Healthcare Matters

For all the right reasons, security issues with the global pharmaceutical supply chain continue to get a lot of attention. Here at Healthcare Matters, we have posted general information about various illegal schemes used by criminals and specific stories involving counterfeiting –like the recent problem with Avastin.  So it is with some surprise that a proposed new law calling for the FDA and healthcare companies to collaboratively build a U.S. system for tracking and tracing the drug supply may go down in flames based on stall tactics being used by the same industry players that stand to benefit.

The FDA has been working on a “track and trace” system for nearly a decade, and has until September to introduce it as part of its funding laws, or wait another five years for the opportunity under Congressional rules. FDA Commissioner Margaret Hamburg wrote on the agency’s blog earlier this month. “We … need authority to require a robust system to track and trace all drugs throughout the supply chain.”

The delays are not just a function of the FDA being slow to the draw. There has been ongoing and significant resistance from big pharma, major distributors and pharmacies. Is it really just about the cost –that users of the proposed solution (who would be expected to pay for it) would rather endure the losses and work to add security measures independently than to do something more comprehensive with the FDA?  Well, add-in some liability limits and yep, that pretty much sums it up.

In California, the battle over how best to track drugs has already been fought and decided. California legislators passed their own law for a track and trace system in 2004. But healthcare companies were able to delay its implementation three times, and it is now scheduled to begin in 2015. Here’s the rub: In California, the drug companies, distributors and pharmacy owners made their case against the law suggesting that it would lead other states to enact similar measures, resulting in a patchwork of laws rather than a comprehensive plan coordinated at the federal level. But now, and ironically, those same coalition interests will likely succeed in killing the federal plan that they said they would prefer.

The industry wants a “lot level” solution. They have put forth a plan to put unique serial numbers on individual drug packages, but require scanning drugs in “lots” only when they reach distributors, lumping together a hundred or thousand drug packages each, depending on the manufacturer. Lot numbers already appear on drug packages, so the entire system could be in place by 2020, said Liz Gallenagh, in charge of government affairs at the Healthcare Distribution Management Association (HDMA), a trade group representing distributors like AmerisourceBergen Corp and Cardinal Health Inc. “It’s going to start with lot-level traceability, basically thinking you can’t run before you can walk,” she said.

Liz is probably a fine lawyer, but shouldn’t someone with an up to date technology background be out front? I mean, the FDA and big pharma have been all over this issue for ten years. And Liz is talking about the problem and the solution opportunities in a decade-old context. Where’s a salesman when you need one?

“Distributors and pharmacists telling us they don’t need item-level serialization is like drunk drivers telling us they don’t need breathalyzers,” said Walter Berghahn, who has worked on track and trace issues since 2004 and is the president of SmartRmeds For Life, which focuses on medication adherence. The counter proposal offered up by the industry is regarded by those in the know as so shy of a credible solution that it comes off as disingenuous. The coalition strategy seems meant to preempt the more stringent California law and draw a line in the sand that pays lip service to the issue, but doesn’t solve anything.

• In other words: the industry tried to kill the California plan by saying it needed a more coordinated federal plan. Since the industry’s attempts to kill the California plan failed, it remains focused on killing the federal plan. It proposes watered down alternatives, solutions far less stringent than the California plan, so if the federal plan eventually passes, it will subsume the California version. The industry is playing a game of chess. Nothing resembling a genuine collaboration is going on.

If congressional aides continue to insist on a broad based agreement between the FDA and the industry, nothing is going to get done. And that plays squarely into the industry’s hands. Clearly, there are many of us who believe a government-bred solution would be a disaster by default, and that may be right. That said, the industry’s unwillingness to effectively collaborate with the FDA for almost a decade –to not commit itself to developing a credible solution that leverages the modern technologies that most of them have already independently tested– is going to end up biting them in the end.

—Tom Finn

Editor’s note: The “Getting to We” reference made in the title of this post refers to a series of posts based on a Vested Outsourcing report which breaks down a new collaborative best practice entitled “Getting to We.” Click here for Part I, Part II, Part III and Part IV of this series.