Track and Trace in 2009: How Far Have We Come?

Better to begin now when you have time to learn and test, rather than when faced with a legislative deadline.

Editor's Note: While preparing January PMP News's Track and Trace column for the 5th year in a row, Nosco's Gregg Metcalf realized that the pharmaceutical industry has come full circle. His first few articles focused on anticounterfeiting, and then he shifted to track-and-trace and e-pedigree as retailers and legislators did. Given worldwide increases in counterfeiting, today's focus is again on anticounterfeiting along with serialization without pedigree. Read on for a quick recap of past events and for ideas on building your product-protection strategies for 2010.

By Gregg Metcalf, Nosco Inc.

My first couple of articles focused on anticounterfeiting technologies and what customers were doing to stem the tide of counterfeit product. I wrote about the use of bar codes and anticounterfeiting technologies (color-shifting ink, taggants, and holograms) and how these were used in the supply chain to enhance the security of packaged pharmaceuticals.

My 3rd Track and Trace column included the use of bar codes (primarily 2-D) and RFID as the primary means for tracking and tracing product in the supply chain. This is when we all had started talking about the use of unique identifiers and having the capability with RFID to “write” information to the tag so that it could be “read” downstream by trading partners. Databases would be set up to store this valuable information. Then Walmart had decided to start using RFID as a way to track pharmaceutical products being sent into its distribution centers (DCs). It was decided that Class II drugs would be tagged at the item level and all other pharmaceuticals would be tagged at the case and pallet level to increase the incoming efficiencies at the Walmart DCs. During the Walmart craze, Florida was considering requiring the use of an electronic pedigree with all drug shipments being sent into the state. This really had gotten drug manufacturers’ attention, and we were all trying to figure out how we were going to meet the requirement. Florida finally opted to use paper pedigrees, but then came along the state of California. The CA State Board of Pharmacy (CA BOP) had wanted to implement an electronic pedigree system that would have required all drugs entering the state to have a pedigree that could have tracked the drug from what I called cradle to grave. This electronic pedigree would have started at the drug manufacturer and would have ended with the product being received at the pharmacy. This idea was all well intended, but there would have been a tremendous amount of work to do in order to make the pedigree work. This included choosing the right data carrier (2-D bar code or RFID) and then having the right infrastructure in place to support all of the data that would be transmitted between all the trading partners including who would have access to the data. (I realize I am just glossing over something that a lot of us lived and breathed for the better part of two years, but read my fourth Track and Trace column from January 2009 and you’ll be brought up to speed.)

So here we are, year five. California has been officially delayed until 2015, and it looks like the federal government is not going to step in any time soon and create a national pedigree requirement that trumps the CA date. So you may ask, what is there to talk about?

Plenty! This past year we saw some interesting developments surrounding the prosecution of individuals for counterfeiting both in the United States and overseas. Tougher laws and harsher sentences and fines are being handed out to counterfeiters in order put people out of business. Drug counterfeiting is no longer viewed as a misdemeanor with a slap on the wrist and little to no jail time.

What’s taking place?
In November 2009, FDA purchased fake Tamiflu over the Internet and found that the product contained talc and acetaminophen and no active pharmaceutical ingredient. This is not the first time counterfeit product has been purchased over the Internet. It remains one of the easiest routes counterfeiters have for their products to enter the legitimate supply chain. Even when one illegitimate Web site pharmacy closes, there are several others in line to take its place. Also in November, the European Union (EU) working with police and customs officials confiscated hundreds of thousands of fake pills from 24 countries during a five-day multicountry operation. This was the second time in two years that the EU clamped down on counterfeit products being distributed across Europe. Nonetheless, counterfeiters are not going away any time soon, either in the United States or Europe.

EFPIA has launched a pilot surrounding the use of 2-D bar codes on labels. The project is being run in collaboration with IT services firm Siemens. The pilot involves 25 pharmacies in Stockholm, Sweden, applying the 2-D labels to approximately 110,000 drug products over the next several months. The beauty behind the use of 2-D codes is that every pack of product sold will have a unique serial number associated with the product and that number will be placed into a database and removed once the product is issued by the pharmacy. EFPIA feels that by making counterfeiters go the extra steps in creating numbers vastly increases their work load, making the return on investment less profitable.

FDA’s Office of Criminal Investigations has opened an average of 32 investigations a year over the past 10 years. If you look at the numbers between 2004 and 2008, the number increases to 46 incidents a year. In the past 5 years, we have seen an average increase of 14 investigations per year. This number does not include those incidents that go unreported. If we look at what is taking place both in the United States and Europe, the counterfeiting issue is getting larger and the counterfeiters are looking at various ways to put their product into the legitimate supply chains. The methods for getting the fakes into the supply chain vary from illegitimate Web sites in Eastern Europe and the Far East, to counterfeiters looking at diverting products and reimportation, if it is allowed.

