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On May 1, the U.S. Food and Drug Administration issued its latest consumer warning on buying prescription drugs over the Internet. This and other recently publicized counterfeiting incidents highlight the grave risk posed to public health and the reputation and financial well being of companies in the pharmaceutical supply chain.
The pharmaceutical supply chain is complex, with hundreds of manufacturers seeking to distribute millions of products, primarily through wholesale distributors, specialty distributors, repackagers and kitters. These middlemen aggregate and distribute products to more than 150,000 dispensing points, including pharmacies, hospitals, clinics, physician offices, nursing homes and government institutions.
Counterfeiters introduce their wares into the supply chain by presenting themselves as legitimate players in the network (e.g., as a wholesaler or packager), producing or obtaining a volume of fake, relabeled or adulterated product, and creating fictitious purchase and sale transactions. Counterfeiters also profit by diverting medicines from their intended dispensing points to take advantage of price differentials, reselling or "laundering" diverted drugs back into the distribution chain. Layers of transactions produce a murky supply chain, and this lack of transparency creates opportunities for counterfeit and diverted drugs to enter the channel.
Anti-counterfeiting measures must prevent the introduction of counterfeits into supply chain; detect fake drugs within the supply chain before dispensed to patients; and aid in investigating and prosecuting counterfeiters. The federal government and more than half the states have enacted or proposed legislation to protect patient safety, requiring that prescription drug products be tracked throughout the supply chain via a "pedigree."
A pedigree is a certified chain of custody detailing each distribution of a drug, from the manufacturer, through acquisition and sale by any wholesaler or repackager, until final sale to a pharmacy or other person dispensing the drug. A pedigree is an ever-growing chain of custody detailing the path of the drug through the supply chain. A pedigree can be paper or electronic, but industry and governments, such as California, are adopting electronic pedigrees (e-pedigrees) due to their enhanced security and efficiencies.
An e-pedigree includes information about the drug (National Drug Code, lot, dosage, etc.) and its transactions (source, recipient, location, dates and each party certifying delivery or receipt). Once created, the e-pedigree documents subsequent transactions through the supply chain to the point of dispensation. This makes e-pedigree a powerful tool in preventing phony product from entering the supply chain, detecting whether unauthorized product has entered the distribution channel, and tracing counterfeit product back through the supply chain to its source.
Besides improving patient safety, e-pedigree data management systems offer companies the opportunity to realize business value from their compliance investments. Companies are already leveraging the physical product movement data from e-pedigrees to enhance inventory availability, improve shelf-life management, streamline supply chain operations and facilitate more targeted and rapid product recalls. e-Pedigrees are taking hold due to the emergence of industry standards, broadening adoption and demonstrated patient safety benefits. In 2006, more than 200 million drug products were secured with electronic pedigrees. That number will grow dramatically in the years ahead as companies and government turn to e-pedigrees to help protect America's drug supply.
About the Author:
Shabbir Dahod is chairman and CEO of SupplyScape. He has been a leader in the effort to develop industry-wide solutions for the pharmaceutical supply chain's counterfeit drug problem. Dahod has worked closely with pharmaceutical and biotech companies, wholesalers, pharmacies, 3PLs and the MIT Auto-ID Lab on approaches to secure the supply chain and improve patient safety. More information at www.supplyscape.com.
author: By Shabbir Dahod