Medical Device Daily Washington Editor

WASHINGTON - The subject of drug supply chain security has drawn quite a bit of ink in recent months as drugmakers, distributors, hospitals, Congress and the FDA wrestle over the how, when and why of implementing pedigree requirements, systems for tracking where the drug was produced and where it has been and who handled it on its path to the consumer.

The agency is poised to drop its stay of these requirements, which can best be described as systems and documentation for chain-of-custody, and move forward with regulations already in place. And according to the FDA's acting associate commissioner for policy and planning, Randall Luttner, PhD, today's drug industry track-and-trace issues - primarily through the new electronic systems, but also more traditional barcodes - offer insights that makers of devices, diagnostics and combination products may want to heed, especially given the recent spate of device recalls and the concomitant public and congressional concern.

A hearing held yesterday highlighted some of the enforcement activities undertaken by the agency and the office of U.S. Immigration and Customs Enforcement (ICE) at the Department of Homeland Security, agencies which jointly are attempting to crack down on a number of attempts to infiltrate the U.S. supply pipeline with counterfeit drugs.

According to Kevin Delli-Colli, deputy assistant director of financial and trade investigations at ICE, “China and India are the most prolific source countries“ for counterfeit drugs, and the People's Republic of China cooperated in one such investigation involving bogus erectile dysfunction drugs.

Lutter pointed out that the agency's Office of Criminal Investigations (OCI) has nailed several counterfeiting operations, including one in which 16 individuals were indicted in connection with a scheme to divert “more than $200 million in fraudulently obtained pharmaceuticals.“ Lutter added that “[w]hile the U.S. drug supply chain is among the safest in the world,“ the FDA is nonetheless concerned about “increasingly sophisticated threats.“

Pedigree requirements date back to a series of 1992 amendments to the Prescription Drug Marketing Act (PDMA) for which the FDA published final regulations in 1999. An earlier problem - one that helped to push the date of implementation back from 2004 - was a concern that secondary distributors had with language requiring an “ongoing relationship“ between distributors and their suppliers.

Lutter said that secondary wholesalers had argued at the time that “they may not receive pedigree information from their suppliers,“ or primary distributors, “because the PDMA does not require [authorized distributors of record] to provide pedigrees,“ hence leaving secondary distributors with no guarantee that they can obtain the necessary pedigree information from primary distributors.

The FDA assembled a task force in 2003 to evaluate the ongoing state of affairs with an eye toward deciding on reasonable standards and a deadline for implementation. In its 2004 report, the task force disclosed that “adoption across the U.S. drug supply chain was slower than originally anticipated.“

The agency held a two-day meeting this past February to identify the current problems, and while the public input was substantial, the FDA decided it would commence with enforcement of the regulations, albeit with the recognition that it would require a risk-based approach that undergirds so much FDA regulatory work and philosophy.

Lutter described the risk model as focusing on “prescription drug products that are most vulnerable to counterfeiting and diversion,“ allowing “law-abiding secondary wholesalers [to] adjust to the regulations by giving them an idea of where and how to focus their initial resources.“

High levels of demand, price or volume of sales are three of the criteria the agency will use in establishing risk categories and priorities - as well as a history of a company having been the subject of a counterfeit effort - and for new drugs, an assessment as to whether demand, price or volume will spark interest among counterfeiters.

Despite industry misgivings, Lutter added that “with the implementation of the pedigree regulations in December 2006, FDA expects that supply chain stakeholders will move quickly to adopt electronic track-and-trace technology.“

Lutter told Medical Device Daily that while the PDMA addresses drugs only, “[t]here is interest in ensuring the safety of devices, especially for recalls.“

However, he said that the agency's efforts to provide guidance in this area “are still in the early stages.“

In his comments at the hearing, Rep. Gil Gutknecht (R-Minnesota) blasted the delay in implementation, commenting that radio frequency identification (RFID) is widely used in Europe. And, he said, “I don't think that Europeans are inherently smarter than we are.“

He decried what he called inexcusable “footdragging“ by the industry, charging that many in the pharmaceutical and distributor industries “are not particularly interested in doing this.“

However, Lutter pointed out that much of the delay also has to do with the “variety of issues pertaining to standards such as [radio signal] frequency, serialization“ of data and several others.

Despite Gutknecht's pointed comments, John Gray, president and CEO of the Healthcare Distribution Management Association (Arlington, Virginia), insisted that “we have made lightning speed with RFID“ in terms of deployment. While Gray lauded the FDA for “implementing the final rule on Dec. 1, 2006,“ he said that “the current federal criminal penalties . . . are wholly inadequate, given the potential harm.“

He noted that H.R. 5156, a bill presented by Reps. Mike Rogers (R-Michigan) and Gene Green (D-Texas), would boost prison terms for all classes of offenses related to counterfeiting, including life in prison should the counterfeiting result in death.