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U.S. Department of Health and Human Services

Drugs

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Counterfeit Drugs Task Force February 2004 Update - APPENDIX B: EXPANDED DESCRIPTION OF COMMENTS RECEIVED

TECHNOLOGY

Unit of Use Packaging

Comments supporting widespread utilization of unit of use technology cited:

  • The decreased need for repackaging which is a point of entry for counterfeit drugs;
  • Authentication technologies applied by the manufacturer would reach the dispensing pharmacy and the patient;
  • The lower cost for utilizing unit of use packaging on newly approved drugs;
  • The deterrent value to counterfeiters of the higher costs of duplicating unit of use packages;
  • Improvement in patient safety due to reduction in dispensing errors and better patient compliance; and
  • Increased pharmacist availability for patient counseling (due to reduction in time needed to fill prescriptions).

Some comments cautioned the FDA against mandating unit of use packaging for all drugs citing:

  • The high cost, and length of time, it would take to change production lines from bulk to unit of use packaging;
  • The investment made by many pharmacies in re-packaging and pill counting equipment;
  • The difficulty of packaging certain products (e. g. vaccines, multi-dose liquid formulations) in unit of use form;
  • The need to differentiate repackaging performed under contract to a manufacturer or by a pharmacy (which may achieve market efficiencies) from repackaging by other entities;
  • The need to perform a careful product-by-product cost-benefit analysis on unit of use packaging before creating any requirements;
  • The minimal hurdle that unit of use packaging creates for sophisticated drug counterfeiters;
  • The need to comply with the Consumer Product Safety Commission (CPSC) regulatory requirements for child resistant unit of use packaging;
  • The difficulty some consumers (e.g., arthritic patients) may have in opening unit of use packaging such as some blister packs;
  • The need for pharmacists to modify prescribed quantities to correspond with available unit of use packages which could require changes in state law; and
  • The need to establish standards for such things as size and shape of unit of use packaging in order to minimize patient confusion and address shelf space issues.

Authentication Technologies

They supported use of authentication technologies as part of an overall anti-counterfeiting strategy and stated that authentication technologies serve two purposes:

  • They make it more difficult and expensive to produce a copy of the drug or its packaging and labeling, and
  • They provide a means for determining if a specific drug, package, or label is authentic.

Manufacturers of specific anti-counterfeiting technologies provided us with descriptions of their products that were extremely valuable in helping us understand how they work, their cost, and how they might be incorporated into pharmaceutical products, packaging, and labeling or used to detect counterfeit products through forensic and other analytical methods, including rapid methods.

Many comments supported the issuance of an FDA guidance document on the use of authentication technologies. They stated that there was no clear FDA policy specifically targeted to this important subject. They suggested that current FDA policies and practices for New Drug Applications (NDAs), Abbreviated New Drug Applications (ANDAs), and Biologics License Applications (BLAs), supplements, and other notification procedures should be clarified so the policies and procedures applicable to use of anti-counterfeiting technologies are clearly articulated and available in a single document.

The following points were made regarding the use of authentication technologies on drug products, their packaging and labeling:

  • There is no "silver bullet" solution – all anti-counterfeiting technologies can be defeated;
  • Because all anti-counterfeiting technologies can be defeated, a more extensive approach utilizing layered overt and covert technologies that are changed on a regular basis is frequently required;
  • Authentication technologies are expensive;
  • Manufacturers should determine which authentication technologies to use, on a product specific basis. The FDA should not require the use of any specific anti-counterfeiting technology. For example: the number and type (e.g., overt, covert) of technologies utilized for a given product need to take into account the type of product (e.g., solid, liquid), use, cost, history of counterfeiting etc.;
  • Repackaging destroys anti-counterfeiting technologies employed by the manufacturer;
  • Incorporation of anti-counterfeiting measures into the product, packaging, and labeling may be subject to application and notification requirements which means that initiating or changing such technology could require a significant time and expense;
  • Although all products are at risk for being counterfeited there is a need to develop criteria or a classification system to help identify those products at highest risk for being counterfeited and thereby assist stakeholders in identifying products that might derive a greater benefit from the incorporation of authentication technologies;
  • The large number of available technologies coupled with the number of different products stocked in pharmacies and the need to change anti-counterfeiting measures make it difficult for pharmacists to be knowledgeable about the technologies used for a product at any given time;
  • Technologies that do not allow for "real time" or consumer authentication (e. g., covert technologies known only to the manufacturer and/or the FDA) may have an uncertain benefit in rapid identification of counterfeit drugs.

