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U.S. Department of Health and Human Services

Drugs

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Counterfeit Drug Task Force Report 2006 Section IV: What is the status of electronic track and trace across the drug supply chain?

A. What is the progress of the use of e-pedigree in the drug supply chain?

Issue/Background

In the 2004 Task Force Report, we said that adoption and widespread use of reliable track and trace technology is feasible by 2007. We stated that this would help secure the integrity of the supply chain by providing an accurate drug "e-pedigree," an electronic record documenting that the drug was manufactured and distributed under secure conditions. We particularly advocated for the implementation of electronic track and trace mechanisms and noted that RFID is the most promising technology to meet this need.

In our 2006 fact-finding effort, we sought comment on the progress of e-pedigree implementation in the drug supply chain to determine if the goals outlined in the 2004 Task Force Report would be met.

What We Heard

Several comments described completed and ongoing pilot programs for e-pedigree and their successful deployment of e-pedigree in a real-time production environment. Most pilot programs involved distribution with one manufacturer, one wholesaler, and, in some cases, one pharmacy. Many comments stated that e-pedigree can be achieved using either RFID or barcodes. A number of comments stated that standards for e-pedigree are complete and that interoperable software is available. A few comments from manufacturers of already-serialized products said that they have developed track and trace systems capable of providing an e-pedigree through existing internet technologies.

Most comments agreed that it was necessary to adopt mass serialization with unique identifiers on each package as an important step to facilitate e-pedigree, while some comments stated that it is not needed. A majority of the comments stated that although widespread use of e-pedigree is not far off, it is hard to predict when that might happen or set a new timetable or a new target date. However, many comments suggested that FDA set a specific date by which all products must have an e-pedigree, arguing that without a specific date progress toward adoption will continue to be slow. Some comments recommended that FDA establish realistic phased-in compliance dates for adoption of e-pedigree.

Discussion

In 2004, we were optimistic that widespread implementation of e-pedigree was feasible by 2007 because we were told by many stakeholders in the drug supply chain that this was a realistic goal. Although significant progress has been made to set the stage for widespread use of e-pedigree, unfortunately, this goal most likely will not be met. We will not issue a new forecast or target date for adoption of e-pedigree because we do not have enough information to do so at this time. Most comments said that it is difficult to predict or designate a target date. We do believe that a timetable with achievable, realistic milestones is crucial to keep e-pedigree implementation on track. Therefore, we recommend that FDA continue to work with members of the drug supply chain to develop such a timetable.

We believe that members of the drug supply chain should be able to implement e-pedigrees in the very near future. We applaud those members who already are taking steps to implement an e-pedigree and States that have championed this cause, such as California. However, it is clear from our recent fact-finding efforts that the voluntary approach that we advocated in the 2004 Task Force Report did not provide industry with enough incentives to meet FDA's deadline. The mere "risk" of the PDMA regulations being implemented was not enough of an incentive. When PDMA was enacted, the state of technology was not as advanced as it is today, and, as a practical matter the industry could pass only paper pedigrees.

We understand the complexity in moving toward an e-pedigree and recognize that a hybrid approach using both paper and electronic pedigrees will be needed during a transition period. We continue to believe that RFID is the most promising technology for electronic track and trace across the drug supply chain. However, we recognize that the goals can also be achieved by using other technologies, such as 2D-barcodes. Based on what we have recently heard, we are optimistic that this hybrid environment of electronic/paper and the use of RFID/bar code is achievable in the very near future. We believe that efforts to ensure that hybrid pedigrees are secure and verifiable should be a priority consideration.

If legislation is considered in Congress related to e-pedigrees, we stand ready to provide technical assistance.

Recommendation: 

  • We recommend that stakeholders work cooperatively to continue to expeditiously implement widespread use of electronic pedigrees across the drug supply chain.
  • We recommend that FDA provide technical assistance if legislation related to electronic pedigrees is considered in Congress.

 

B. What is the progress of the use of RFID on drug product packages?

Issue/Background

We sought comment on the implementation status of RFID, including a description of the obstacles to widespread adoption, an estimate of the timetable, the suggested role of FDA, and the incentives needed to promote adoption.

What We Heard

A majority of the comments agreed that RFID is the most promising technology for track and trace in the drug supply chain. We received many comments describing current obstacles to wider adoption of RFID, including:

  • A lack of standards (for e-pedigree fields and format, data systems, international transmission standards, and hardware specifications);
  • Privacy concerns;
  • Concerns about the ownership of confidential business transaction data;
  • Challenges in serializing all products;
  • Concerns over the accuracy and speed of electronic devices and systems; and
  • A lack of definitive data to determine how RFID will affect sensitive products (e.g., liquids, biologics).

Many comments stated that it is not possible to predict or estimate a timetable for widespread adoption of RFID, or stated that widespread RFID adoption is at least many years away. Some comments estimated that it will take up to 10 years. Many comments suggested that technical issues (e.g., adoption of standards, product/software development) would need to be settled before a more accurate timetable could be estimated. A number of comments suggested a phased-in approach for RFID adoption to provide industry sufficient time to explore all options. One comment from a stakeholder closely involved in the development of RFID technology stated that the FDA timeline for RFID adoption is technically feasible, that is, widespread adoption of RFID is feasible by 2007.

