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U.S. Department of Health and Human Services


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Counterfeit Drug Task Force Report 2006 Sections I and II: Introduction and Background


This report is based on the work of the Food and Drug Administration's (FDA or Agency) Counterfeit Drug Task Force.1 It is the third report issued by the Agency since 2004 to address FDA's and the private sector's response to the emerging threat of counterfeit drugs entering the U.S. drug supply. This report contains recommendations to FDA's Acting Commissioner regarding actions that the public and private sector can take to further speed the adoption of electronic track and trace technology and for the use of pedigrees in general, to increase the safety and security of the U.S. drug supply.
After discussing the background and public comment on the issues addressed in this report, we discuss our recommendations or conclusions regarding:

  • The expiration of the stay of 21 CFR §§ 203.3(u) and 203.50;
  • The extent to which electronic track and trace technology is being used across the supply chain for electronic pedigrees and the use of radio-frequency identification (RFID) for drug products in the drug supply chain; and
  • Technical issues related to the implementation of electronic track and trace technology, such as mass serialization, universal and uniform pedigrees, data management, and privacy issues.



A. The Counterfeit Problem

Counterfeit prescription drugs are illegal, generally unsafe, and pose a serious threat to the public health.  Many are visually indistinguishable from authentic drugs. As we stated in our first Counterfeit Drug Task Force report in 2004 (2004 Report),2 we believe that counterfeiting is quite rare within the U.S. drug distribution system because of the extensive scheme of federal and state regulatory oversight and the steps taken by drug manufacturers, distributors, and pharmacies, to prevent counterfeit drugs from entering the system. However, we are concerned that the U.S. drug supply is increasingly vulnerable to a variety of increasingly sophisticated threats. We have witnessed an increase in counterfeiting activities and a more sophisticated ability to introduce finished dosage form counterfeits into legitimate drug distribution channels over the years.


B. The 2004 Counterfeit Drug Task Force Report & 2005 Update

In 2004, the Task Force issued a report outlining a framework for public and private sector actions that could further protect Americans from counterfeit drugs, including implementation of new track and trace technologies to meet and surpass goals of the Prescription Drug Marketing Act (PDMA).3 This framework called for a multi-layer approach to address the problem and included the following measures:

  • Secure the product and packaging
  • Secure the movement of drugs through the supply chain
  • Secure business transactions
  • Ensure appropriate regulatory oversight and enforcement
  • Increase penalties
  • Heighten vigilance and awareness
  • International cooperation

In order to implement these measures, the Task Force Report stated, among other things, that:

  • Widespread use of electronic track and trace technology would help secure the integrity of the drug supply chain by providing an accurate drug "pedigree," which is a record of the chain of custody of the product as it moves through the supply chain from manufacturer to pharmacy;
  • RFID is a promising technology as a means to achieve electronic pedigree (e-pedigree);
  • Widespread adoption and use of electronic track and trace technology would be feasible by 2007; and
  • The effective date of certain regulations related to the implementation of the PDMA should be delayed until December 1, 2006 in order to give stakeholders in the drug supply chain time to focus on implementing widespread use of e-pedigree.

In 2005, the Task Force issued an annual update report (2005 Report)4. The 2005 Report assessed FDA's and industry's progress toward implementing the 2004 recommendations. In the 2005 Report, the Task Force found, among other things, that:

  • Stakeholders had made significant progress in developing and implementing RFID during the previous year;
  • FDA was encouraged by the progress stakeholders, standard-setting bodies, and software and hardware companies had made toward implementing an e-pedigree for drug products and that we were optimistic that progress would continue in an expeditious manner toward meeting FDA's 2007 goal of widespread use of e-pedigree across the drug supply chain;
  • If it appeared that the 2007 goal would not be met, we planned to consider options for implementing the provisions of the PDMA rulemaking that are the subject of the stay; and
  • FDA would identify what we could do to address obstacles to the widespread adoption of RFID.


C. 2006 Fact-finding Efforts: Public Workshop, Vendor Display, and Docket

As the Task Force continued to monitor the adoption and implementation of e-pedigree and electronic track and trace technology, we recognized that adoption across the U.S. drug supply chain was slower than originally anticipated. To determine whether widespread use of e-pedigree by 2007 was still feasible, and to solicit comment on the implementation of certain PDMA-related regulations, we held a public meeting on February 8 and 9, 2006.5 Our objectives for the meeting were to:

  • Identify incentives for, as well as any obstacles to, the widespread adoption of RFID across the U.S. drug supply chain and possible solutions to those obstacles;
  • Solicit comment on the implementation of the pedigree requirements of the PDMA and the use of an e-pedigree; and
  • Learn the state of development of electronic track and trace and e-pedigree technology solutions.

Over 400 people attended the public meeting. Forty-six presentations were made and 27 vendors participated in the vendor display.

Members of the drug supply chain, the technology sector, special interest groups, academia, health professionals, and consumers also filed sixty comments to the public docket that we opened as part of the public workshop.

In addition, we have been attending conferences, meeting with stakeholders, tracking the status of pilot programs, monitoring changes in and use of technologies, participating in standards development, and closely following other influences to remain up-to-date on the relevant issues.

This report is based primarily on information gathered from these fact-finding efforts. It contains our views on outstanding issues related to e-pedigree and RFID implementation, as well as recommendations for additional public and private measures to support our continuing efforts to further secure our nation's drug supply.



 1 The Task Force consists of senior staff from the Office of the Commissioner (Office of Policy and Planning, Office of the Chief Counsel), Office of Regulatory Affairs, the Center for Drug Evaluation and Research, and the Center for Biologics Evaluation and Research.
2The FDA Counterfeit Drug Task Force recommendations are detailed in its report, entitled, "Combating Counterfeit Drugs – A Report of the Food and Drug Administration," February 18, 2004 (2004 Counterfeit Drug Report) (http://www.fda.gov/FDAgov/Drugs/DrugSafety/ucm173231.htm).
3 PDMA (Public Law 100-293) was enacted on April 22, 1988, and was modified by the Prescription Drug Amendments (PDA) (Public Law 102-353, 106 Stat. 941) on August 26, 1992. The PDMA, as modified by the PDA, amended sections 301, 303, 503, and 801 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331, 333, 353, and 381) to, among other things, establish requirements related to the wholesale distribution of prescription drug products.
4Combating Counterfeit Drugs: A Report of the Food and Drug Administration Annual Update , May 18, 2005 (http://www.fda.gov/FDAgov/Drugs/DrugSafety/ucm172935.htm).
5The workshop agenda and meeting transcript are available at http://www.fda.gov/FDAgov/Drugs/DrugSafety/ucm176798.htm