List of Drugs Likely to be Counterfeited

Many comments stated that it was important for stakeholders to allocate financial resources to protect those products that are most likely to be counterfeited.

There was agreement that the criteria we suggested to identify drugs that were likely to be counterfeited were correct. These included:

  • Impact on public health if the drug were counterfeited;
  • Drugs history of counterfeiting;
  • Drugs price;
  • Drugs volume;
  • Drugs dosage form;
  • Drugs clinical uses; and
  • Whether similar products had a history of being counterfeited.

However, there was no consensus on how to apply these, or other, criteria in creating a list of such products.

As stated above, some comments suggested that instead of developing a list of drugs likely to be counterfeited, a set of criteria for determining whether a drug was at likely to be counterfeited should be created. One proposal for such criteria was:

A drug has been subjected to a seizure or stop sale notice because of counterfeiting, or
There is documentation that a drug was counterfeited and is the subject of an investigation by federal or state authorities
AND
The product is high cost (e.g., over $200 per dose) or high volume (e.g., top fifty drugs), or
The product is used extensively for treatment of HIV/AIDS or cancer, or
The product is injectable, or
The product distributed in a special or limited way, or
There are multiple documented instances of pedigrees not being passed with the product

Radiofrequency Identification Technology

We received a large amount of information on the benefits, costs, and unresolved issues relating to RFID. These include:

Benefits

  • Ability to deter and detect counterfeit drugs;
  • Ability to conduct efficient targeted recalls;
  • Ability to manage inventory;
  • Ability to identify theft;
  • Ability to identify diverted drugs; and
  • Improvement in patient safety by assuring correct dispensing of drugs.

Costs

  • Purchasing hardware (e.g., tags, readers) and software;
  • Integration into legacy information systems;
  • Database creation, security, and maintenance;
  • Integration of RFID technology into existing manufacturing processes, distribution procedures;
  • Compliance with regulatory requirements (e.g., cGMP, notification, product integrity); and
  • Feasibility studies.

Unresolved Issues

  • Need for all stakeholders to embrace the technology in similar timeframes in order to realize the full potential of RFID technology including provision of a universal electronic pedigree;
  • Need to develop standards and business rules;
  • Need to address database issues such as structure (e.g., central vs. distributive), ownership, access, and security;
  • Clarification of regulatory requirements pertaining to use of RFID (e.g., cGMP, electronic records, notification); and
  • Need for a flexible migration path to the use of RFID in order to meet the needs of different stakeholders.

Stakeholder Activities

We have been informed of several feasibility studies, starting in early 2004, that should give members of the supply chain experience using RFID as well as provide them with an opportunity to test its business uses and identify potential barriers to its acceptance. These studies include:

  • Wal-Mart: drug manufacturers and wholesalers will attach RFID tags to all bottles of controlled substances;
  • Accenture: coordinating a study of RFID involving manufacturers, wholesalers, and retailers that will explore the use of RFID for tracking, tracing, recalls and theft of selected pharmaceuticals;
  • CVS: is studying the potential benefits that tagging and tracing pharmaceuticals and prescriptions in a retail pharmacy would have on operating efficiency, quality of patient care, and customer service; and
  • Other feasibility studies using RFID are being planned in Europe to study the use of serialization for authentication at the point of dispensing.

In addition to feasibility studies, we understand that several groups representing many supply chain participants have been meeting to discuss ways to facilitate the adoption of RFID. For example the Product Safety Task Force (PSTF) convened under the auspices of the Healthcare Distribution Management Association (HDMA) is developing business requirements and identifying business issues relating to RFID technology.

The PSTF and other stakeholders have informed us that the migratory path (or phase in) to widespread use of RFID at a package level could vary by stakeholder based on the place of that stakeholder in the supply chain (e.g., manufacturer vs. retailer) and on specific costs and benefits accruing to that stakeholder (e.g., types of products manufactured, number of distribution centers, technology cost per product).

Several migratory paths were mentioned, including:

  • Phasing in use of RFID technology with use at the case and pallet preceding use at the package level;
  • Phasing in use of RFID technology starting with use on pallets, cases, and packages of "high risk" products with gradual inclusion of other products at all levels; and
  • Use of RFID technology at the pallet and case level coupled with use of 2-D Bar Codes at the package level with gradual phase in of RFID technology at the package level.

According to stakeholders, these paths are not mutually exclusive and it is likely all of these, and other, paths will be utilized as RFID technology becomes more widely adopted.


SECURE BUSINESS PRACTICES

Below are some of the secure business practices that have been developed by participants in the U. S. drug distribution system.

