Legislation setting specific deadlines to implement drug tracking requirements was introduced April 17 by Reps. Steve Buyer, R-Ind., and Jim Matheson, D-Utah.

The legislation, H.R. 5839, would require FDA to develop a numerical identifier system for drugs by March 27, 2010, and also to identify drugs at high risk of counterfeiting or diversion. The identification system must be in use for such drugs 18 months later.

The FDA Amendments Act already directs FDA to collect data and develop standards on technologies to track and trace drugs throughout the supply chain. But the representatives' "Safeguarding America's Pharmaceuticals Act" expands the scope of information gathering and sets a number of implementation deadlines - essentially taking the issue from information gathering and standard setting into practice.

FDA has already begun collecting information on tracing technologies, often dubbed "electronic pedigrees," and experience on both the federal and state levels indicates the challenge of implementing a unified approach (¹ Also see "FDA Begins Review Of E-Pedigree Options Just As California Delays Its Plan" - Pink Sheet, 31 March, 2008., p. 20).

Rep. Buyer has been a long-time proponent on tightening rules aimed at counterfeiting and imported drug products, raising the issue during last year's markup of drug safety legislation (² Also see "Counterfeit Drugs, Food Safety Are Expected Focus Of New FDA Bill In House" - Pink Sheet, 2 July, 2007., p. 7). He and Matheson introduced their measure at the same time as House Energy and Commerce Committee colleagues began circulating a revised draft proposal on drug importing and inspections (see ³ Also see "Foreign Drug Inspections Would Be Funded By Registration Fees In Draft Bill" - Pink Sheet, 21 April, 2008.).

The bill outlines a series of steps. The first is that within 18 months of passage, HHS must submit a report to Congress "evaluating the feasibility and operational efficiencies of adopting the security technologies including barcodes, Radio-Frequency Identification Tags, nanotechnology, or other promising track and trace technology through the prescription drug supply chain," the text of H.R. 5839 states.

HHS would be directed to examine the cost effectiveness and benefits of such technologies as applied to the pallet, case, unit and tablet levels of pharmaceutical inventories, as well as how these technologies enhance the product identification or validation and improve the security of the supply chain.

Developing The Standard Identifier

The next step for HHS would be to develop a standard numerical identifier by March 27, 2010. That same day, the agency is also directed to release the criteria used to determine whether a drug at high risk for counterfeiting or diversion, as well as an initial list of drugs, would be flagged as high risk.

"In developing or updating such list, [HHS] shall consult with the manufacturer of each drug involved, as well as with members of the supply chain and relevant federal enforcement agencies, and, at least one year before including any drug in the list, provide the manufacturer of the drug and members of the supply chain notice of [the agency's] intent to include the drug on the list," the bill says.

If a drug is on the high-risk list, manufacturers would have up to 18 months to apply a standardized numerical identifier that is unique to each unit of the drug, described in the bill as "a package from which the drug may be repackaged or dispensed."

HHS is given flexibility on when it should require that identifiers be placed on drugs not flagged as high risk. Implementation timelines can vary for different types of drugs, as long as they are not high risk.

Implementing The Tracking System

Buyer and Matheson call for regulations to establish "an effective drug identification system through which drug manufacturers, repackagers, wholesale distributors, and dispensers may authenticate the wholesale distribution history of any prescription drug that is subject to a requirement for a standard numerical identifier."

Regulations on this aspect of the bill would be proposed by March 31, 2010, and made final within another year.

The regulations should foster systems that are "electronically accessible and interoperable ... while maintaining the proprietary information of each entity."

The rules must also require the manufacturer or repackager to apply a numerical identifier in at least one standardized form that is electronically readable and the repackager to link electronically within a database the numerical identifier applied to the drug by the repackager to identifiers applied by the manufacturer or previous repackager.

Any person receiving a drug through wholesale distribution would be required to authenticate the transaction history of the drug by "authenticating the numerical identifier with the appropriate database." The procedures must comply with appropriate provisions of the Health Insurance Portability and Accountability Act, which governs health records access and privacy.

The legislation also would require a Government Accountability Act study of how drug dispensers would be affected by the new requirements and how to help them adopt the tracking technologies.

Small Pharmacies To Get Financial Assistance

To help small pharmacies comply with the track and trace requirements, Buyer and Matheson propose a grant program. Grants would be available to independent pharmacies that meet the definition of a small business under the Small Business Act; that is, having annual gross revenues of $6.5 million or less.

Such pharmacies could receive $3 for every $1 they spend on implementing an electronic track and trace system. The bill does not set a total pool of grant funds, but states that the grants would be available for two years after the regulations governing the e-pedigree requirements go into effect.

The federal e-pedigree requirements would supplant state systems.

In addition, the bill would require a licensure program for drug wholesalers.

Mixed Reaction Among Stakeholder Groups

Earlier response from stakeholder groups is mixed, with wholesalers offering general support but drug store chains calling for a different approach than the Buyer/Matheson bill.

Healthcare Distribution Management Association CEO John Gray said his group "shares the belief with Congressmen Buyer and Matheson that electronically tracking and tracing prescription medicines across the supply chain holds the most promise for safety advances. This bill will create the uniformity needed to systematically deploy compatible track and trace technologies."

Gray cautioned, however, that implementing an e-pedigree system is "an ambitious undertaking" and "we will have to work through the challenges and explore track-and-trace technology in a meaningful and coordinated way. HDMA and our member companies are committed to working with our supply chain partners to achieve these goals."

National Association of Chain Drug Stores CEO Steven Anderson said that legislation's requirements "would be extremely complex and costly for retail pharmacies and others in the supply chain, and without the desired benefit."

Rather than "mandate serialization, e-pedigrees or track-and-trace," Anderson said, "NACDS urges Congress to consider several recommendations for enhancing domestic supply chain safety: institute federal requirements for strong uniform state wholesale drug distributor licensure standards; implement an FDA-administered certification program for manufacturers, distributors and pharmacies assuring adherence to secure supply chain practices; require chain of custody pedigrees for distributions by uncertified supply chain entities; and ensure a uniform and strong national safety regime through pre-emption of state laws."

The Pharmaceutical Research and Manufacturers of America has not yet taken a position on the bill.

- Gregory Twachtman (g.twachtman@elsevier.com)

House Bill Requires Standard Numerical Identifiers For Drug Tracking By 2010

More from Archive

More from Pink Sheet