chain Security?

Lots of interesting content for everyone to mull over. Daniel R. Matlis, president of Axendia, has done just that in a post on the PharmTechTalk blog. In his post he uses the FDA document to question whether securing the global medical products supply chain should be the FDA’s responsibility or the industry’s. It’s an interesting question and Matlis juxtaposes the FDA paper against comments reportedly made by Gerald Migliaccio, Vice President of Quality, EHS and Agility at Pfizer Global Manufacturing at a recent joint session of the PharmTech Conference and the Manufacturing Execution System in Life-Sciences Congress. Migliaccio believes that, “Supply chain security is the responsibility of all parties involved in procurement/ sourcing, manufacturing, packaging and distribution of raw materials, intermediates and final product.”

Matlis concludes that industry and regulators have different roles in securing the supply chain and that we all benefit by their efforts. After raising such a provocative question, I felt let down by such a milquetoast conclusion. Like Gerald Migliaccio, I believe the responsibility for supply chain security falls squarely on every participant in that chain, global or domestic. FDA is an arm of our government—that which is of, by and for…us, the consumers, the patients. To me, it seems backwards to make the consumer/patient responsible for the safety and security of the supply of products that are advertised as being safe and beneficial to our health and wellbeing.

I’m not arguing against the existence of the FDA, only the argument that it is up to the FDA to ensure the safety and security of the supply chain. What we need from the FDA are standards that ensure that illegitimate supply chain activity can be detected automatically by the supply chain participants themselves. Arming each buyer in every purchase transaction in the supply chain with the means to reliably, quickly and independently verify each prior transaction back to the original manufacturer would accomplish exactly that. I’ll explain how that can be done in future posts.

The California Pedigree Law

Important 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.The original California Pedigree Law was passed back in 2004 and it was subsequently modified by the State Legislature in 2006 and again in 2008. In all three instances, I understand that members of the legislature and the Governor’s office worked closely with the State Board of Pharmacy to develop the final content and language.

I heard that one of the goals was to create a better law than the one in Florida. Did they succeed? In order to find out, let’s take a closer look at how they compare.

The law that is currently on the books in California differs from the Florida Pedigree Law in the following ways:

  1. It is fully electronic (it is NOT paper-based)
    The law and all of the discussion of the law by the Board of Pharmacy make it clear that the only acceptable form of a pedigree is electronic. This make it much more reasonable to implement because supply chain members can make use solely of computers to exchange, store and validate pedigrees, without fear that their trading partners can only handle paper pedigrees.
  2. Pharmacy returns must be reflected on pedigrees
    This was an original requirement of the Florida Pedigree Law too, but it was removed under pressure from lobbyists before the law went into effect. So far, it remains intact in California, but the law is not yet in effect. What it means is that when a pharmacy buys drugs from someone and they return those drugs, regardless of how little time has transpired, they must provide a pedigree update so that subsequent buyers of those drugs can see their purchase, and return transactions. This is no different from the requirements faced by all other segments.
  3. It starts with the manufacturer
    In Florida the first wholesaler started the pedigree. In California, the pedigree must be started by the manufacturer or it is not valid. If you are looking to expose the full history of package of drugs, how could you not start with the manufacturer? I even think the manufacturers generally agree with that notion.Interestingly, the Law doesn’t actually require anything of the manufacturers directly. It is directed at wholesalers who are licensed to operate within the state. Distribution of a drug without a pedigree that was started by the manufacturer is illegal and subject to penalties, but it is the wholesaler who violates the law and is punished, not the manufacturer. Thus, if a given manufacturer fails to provide California wholesalers with serialized product and compliant pedigrees by the time the law goes into effect, it will be up to the wholesaler to decide not to distribute those drugs within California in order to avoid violation of the law and avoid the associated penalties. The only risk a manufacturer takes on is that their drugs may no longer reach patients in California (and the subsequent PR firestorm that would follow).
  4. It requires item-level serialization
    California is very clear that they consider the concepts of “electronic track and trace” and “item-level serialization” as being inseparable. That is, if you have one but not the other, then you don’t have a pedigree system. Every drug package must have a unique identifier on it, applied by the manufacturer or repackager, and that UID must be included in the pedigree (the electronic record). This is a substantial difference from the Florida law which has no such requirement.
  5. No holes designed to accommodate special interests
    I’m not aware of any special treatment in the Law for any particular segment of the supply chain. Florida opened several holes that seriously compromise the intent of their law. So far, California has resisted opening holes, unless you consider pushing back the effective date to 2015-2017 a “hole”. 😉

Attentive readers will notice that I have listed these differences in the same order as my list of failures of the Florida Pedigree Law in my earlier post about the Florida Law. This is my way of showing that California has, so far, created a pedigree regulation that does not have any of the major failures of the Florida regulation.

