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Drug Makers Want to Extend Deadline for Drug Tracking

A decision that could delay safeguards for prescription drugs in California is approaching, causing a divide between those who say immediate action is needed to protect patients and drug companies that say a system is not yet ready for implementation.

The state Board of Pharmacy, which gathered public comments locally in January, will consider delaying a requirement that prescription drug makers, packagers, wholesalers and pharmacists use an electronic tracking system capable of tracking drugs from manufacturer to consumer.

Currently, those involved in the supply chain , from manufacturer to distributor to pharmacy , will have to provide documentation, or an electronic pedigree, for every prescription drug that moves through the state beginning Jan. 1, 2009.

The state Legislature enacted a law sponsored by the pharmacy board in 2004 requiring the changes by 2007, but extended the deadline to 2009 after drug makers and others expressed concerns about meeting the earlier deadline.

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The regulations are part of an effort to protect state residents from ingesting counterfeit, damaged, adulterated or misbranded products.

“We see this as our principal initiative this year. We will continue to work with the industry to get them to comply,” said Virginia Herold, executive officer of the pharmacy board.

She said the agency grapples with balancing the need for consumer protection with a safe and secure drug supply. The board could decide as early as April, though Herold said it could also postpone a decision until later this year.


Pushing Deadline

Lobbying groups for pharmaceutical, biotechnology and pharmacy industries are pushing to extend the deadline to 2011, contending that they require more time to put systems in place. Most have been testing radio frequency identification, known as RFID, and two-dimensional bar coding technologies.

But large biotech and pharmaceutical companies cited the complexities involved in getting compliance from third-party contract manufacturers, which are scattered throughout the country. Smaller drug companies said compliance would require expensive authentication equipment, placing financial burdens on their small operations.

About 50 drug companies and related agencies sent letters to the state board updating their progress on complying with the Jan. 1, 2009, deadline. All but two said they would need more time to meet the deadline.

EMD Serono Inc. estimated that it will spend an initial $2.2 million in packaging and serialization costs to implement changes. Johnson & Johnson estimated that it would cost the company more than $100 million to fully comply. Others, such as Biogen Idec, stressed their companies had just reached the planning stages and wouldn’t be ready by Jan. 1.

“The problem of adulterated products getting into the supply chain is a very serious one,” said Robert Hamm, Biogen Idec’s executive vice president of pharmaceutical operations and technology, in an e-mail. “We want to ensure that there is time to put the proper systems in place before implementing this initiative so patients don’t face any delays or disruptions in getting their medications.”

Jim Dahl, a former assistant director of the FDA’s Office of Criminal Investigations who has testified before Congress as an expert witness on drug counterfeiting, said he supports keeping the deadline intact because immediate implementation would benefit consumers and keep fake drugs from entering the marketplace.


Illegal Sale

One common scheme, he said, involves the illegal sale of prescription drugs to hospitals and nursing homes at a steep discount off wholesale prices. Others have taken advantage of supply shortages.

Last year, a man identified as Mahmoud Abu Arqoub was convicted in the U.S. District Court in New Jersey for smuggling, mail fraud, misbranding and selling unapproved drugs without a license. Arqoub offered to sell a New Jersey hospital 20,000 doses of the flu vaccine Vaxigrip for $65 a unit during a time when the flu vaccine was in short supply. The average wholesale price of a common flu vaccine was about $7 a unit at the time.

“It’s lying, cheating and stealing and using interstate commerce to figure that in,” Dahl said.

Dahl commended the board’s efforts in encouraging companies to comply with electronic tracking, but said more aggressive measures would take time.

“The biggest problem with implementation of the California law is that they also require serialization,” he said.

Individualizing products by serial number requires costly authentication equipment, said Dahl. He broached the idea of keeping the electronic pedigree system deadline in place for 2009 but delaying the use of serial numbers until 2011.

Dahl said the Internet also poses unique challenges in tracking counterfeit drugs. Often, Internet schemes involve drugs trading hands multiple times worldwide.

“The Internet is the wild, wild West,” Dahl said. “There are only a handful of domestic Internet pharmacies that are legitimate.”

San Diego’s proximity to the U.S.-Mexico border also poses a significant problem because regulations are rarely enforced in Mexico, he said.

Motorola Inc. and BA Systems have been testing a system capable of reading all RFID tag frequencies and capturing data without the need for special computing devices.

Others have studied holograms, color-shifting dyes and numerous other anti-counterfeiting technologies.

Bryan Liang, a law professor and executive director of the Institute of Health Law Studies at California Western School of Law and program director for the San Diego Center for Patient Safety at UC San Diego, said he’s looking forward to seeing more advanced drug tracking technologies.

“We need efforts to track the drug, not the cardboard,” he said.

Liang added that even if tracking systems were 99 percent accurate, the remaining 1 percent would leave a worrisome amount of drugs in question.

“Technology has a huge advantage; it allows us to track it if it works right,” he said. “If it doesn’t work right and we don’t have operability from one person to another, we’re going to have a problem.”

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