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U.S. Department of Health and Human Services


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Combating Counterfeit Drugs May 2005 Update - Regulatory Oversight and Enforcement

Electronic Pedigree 

In the Report, we said that adoption of electronic track and trace technology would help stakeholders meet and surpass the goals of the Prescription Drug Marketing Act (PDMA). We said that we intend to focus our efforts on facilitating industry adoption of this technology. To allow stakeholders to move toward an electronic pedigree we said that we would further delay the effective date for certain provisions in a final rule that FDA promulgated in December 1999 to implement the Prescription Drug Marketing Act of 1987 (PDMA), as modified by the Prescription Drug Amendments of 1992 (PDA). On February 23, 2004, we published a notice in the Federal Register delaying the effective date until December 2006.

As stated above, we are pleased with the progress stakeholders, standard-setting bodies, and software and hardware companies have made thus far toward implementing an electronic pedigree for drug products. We recognize that there have been, and continue to be, challenges along the way. However, we are optimistic that this progress will continue in an expeditious manner toward meeting our 2007 goal. If it appears that this goal will not be met, we plan to consider the options regarding implementation of the PDMA provisions that are the subject of the stay.

Next Steps: We are closely monitoring the progress of widespread use of electronic pedigrees as we assess whether to lift, maintain, or pursue other options regarding the stay of implementation of the provisions in the PDMA final rule. We will continue to work with stakeholders to facilitate implementation.

State Efforts

In the Report, we recognized the important role that the states have in regulating the drug supply chain, and we stated that adoption and enforcement of strong, proven anti-counterfeiting laws and regulations by the states would help in our collective effort to detect and deter counterfeit drugs. FDA strongly supported the efforts taken by the National Association of Boards of Pharmacy (NABP) in revising the Model Rules for Licensure of Wholesale Distributors for states to adopt. These Model Rules make it difficult for illegitimate wholesalers to become licensed and then to transact business. Four states have laws in place that are similar to the Model Rules ( Florida, Nevada, California, and Indiana), and other states are considering adoption (e.g., New Jersey, Iowa ). FDA has provided advice and input on a few state legislative proposals and we recommend that more states move in this direction in the coming year.

NABP last year also announced the creation the Verified-Accredited Wholesale Distributors™ (VAWD) program as a complement to the Model Rules. Applicants for VAWD accreditation undergo a criteria compliance review, licensure verification, an inspection, background checks, and screening through NABP's clearinghouse. It is intended to provide assurance that the wholesale distribution facility operates legitimately, is validly licensed in good standing, and is employing security and best practices for safely distributing prescription drugs from manufacturers to pharmacies and other institutions. Recently, Indiana was the first state to pass a law that requires VAWD accreditation for all drug wholesale distributors who do business in Indiana.

In the Report, we said that there would be great value in the creation of a national list of drugs most likely to be counterfeited based on factors that are likely to contribute to counterfeiting risk. The Model Rules called for such a national list as a starting point for application of pedigree requirements in the short term so that there would not be 50 different state lists. In December 2004, NABP convened a National Drug Advisory Coalition, which included industry and state and national government representation. FDA has served in an ex-officio role on this Coalition. The Coalition developed criteria for inclusion or removal from such a list and created a national list that includes 31 drugs. FDA applauds NABP on this accomplishment.

We recognize that states have implemented and are considering provisions requiring a pedigree (in some cases electronic) for drug products. We are pleased that these efforts complement federal requirements and believe that rapid and uniform implementation of a pedigree that starts at the point of manufacture and accompanies the drug product until it is dispensed would be beneficial. As stated in the Report, adoption and enforcement of the Model Rules by all states would have the greatest impact on protecting the nation's drug supply.

In the Report, we also said that increased penalties would help deter counterfeiting and more adequately punish those convicted. As we continue the efforts on the Federal level, it is equally important that states adopt stronger penalties (like those outlined in the Model Rules) so the penalties associated with counterfeiting drugs are commensurate to the significant threat they pose to the public health.

Next steps: FDA will continue to support efforts by the states to adopt and enforce stricter laws and to pursue increased Federal penalties for drug counterfeiting.