These are the major differences, but what about the common characteristics? Here are the key things that the California Law has in common with the Florida Law:

  • Reliance on Digital Signatures
    Florida allows a pedigree to be created, stored and passed in electronic form, though they don’t require it. But if a Florida pedigree is in electronic form, digital signatures are required for the same purpose as a hand-executed signature on a paper document. The digital signature legally binds the signing person or entity to the content of the electronic document. Florida identified some specific standards that ensure that the digital signatures possess the all-important quality of non-repudiation. The California Pedigree Law does not, itself, specify any standards for digital signatures, but the Board of Pharmacy’s Q&A (see their Q72) calls out the fact that the California Code of Regulations identifies the specific characteristics that must result from a compliant digital signature architecture for electronic documents. The digital signature standards that are compliant in Florida would also be compliant in California.The fact that California included the use of digital signatures is significant because it ensures that each pedigree can stand on its own as a self-contained, self-secure package. This maximizes the value of the entire pedigree architecture because the security mechanism that prevents tampering goes with the package itself. No one has to rely on the access security of a given server or group of servers to prevent tampering. And, if tampering does occur, it can be easily detected, unlike tampering of pedigree approaches that rely solely on server access security. In that case, if server security is breached, you can’t tell which pedigrees were modified and which were not, rendering them all suspicious.
  • It distributes responsibility for monitoring supply chain security to all supply chain participants
    This is the one genius concept of the Florida Law and California retained it, thus qualifying those involved for genius status as well. It’s a regulatory approach that is relatively new but is likely to become much more common in the face of perpetual budget “crises” in state and federal government agencies. Instead of requiring trading partners to simply keep records of their own buying and selling history for each drug so that they can be audited by an inspector at some later date, these laws require them to check the validity of the full pedigree at the time of each purchase transaction, in near real-time.Notice the difference. In the first instance, it is up to the State Board of Pharmacy inspector to detect suspicious activity in the supply chain. But how often will a state inspector visit, and how many records will they be able to review? It’s inconceivable that this approach would result in the detection of illegitimate activity.But when every purchase of a drug as it passes down the supply chain requires the buyer to run a validity check on the full transaction history of that specific bottle, it greatly increases the odds that most suspicious transactions will be detected. And for most suspicious events in the history there will normally be multiple opportunities for detection. Here, digital signatures are the enabling technology. They allow all of this supply chain monitoring activity to occur reliably and automatically inside computers that are distributed throughout the supply chain, without human intervention and without slowing the movement of drugs.

So did California succeed in creating a better law than Florida? I propose that there is almost no comparison so the question may be moot. The California Pedigree Law is so much more far-reaching than the one in Florida. While Florida focused on disrupting some very troublesome practices being performed by a few nefarious licensed and unlicensed wholesalers, California’s law is designed to cause a major reorientation of the pharmaceutical supply chain approach to security, monitoring and policing (see also The Deputized Supply Chain). This has major implications that go well beyond those of the Florida law.

Faced with that, it is not surprising that it was necessary to push out the effective dates to 2015-2017. Transformation this big takes time to implement.

Digital Signatures

Digital signatures are commonly mis-understood, but they play an important role in securing the pharmaceutical supply chain. The Florida pedigree regulations allow the use of digital signatures on electronic pedigrees so that they can be “self-authenticated”. That is, so the pedigree can be authenticated on receipt without employing methods that require some kind of communication with each upstream owner of the drug—like phone calls, faxes, emails, etc.

Digital signatures employed in pedigrees can self-authenticate without any kind of communication. This can be a huge timesaver because it can fully automate the detection of improper supply chain behavior. Large volumes of “clean” pedigrees can be processed without human review or intervention with only those that have a problem being presented to a user for manual review and handling.