Manufacturers

Several manufacturers have announced policies intended to secure the supply chain. These policies include:

  • Limiting sales to authorized wholesalers. Authorized wholesalers are defined either as wholesalers who purchase a manufacturers products exclusively from that manufacturer or as wholesalers who purchase a manufacturers product directly from the manufacturer or from other authorized wholesalers;
  • Making the list of authorized distributors publicly available;
  • Ability to audit the sales records of wholesale distributors;
  • Working with dispensing pharmacies to ensure they are aware of the identities of authorized distributors; and
  • Designation of an individual or team to coordinate security and anti-counterfeiting activities.

Wholesalers

The Healthcare Distribution Management Association (HDMA) released a document entitled "Recommended Guidelines for Pharmaceutical Distribution System Integrity" which set forth a series of recommended actions for wholesalers to take prior to and while conducting business transactions with other wholesalers. In essence they comprise a "due diligence" checklist which includes items such as:

  • Obtaining detailed information about the wholesalers licensure, inspection results, history of disciplinary actions, corporate officers, owners, and management personnel;
  • Performing a criminal background check on the wholesaler, its officers, owners, and other key personnel;
  • Obtaining a credit history and information about its business activities, financial status, and liability insurance;
  • Performing a detailed physical site inspection; and
  • Ensure that the wholesaler is in compliance with federal and state requirements, verifies that the wholesaler is an authorized distributor for the products being transferred or has a process in place for verifying pedigrees.

Individual wholesalers supported the HDMA guidelines and provided FDA with ideas for additional secure business practices including:

  • Not selling pharmaceuticals to other wholesalers at all; and
  • Completely separating the functions of quality assurance and compliance from sales and marketing and requiring quality assurance and compliance staff to perform due diligence on potential business partners.

Pharmacies and Pharmacists

We have been informed that several organizations representing pharmacies and pharmacists are developing secure business practices as a guide for pharmacies and pharmacists. One pharmacy group notified us that they have already published a list of strategies to use for assuring the integrity of pharmaceuticals. This list includes:

  • Staying informed about reports of counterfeit drugs;
  • Contacting wholesalers to get information about the status of their licensure, whether they are authorized distributors, and where they source their drugs;
  • Evaluate pharmacy security;
  • Educate hospital staff;
  • Follow up on patient complaints; and
  • Report suspect products.

PRESCRIPTION DRUG MARKETING ACT (PDMA)

A majority of the comments that discussed PDMA noted the limitations and concerns of full implementation of PDMA. Such limitations include:

  • Paper pedigrees can be forged and counterfeited;
  • Paper pedigrees are logistically difficult to accommodate in the drug distribution system;
  • ADRs are not required to pass pedigree information on to the next purchaser, so subsequent wholesalers are unable to obtain the pedigrees needed to sell their products;
  • The pedigree for a product that circulates several times through the supply chain loses all prior sales history if the drug product is sold to an ADR;
  • The net effect is that secondary wholesalers who cannot obtain pedigrees necessary to legally market drugs could be driven out of business; reducing the number of legitimate distributors in the system, decreasing competition and increasing prices;
  • Manufacturers do not update their lists of ADRs so it is difficult for a wholesaler to obtain ADR status; and
  • Costs of paper pedigrees outweigh the benefits.

A number of other comments, however, supported the use of paper pedigrees for their deterrent value and as a means to verify prior sales through due diligence. Comments noted that even forged pedigree papers provide an additional opportunity to identify counterfeiters and block introduction of counterfeit drugs into the drug supply if wholesalers exercise due diligence by tracing the sales through the pedigree and identifying the place where the forgery occurred. A few comments suggested that FDA should exercise enforcement discretion and not take enforcement action against a wholesaler who fails to provide pedigree information back to the manufacturer as long as the wholesaler provides pedigree information back to the first ADR who received the drug from the manufacturer.

Several comments suggested a risk-based approach to implementation of the PDMA, which focuses on those drugs that are at high-risk of being counterfeited. Many of these comments suggested that high-risk drugs maintain a full pedigree that documents all sales and transactions back to the manufacturer. One comment suggested an interim solution of "one forward, one back" pedigree for high-risk drugs. This system would be analogous to recent bioterrorism legislation for food distributors, whereby participants in the food distribution system maintain only those records necessary to identify immediate previous sources and immediate subsequent recipients of food. However, comments on FDA's food regulations have suggested it will take at least several years to phase in the paper recordkeeping requirements. Moreover, in contrast to drugs, there are no major steps in development now to provide widespread electronic pedigrees for drug products. Finally, as noted throughout the riskiest drug products are the ones for which modern anti-counterfeiting and track-and-trace methods should be implemented soonest.

