Healthcare Business News

Guarding the Rx supply chain and other letters

By Modern Healthcare
Posted: June 29, 2013 - 12:01 am ET

Guarding the Rx supply chain

I sincerely appreciated your editorial (“Unnecessary compromise,”). The article thoroughly outlined the underlying points and background of the developing pharmaceutical supply chain security discussion. The article mentions the Pharmaceutical Distribution Security Alliance (PDSA) and its support of federal legislation, especially the pre-emption of state bills, California SB 1307 particularly, which require tracking of units through the supply chain. While their objection is represented as seeking common standards instead of a patchwork of state regulations, it is the item-level track in supply chain, which is absent in federal legislation, that provides the greatest challenge and the loudest objections. I've been involved in evaluating the developing legislation in Congress since early last year (H.R 1919 and S. 957). I was one of the seven industry panelists that addressed the House Energy and Commerce Committee on April 25. While all of the witnesses were in support of improving pharmaceutical supply-chain security, not all saw the merit in item-level tracking for containers in transit from manufacturer through the pharmacy. Based upon the opening statements from the lawmakers and their follow-up questions to testimony, one would have concluded that they were of a like mind and that we were heading toward a more robust law consistent at least with the California legislation already on the books. Sadly, the revised bill was weak and in no way represented the comments we heard on the 25th. It is shocking that public safety has taken a backseat to politics. We have continually noted to legislators that tracking units and reading the item-level codes is the most critical part of supply chain security, in particular the read at the point of dispense in pharmacy, not simply at receipt. There are too many documented instances of pharmacy-introduced counterfeits, diverted product (Internet product), dispense of returned product and even dispense of outdated product. Only when we check at dispense will these events be prevented. While it is unlikely this current legislation will include the scan at point of dispense, there may be another path to achieve this level of security. We've been promoting the concept that insurers (pharmacy benefit managers, healthcare providers, the CMS, etc.) could and should require the standardized numeric identifier (SNIs) for reimbursement of prescriptions. By requiring this number and verifying it against an industry-managed database, we will thwart bad actors in pharmacy who may introduce counterfeit or substandard products. Prescription fraud was a key driver for the introduction of serialized pharmaceutical containers in several European countries. While the current Senate bill does establish serialization as an early step, which is commendable, it fails to require active checking of that serial number in transit as recommended by the Food and Drug Administration, and, most critically, at dispense in pharmacy. This will relegate the SNI to being a tool for investigating why a problem occurred instead of preventing the introduction of counterfeit and substandard drugs. That this legislation seems to ignore the recommendation of the FDA, the very entity charged with safeguarding the pharmaceutical supply chain, is troubling to say the least. The bill ultimately fails to complete supply chain security, which would end with the scan in pharmacy at dispense. The pieces are here but they are not being used in concert to achieve the goal of a safe supply chain. Without this last scan, all the work along the way is virtually useless. There have been too many instances where pharmacy introduced counterfeits, grey market product and even dispensed returned/recalled product. The rest of the world is moving steadily toward a serialized supply chain for pharmaceuticals. As China, India, Turkey, Brazil, Argentina and numerous others tighten security and we continue to languish, you have effectively painted a target on the U.S. supply chain making it a haven for global counterfeiters. Without track and trace in transit and most importantly without verification at dispense in pharmacy we lose the benefit of serialization. By failing to track and failing to verify at dispense we've reduced serialization to a tool for forensic analysis of what went wrong. “Why did this bad drug end up being ingested by this patient?”

Walter Berghahn
President, SmartRmeds for Life
Executive director, Healthcare Compliance
Packaging Council, Bon Air, Va.

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No easy fixes

It is disappointing that instead of recognizing that the U.S. is finally moving toward a single, uniform and national pharmaceutical distribution supply chain law, Modern Healthcare instead opted to give credence to the myth that this long-vexing challenge could be solved with an easy fix (“Unnecessary compromise,”). The Pharmaceutical Distribution Security Alliance is a coalition of stakeholders spanning the supply chain, comprising the very stakeholders that will be tasked with ensuring any policy can be implemented. PDSA has supported a step-wise solution to enhance the system and protect patients from counterfeit products and other threats mentioned in the editorial while also laying a foundation that can be expanded over time as additional technologies are developed. As the editorial acknowledged, the absence of a federal solution results in a patchwork quilt of regulations that could make the situation worse for everyone. The pharmaceutical supply chain is a national system that requires a national solution, not a hodgepodge of laws and regulations that could hinder patient access to medicines and provide weak links bad actors can exploit. A significant bipartisan and bicameral group of congressional leaders—including the chairman and ranking member of the Senate HELP Committee, the chairman of the House Energy and Commerce Committee, the previous long-time Democratic chairman of the committee, and multiple Republican and Democratic lawmakers in both chambers—recognize the need for a national solution and have been working tirelessly for months toward this end. Last month, the House passed its proposed bill by an overwhelming voice vote, and the Senate HELP Committee has approved its bill without any objections. This reflects an unprecedented and refreshing level of consensus to create a national system that is long overdue and should be enacted into law now.

Vince Ventimiglia
Principal, FaegreBD Consulting
Adviser to the PDSA

Myriad interpretations

Regarding “The cost will drop”, it was a solid and sound decision. The Supreme Court correctly stated that Myriad did not invent anything, it discovered the genes. I am a free-enterprise believer. However, this was a smudge on the patent process and not too far off from some Internet enterprises that want to sell stock just for their discovery of what people like. Discovering genes and other human parts that occur in a natural process produces revenue by using litigation threats based on exclusivity—not for doing something truly productive. Build something better, create and use the patent process as intended—not revenue by hostage with a false base of pricing. Use the genes to develop a process that no one else can do, or has done—and that process has more validity. I have no sympathy for the investors who did not do enough homework to see the flaw in the valuation process.

Dennis Gerber
Physicians Health Advantage
St. Augustine, Fla.

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