It’s not necessary to understand the technical details, but understanding some of the non-technical characteristics of digital signature technology is important for those in the pharmaceutical supply chain. Florida encoded the use of FIPS (Federal Information Processing Standards) digital signature standards directly into their regulations. California seems poised to do something similar.

I want to explain digital signatures without getting too technical. That’s hard to do, but here’s a common misconception that is easy to dispel. The term “digital signature” does not mean something that looks like this:

This is a scanned image of a hand written signature (compliments of a spam/scam email I received this morning). You could call this a “digitized signature”, but it is far from a “digital signature”. The digitized signature may mean something to people when the image is displayed so they can see it, but it means nothing to a computer. Nothing more than a photograph. It’s just a bunch of bits.

A true digital signature is one that a computer can make sense out of. The “sense” it can make is to determine whether the signature is valid or not. For that to work, the digital signature has to be composed of data. Here is an example of a long-form demo digital signature in XML format like those found inside DPMS pedigrees. It includes the core signature as well as the signer’s public key for use in decoding the signature, and a certificate that is digitally signed by a certificate authority who is willing to attest to the signer’s identity.

It looks pretty technical, doesn’t it? It is, but don’t get bogged down in the details. The point is, with this type of data, a computer can verify that a known trusted authority (the certificate authority) is positively willing to attest to the identity of the signer and that the public key included is positively from the signer. The computer can then use the public key to verify that the information being signed (not visible in this example) has not been modified since the signer applied the digital signature. All of this can be determined without the computer needing to go elsewhere for additional information.

Probably the most important thing a digital signature provides is the quality of “non-repudiation”. That is, because the certificate authority has pre-identified the signer in a way that can include the review of legal records, and as long as the signer has kept their private key secret, the signer cannot later claim that they did not sign a set of digital information that bears their digital signature. They cannot disclaim it. The signer is tightly bound to the signed data.

That’s a lot more than your bank can tell from the handwritten signature on your checks. Digital signatures are better in almost all respects.

The FDA, other federal government agencies and most U.S. state governments have embraced the use of digital signatures in digital legal documents. In pedigrees, digital signatures provide strong evidence that the information signed can or cannot be trusted. That’s why they are an obvious choice by regulators who want to move beyond paper pedigrees.

In summary, digital signatures provide the following benefits when used in electronic documents:

  • Positive identification of the signer
  • Non-repudiation of the information that is signed
  • Positive confirmation that the signed information has, or has not been modified since being signed
  • Signature validation can be performed without needing to communicate with external entities

The use of digital signatures in DPMS pedigrees is the feature that turns, what would otherwise be just a blob of data, into a standalone legal document that can be easily validated without needing to acquire any other information. It’s what allows DPMS pedigrees to be used as evidence in court for prosecution of counterfeiters, diverters and thieves.

For a more technical description of digital signatures and the PKI (Public Key Infrastructure) technology behind it, start with the definition in Wikipedia.

Now that I have covered digital signatures in general I can move on to discuss their use in specific pedigree approaches. Stay tuned.

The Legitimate and Illegitimate Supply Chains

There are a number of important misunderstandings out there related to exactly how illegitimate pharmaceuticals get into the hands of unsuspecting consumers and patients. We need to understand all there is to know about the subject, especially those who are responsible for protecting the public against criminal activity and those who are contemplating new laws aimed at elevating the integrity of the supply chain. In this post, I want to define and differentiate the legitimate and the illegitimate pharmaceutical supply chains.

Extracting the meanings we are looking for, Wiktionary defines the adjective “legitimate” as:

  1. Accordant with law or with established legal forms and requirements; lawful
  2. Conforming to known principles, or accepted rules; valid
  3. (obsolete) Authorized; real, genuine

and the adjective “illegitimate” as:

  1. Illegal; against the law

I don’t think there is any surprise here since these words are in fairly common use, but let’s apply these adjectives to the pharmaceutical supply chain. We could deduce:

The Legitimate Pharmaceutical Supply Chain: The chain of pharmaceutical supply that conforms to known and established legal forms, principles and requirements; the lawful supply chain; the valid supply chain; the real, the authorized, the genuine supply chain.

The Illegitimate Pharmaceutical Supply Chain: The illegal supply chain

Again, no surprises here.

We need one more definition: supply chain.