Europe is fighting drug re-importation, while the United States is looking into allowing re-importation as a means of lowering prescription drug costs. While the idea of lower drug costs is attractive, the overall long-term benefit should not be blinded by the assumption of lower prescription prices. In Europe, EFPIA considers reimportation as a potential means for counterfeit product to be introduced into the supply chain.

FDA says development of a program that would allow Americans to obtain safe and effective drugs from other countries would require infrastructure for agency inspection and oversight.

Who’s stepping up?
Five years later, we see several companies stepping up and doing their due diligence to protect their products and the public. These products are not just lifestyle drugs anymore. We are seeing Class II drugs, cancer-fighting drugs, and biopharmaceuticals. Some drug manufacturers are aggressively trying to keep counterfeit product out of their supply chains.

Since California delayed its pedigree and serialization initiative, we have seen an interest in doing serialization without pedigree. Why? Customers feel that adding a unique number to a product gives that product its own license plate that can be traced. This information is being stored internally at the point of manufacture and can be recalled as needed for certain events. An example of an event would be if a product bound for a certain end user is diverted to a unauthorized location or user. This allows the drug manufacturer to look at a specific lot of product versus trying to recall several lots of the same product to determine which lot of product was affected.

So how are companies moving forward? Nosco has been involved in several live applications at the item level that are using RFID [both high-frequency (HF) and ultrahighfrequency (UHF) near-field tags] as well as the use of 2-D bar codes. In January 2010 issue’s Security Packaging Supplement, you will be reading about Cephalon’s RFID initiative to serialize its Class II products using UHF near-field tags that Nosco applies on-line in our folding carton facility. Additionally, we have customers using RFID for inventory management/control for products that are dispensed in hospitals and clinics. The tags are used in conjunction with smart shelf technology that allows the product to remain in a climate-controlled environment; access is controlled by the use of smart cards. This allows for tighter-controlled access of those allowed to enter the smart shelf as well as more reliable inventory count. In addition to inventory benefits, several of our customers are able to do a better job of maintaining their financial transactions, increasing to the speed in which the information is transmitted from the tag to the electronic patient chart.

In addition to RFID tags, we are supplying several customers with 2-D bar codes that are applied to labels and folding cartons for serialization programs in the pharmaceutical and biopharma arena. In addition to domestic programs, Nosco is also supporting several of the European industry driven serialization requirements including the French CIP 13 Data Matrix bar code initiative. If you look at what’s going on in Europe, several of the initiatives ranging from Turkey, Italy, and France are all centered around the use of different bar code technologies ranging from Code 39, EAN 128, EAN 13, and Data Matrix.

Along with the “data carriers,” several of our serialization customers are also incorporating traditional security features onto their packaging. These features include overt and covert features ranging from color-shifting ink (overt) and taggants (covert) to lower-end features that include microprinting and UV features. This is the layered approach that was recommended in the early years of the anticounterfeiting programs.

Now, along with the traditional overt and covert technologies, we see the addition of serialization technology to bolster the layered approach to securing pharmaceutical products. Moving forward, we see customer activity and rollouts increasing even though there are no legislative requirements yet. These manufacturers feel that they have an obligation to consumer and patient regarding safety. They also feel that waiting for some type of regulation or legislation is not in their best interest in the long run since counterfeiters don’t care about legislation. In fact, some counterfeiters are likely hoping that reimportation is allowed, giving them the opportunity to continue adding bogus and sometimes dangerous product into the legitimate supply chain.

We’ll continue to see leaders in the fight against counterfeiting, but the industry may still need that legislative nudge in order to get more drug manufacturers involved.

So, What Should We Be Doing?
To sum things up: No legislation in our near future, several bills and guidelines are under review, reimportation is a real risk, counterfeiting is happening, the Department of Defense requires 2-D bar codes, FDA wants unique medical device identification, California is still hanging out there, global serialization requirements are arriving or emerging, the global active pharmaceutical ingredients supply chain is largely unsupervised, we don’t yet have clear data standards, AND the risk of lowering drug prices looms. (You’ll see below that the Federal and State updates below haven’t changed since we last communicated.)

A great deal to consider!

Although I cannot offer a ‘preparedness recipe,’ our Nosco Team believes now is the time to begin a program, or dust off an old one, to bring these issues front and center within a cross-functional team. If you haven’t already, get advice from suppliers and peer leaders and develop a plan that includes packaging, IT, operations, finance, trading partners, warehousing, and experienced suppliers from multiple areas. Also gain an executive sponsor. This may sound self-serving, but suppliers must have a seat at the table and have a strong working relationship together to understand how each piece of the puzzle fits at the outset: item-level serialization, enterprise software, packaging line technology/communication, and e-pedigree, to name a few.

We suggest this approach to get started: figure out how to secure your supply chain through serialization and anti-counterfeiting technologies and processes, and let’s move forward. Better to begin now when you have time to learn and test, rather than when faced with a legislative deadline.

We wish you all the best in 2010 (isn’t this the year we are supposed to make contact?)

Gregg Metcalf

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