Comments noted that progress toward the full adoption of RFID technology is occurring, but that adoption is moving more slowly than previously anticipated. Several pilot projects have been conducted or are underway to test the feasibility of RFID deployment along the prescription drug supply chain, but data is limited.

Most comments said that FDA should not mandate or require the use of RFID in the drug supply chain. Instead, some comments said that FDA should continue to encourage the use of RFID. Many comments said that FDA should actively participate in, support, and facilitate RFID activities, especially those activities of groups working to establish RFID standards and implementation. In addition, many comments said that FDA should take a lead role in developing a public education program about the use of RFID technology on drug products.

Most comments said that incentives would help in the adoption of RFID across the supply chain. Only one comment said that no incentives are needed. Comments suggested the following incentives:

  • Financial/tax incentives;
  • Mandating mass serialization on drug products, but allowing industry to determine the most appropriate technology to ensure compliance;
  • Statutory changes.

Discussion

We continue to believe that RFID is the most promising technology for implementing electronic track and trace in the drug supply chain and that stakeholders should move quickly to implement this technology. We appreciate the candid views and concerns that were shared with us during this fact-finding effort in identifying obstacles to implementation. Within this report, we have tried to address the issues related to those obstacles that are within FDA's purview.

Although we are encouraged by the efforts of GlaxoSmithKline, Pfizer, and PurduePharma in tagging their products, and the efforts of many other companies and wholesalers in exploring and piloting RFID, we are disappointed with the lack of overall progress across the drug supply chain. In the 2004 Task Force Report, we laid out milestones and goals for RFID implementation based on credible information that stakeholders gave us. Many of these milestones have not been met. The technology vendors uniformly told us that their RFID and e-pedigree solutions and technologies are ready to go, but manufacturers, wholesalers, and retailers are slow to implement them.

We recognize that progress may have been delayed because standards have not yet been established. However, we are encouraged by the progress that industry has made to develop and adopt universal standards. Based on what we heard, those standards are close to completion. Once completed, we would expect to see a rapid growth in the implementation of RFID in the drug supply chain. We look forward to continuing to participate and support this standards development process.

In November 2004, FDA issued a CPG for conducting pilot studies for RFID tagging. In that CPG, FDA excluded biological products as eligible for these pilot studies because we had insufficient information about the impact of radio-frequency (RF) on biologics. To date, we have not received sufficient information to change this policy. Therefore, the CPG continues to remain in effect as written until December 31, 2007. In order to further our understanding of the impact of RF, we have begun our own study to evaluate the potential impact of RFID on drug and biological products. We expect to share the results of this study later this year.

We recognize that implementing an RFID-enabled drug supply chain is challenging. We appreciate the comments advocating a phased-in approach and urge manufacturers to take a risk-based approach to implementation by first tagging the products that are most vulnerable to counterfeiting and diversion, based on factors such as the sales price, volume sold, demand, ease of counterfeiting, and prior history of counterfeiting or diversion, among other things. If a company's products are not "at risk", then we would suggest the company choose its highest volume/highest sale drug(s) and start piloting. Although RFID deployment does have significant start up costs, based on our discussions and what we heard, most stakeholders agree that there are also significant benefits. Not only does the track and trace capability of RFID provide anti-counterfeiting and supply chain security benefits, but it also offers significant savings in the form of better inventory management, reduction in theft and product loss, improved recall efficiency, and reduced paperwork burdens.

RFID also has tremendous potential benefits for drug products used in public health emergencies, such as a pandemic influenza or a bioterrorist attack. RFID tracking could help in expeditious deployment and redeployment of medical countermeasures in times of crisis. FDA should, therefore, encourage manufacturers of these types of products to explore the use of RFID.

We agree with the comments that FDA should not mandate RFID. Although in 2004, we sought voluntary adoption and more widespread use by 2007, we believe that the private sector momentum is moving and that our input on some of the perceived obstacles may jumpstart further adoption interest and momentum. In the 2004 Task Force Report, we laid out a timetable for mass serialization and RFID implementation, as well as steps for businesses and standard-setting issues. Although the timetable goals were not met, we continue to stand by this approach and are prepared to work with stakeholders who wish to take the lead in developing a new, feasible, yet ambitious, timetable.

Recommendation: 

  • We recommend that stakeholders continue moving forward in implementing RFID across the drug supply chain.
  • We recommend that stakeholders consider a phased-in approach, placing RFID tags on products most vulnerable to counterfeiting and diversion as a first step.
  • We recommend that FDA remain committed to facilitating RFID implementation and working with stakeholders, standards organizations, and others.
  • We recommend that FDA work quickly to complete its RFID Impact Study examining drugs and biologics, and publicly share the results.
  • We recommend that stakeholders explore the use of RFID for tracking medical countermeasures.