Wikipedia defines “Supply Chain” as:

“A supply chain is the system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. …”

For pharmaceuticals, the supply chain begins with the manufacturer and ends with the consumer, or patient. (For logistical purposes we often talk of our supply chain beginning with the drug manufacturer and ending with the pharmacy, but in actual fact, it ends when the product is irreversibly consumed by the patient.)

We have a single legitimate pharmaceutical supply chain in the United States–filled with complexity, but singular nonetheless. I’ve heard people make the claim that “their [pharma] supply chain is secure”, as if there were many pharma supply chains and it is no concern of theirs if anyone else’s supply chain might not be secure. For security purposes we should treat the U.S. supply chain as a single entity. Martin Luther King famously once wrote, “Injustice anywhere is a threat to justice everywhere”. Similarly, in the pharma supply chain, it could be said that insecurity anywhere is a threat to security everywhere.

Likewise, I believe we have only one significant illegitimate supply chain: the internet. That’s a topic all on its own.

Both the legitimate and the illegitimate supply chains end with the consumer/patient. Interestingly, illegitimate drugs (counterfeit, stolen, diverted, up-labeled, adulterated) can reach the consumer/patient from both the legitimate and the illegitimate supply chains.

Here is perhaps the first surprise in this essay. If we have already separated the legitimate and the illegitimate pharma supply chains, how is it possible for illegitimate drugs to make it into the legitimate supply chain? Wouldn’t they only exist in the illegitimate supply chain?

The answer to the second question is “No”. I selected the adjectives “legitimate” and “illegitimate” for supply chains and for the drugs that pass in them. Just because the adjective is the same doesn’t mean that the subjects are bound to each other.

The answer to the first question is less intuitive. How do illegitimate drugs make it to consumers/patients through the legitimate supply chain? The answer is well documented in Katherine Eban’s book, “Dangerous Doses” already discussed in an earlier post. Look at the case of Timothy Fagan. His parents did not order his Epogen from a website. They bought it (in New York in 2002, prior to the crackdown on criminals in Florida…don’t miss my comments on how much has changed since then) from their favorite national chain pharmacy, a very solid participant in the legitimate pharma supply chain. But the Epogen was “counterfeit” (actually up-labeled and spoiled due to storage at improper temperatures) and Timothy nearly lost his life as the result.

In her book, Eban follows the path of the Epogen from manufacturer to Fagan. It’s a very interesting case. A legitimate drug started out in the legitimate supply chain and it was transformed into an illegitimate drug on its way to the consumer/patient. Did it exit the legitimate supply chain, get transformed by criminals and then get reintroduced, or was the transformation executed by criminals who had infiltrated the legitimate supply chain? The answer depends on whether all of the owners were properly licensed to buy and sell that type of pharmaceutical. If they were, then the drug did not exit the legitimate supply chain. Yes, one or more of the supply chain participants were criminal enterprises, but because they were licensed, they were a legitimate part of the legitimate pharma supply chain at the time.

The point is, individual or groups of criminals can infiltrate the legitimate supply chain at any point (even in big-name companies…read the book!). Once they do, illegitimate drugs can be introduced into the supply chain…easily.

The Florida Pedigree Law

Important 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.What is the fundamental goal of today’s drug pedigree laws? Certainly it has something to do with making it harder for criminals to introduce illegitimate drugs (counterfeit, stolen, diverted, up-labeled, improperly stored, adulterated) into our legitimate drug supply chain. But exactly how they are to accomplish that is sometimes hard to see. Like most of our laws, pedigree laws seem to suffer from design-by-committee and then they are contorted beyond comprehension by lobbyists. If a lobbyist can’t prevent new regulations from being enacted in the first place, the next best thing seems to be to ensure that the law that is passed is so twisted that it doesn’t entirely make sense.

The Florida pedigree law is a case in point. Well intentioned, but apparently designed by people who were not entirely familiar with the massive number of drug packages that pass through distribution centers and on to pharmacies in our modern pharmaceutical supply chain. This law centered around a paper document for every transaction. The proposed law went through many modifications on its way to being enacted, and even then, the legislature continued to modify it as multiple lobbies convinced state senators and representatives of their particular dislike for various requirements. The law that eventually went into effect on July 1, 2006 had a number of strange provisions.