Most comments supported the development of an electronic pedigree for all drug products in the supply chain and that an electronic pedigree should be considered as a long-term solution to fulfilling the PDMA requirements codified at 21 CFR 203.50. Given the costs of implementing the partial anti-counterfeiting measures included in the PDMA, and the expectation of continued significant progress toward implementation of modern pedigree systems for drugs, more effective modern pedigree systems are likely to be available before it would be possible to phase in and achieve compliance with paper pedigree requirements.

MODEL RULES FOR WHOLESALE DISTRIBUTOR LICENSING

The comments overwhelmingly supported strengthening requirements governing the licensure and oversight of wholesale distributors. Many comments cited the systemic weaknesses in the oversight of the wholesale drug industry, prior to Florida's implementation of licensing reform, that were described in the Florida Grand Jury Report, such as issuing licenses without proper background checks and granting licenses despite one or more felony convictions. The comments also stated that existing inspection and due diligence processes are often insufficient to detect criminal activity. As mentioned above, there was uniform agreement that the penalties for counterfeiting drugs are insufficient to serve as an adequate deterrent.

Many comments supported the concept of tighter requirements generally, while others gave specific suggestions for improvement. Some of the specific suggestions included:

  • Detailed and robust applications that provide greater disclosure of information about the applicant and their prior history;
  • Criminal background checks for applicant and company principals;
  • List of prescription drug-related or fraud- related activities that are "not in the public interest" such that states should deny licenses to persons with criminal records for these activities;
  • Pre-license inspection of wholesale distribution facilities;
  • Periodic and unannounced inspections;
  • National clearinghouse for information on wholesale licensure status, debarments, exclusions, and/or results of criminal background checks;
  • Bonds of up to $100,000;
  • Requiring all wholesalers to transmit pedigree tracing transactions back to the manufacturer for susceptible products;
  • Non-ADRs must pass pedigree with all drugs with transaction information back to an authorized distributor;
  • Amending the definition of ADR to include those on the manufacturers list, have a written agreement currently in effect with the manufacturer, or has a verifiable account with the manufacturer and minimal transactional or volume requirement thresholds from the manufacturer of 5000 sales units within 12 months or 12 purchases (invoices) within 12 months;
  • Requiring authentication of pedigree if there is reason to suspect that the product may be counterfeit, as well as on a random basis;
  • Migrating to electronic pedigree;
  • More aggressive penalties and enforcement on state and national level;
  • Quickly suspending and/or revoking licenses of violators; and
  • Including due diligence requirements for wholesalers to conduct on its suppliers.

Most comments stated that the stricter standards should be uniform across all 50 states so as not to create 50 different sets of criteria and rules for licensing.

Concerns about several provisions in the new Florida and Nevada laws regarding licensing of wholesale distributors were expressed. Some of the comments described implementation and logistical problems that wholesalers have experienced in these states as a result of the new law.

Some comments encouraged FDA to revisit the minimum standards requirements described in 21 CFR Part 205 to create a 'federal floor' for States to meet. The comments were not uniform, however, on whether such a federal floor might enhance or deter state efforts to implement the complete set of NABP recommendations.

COUNTERFEIT ALERT NETWORK FOR INFORMATION DISSEMINATION AND EDUCATION

The agency received many supportive comments about the counterfeit alert network concept. Most of the comments suggested that the agency use existing networks and several comments offered their organizations distribution list or network as a conduit for the counterfeit alert network.

Some comments offered strategic approaches for the development of such a network, including suggested concepts for message delivery. Suggestions include using active notification via "push" email technology, validated and secure systems, easily understood language with clear and unambiguous messages, multiple notification systems, accessible to all stakeholders, no cost for users, timely, visual alert to flag importance, redundant delivery vehicles such as email, fax, direct mail, and phone, and have an embedded link to take user back to FDA or MedWatch website. The comments also suggested that consistency is an important element so there is familiarity in times of emergency situations. The agency was warned not to overuse the counterfeit alert network in order to avoid 'alert fatigue,' which could create indifference or doubt regarding the importance of the messages.

The agency was encouraged to consider public/private partnerships to design communication strategies and facilitate efforts to standardize anti-counterfeit communications and to augment and coordinate communication systems. The comments also said that costs to FDA and private partners should be kept to a minimum.

1The Task Force consists of senior agency staff from the Office of the Commissioner (Office of Policy and Planning, Office of External Affairs, and Office of the Chief Counsel), Office of Regulatory Affairs, the Center for Drug Evaluation and Research, and the Center for Biologics Evaluation and Research.