  1. It’s paper-based
    The final law had been modified to allow an electronic representation of a pedigree, but it remained essentially a paper pedigree. Though you could store it and transmit it electronically—they required very secure FIPS standards (Federal Information Processing Standards) for the electronic version—when an inspector wanted to inspect it, the very secure electronic document had to be printed out and presented on paper. A secure electronic pedigree that is printed out onto paper loses all of its security and can be faked very easily.
  2. Pharmacies could return within 7 days without updating the pedigree
    Shortly before the law went into effect, the legislature and governor passed a modification that allows pharmacies to purchase drugs from a wholesaler and then return them to the wholesaler without providing an updated pedigree, as long as both transactions are completed within 7 days. This allows drugs to be re-introduced into the supply chain with pedigrees that legally do not reflect all of the transactions that have occurred, thus hiding potentially important transactions.
  3. Primary wholesaler invoice statement
    Also shortly before the law went into effect a provision was inserted that allowed primary wholesalers to create a “pedigree” by simply printing on their customer’s invoices a statement that asserts that the drugs on the transaction were purchased directly from the manufacturer. Any wholesaler who cannot purchase directly from the manufacturer must purchase their drugs from one of the primary wholesalers. Those drugs must come with a fully documented pedigree that the primary wholesaler created (not the kind with the simple invoice statement). A fully documented pedigree is much harder and much more expensive to generate and maintain.
  4. No manufacturer requirements
    In Florida, the manufacturer of each drug is not involved in the creation and maintenance of drug pedigrees. The first wholesaler to purchase the drugs from the manufacturer must start the pedigree to reflect that purchase. They must then update the pedigree to reflect the sale of the drug to their customer. All of this is necessary whenever the drugs are sold to another wholesaler. If they are sold directly to a pharmacy, the simple invoice statement “pedigree” is sufficient, as described above.
  5. No serialization
    The Florida law requires careful tracing of every package of drugs from first purchase from a manufacturer until distributed to a pharmacy, but without the benefit of a serial number attached to each unit. This is hard to do without costing a lot of time and money because each shipment of a given drug has a different history. It must be traced separately from all other shipments of that same drug. Without serialization, the processes necessary to do it must be performed carefully and exactly. Any mis-step can cause a break in the trace which results in drugs that cannot be sold in the state.
  6. Allows information to be redacted
    Finally, a bizarre late addition allows certain information to be redacted (removed) from a pedigree document if the information is considered sensitive. But when pedigrees are held electronically using the required FIPS standards, any modification will cause the pedigree to be broken. That is, it will appear as though someone has tampered with it—the very condition that would lead a buyer to fear that the drugs may be counterfeit or otherwise illegitimate. The provision that allows redaction is in total conflict with the provision that requires use of FIPS standards.

So with the addition of these strange provisions, what is the Florida pedigree law really accomplishing? I don’t think it is having the effect that was hoped by the original creators. As far as I can tell by reading the original version, it appears that the goal was to force each buyer of drugs to actively verify that the supply chain history shown on each drug pedigree was accurate.

In this way, the responsibility for detection of criminal activity was distributed to all participants in the supply chain, rather than remaining solely with the few inspectors from the Florida Department of Health. This is the one piece of genius in the otherwise flawed law.

Considering the original proposed law and the six strange provisions listed above, a summary of the primary failures of the Florida Pedigree Law would have to include the following:

  • It’s paper-based
  • It doesn’t involve the manufacturer
  • It doesn’t rely on package serial numbers
  • It is full of holes designed to accommodate special interests

I’m afraid this pedigree law is so flawed that it has simply resulted in higher costs with little or no additional protection from criminals; nearly the worst possible outcome. Why have pharma supply chain crimes apparently decreased in Florida since the law was enacted? In my opinion, it’s entirely because the same law greatly increased wholesaler licensing requirements and the penalties for crimes.

With the development of the Florida law as backdrop, California stepped up with the intention of creating a better pedigree law. Were they successful where Florida failed? I’ll discuss their attempt soon.

DISCLAIMER: RxTrace contains some of the personal thoughts, ideas and opinions of Dirk Rodgers. The material contained in RxTrace is not legal advice. Dirk Rodgers is not a lawyer.
The reader must make their own decisions about the accuracy of the opinions expressed in RxTrace. Readers are encouraged to consult their own legal counsel
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the positions of any company, organization or individual other than Dirk Rodgers.

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