Future Proofing Track and Trace

The US has finally joined the European Union and other regions in requiring a ‘track and trace’ serialization and traceability system for medicines, with major implementation steps just a few months away. Although the changes are significant and welcome, more must be done to realize the system’s full potential to protect our drug supply against stolen, counterfeit, or diverted goods.

Approved by Congress last year, the Drug Quality and Security Act (DQSA) requires manufacturers and repackagers to apply unique serial numbers to each carton or vial of prescription drugs sold in the US, allowing trading partners (drug companies, repackagers, wholesalers, and pharmacies) to check the legitimacy of any individual package. In addition, all stakeholders involved in drug distribution are to establish interoperable data exchange systems to share information on product movement that permits a reverse look-up of a drug’s chain of custody.

But the statutory requirements for the use of these new tools will not tap into their full potential. The FDA should recommend – and the industry should support – the creation of a system that allows trading partners to go beyond mere baseline requirements.

Serial number verification is a clear example of how the letter of the law falls short. Assigning a unique serial number to each drug package could potentially create a proactive screen for counterfeit or diverted products. In Turkey, for instance, where drugs have been serialized for several years, every pharmacy must verify a drug’s unique serial number before it is dispensed to the patient. DQSA doesn’t require any entity in the supply chain to routinely or proactively verify serial numbers, except for drugs that have been returned to a wholesaler or manufacturer and are intended for resale. It is only when a company believes that a product may be suspicious that the serial number must be checked. Because counterfeit drugs can be expertly crafted and packaged, reliance on human screening defeats the main purpose of serial numbers: discovering bad products that a human might miss.

The threat of counterfeit drugs has been seen over and over in the US, placing patients at risk. A counterfeit version of somatotropin – a human growth hormone used to treat AIDS-related wasting – was found in at least seven states in 2001 and passed through multiple wholesalers. In 2002, falsified bottles of high-dose erythropoietin (a costly injectable drug to treat anemia) were actually low-concentration products that were relabeled at a higher strength and sold to wholesalers and pharmacies. And as recently as 2013, counterfeit versions of the cancer drug bevacizumab that contained no active ingredient were distributed in the US.

DQSA could also be improved by deactivating the serial number after a drug is dispensed. If serial numbers for dispensed or expired drugs remain active, nothing prevents criminals from reusing those numbers to market their drugs as legitimate. A single serial number might appear on hundreds of boxes and pass repeated verification checks. Post-consumer ‘recycling’ of dispensed drugs is common and can be exploited by criminals. In 2012, the US attorney for southern New York uncovered a large-scale drug diversion and relabeling scheme that cost the state Medicaid program more than $500 million. Under the scheme, ‘collectors’ purchased the drugs from patients and sold the medicines back into distribution through pharmaceutical wholesalers. Unsuspecting consumers who received these previously dispensed drugs may have been exposed to expired or contaminated medicines. This and similar schemes in other states can be prevented through verification of the package serial number, but only if serial numbers are decommissioned after use…

Finally, although DQSA requires interoperable systems capable of checking a drug’s transaction history, it fails to specify details. A system that permits automatic verification of each transaction between trading partners could flag products offered for sale that do not have verifiable transaction histories. This type of automated checking would help buyers to avoid purchasing illegitimate products, thus protecting both businesses and patients.

The most effective way to detect compromised medicines in the supply chain is to build an enhanced drug distribution security system that takes full advantage of the new tools created by the DQSA. To achieve this goal, both the FDA and industry have a role to play, as do other agencies and, potentially, third-party payers. The FDA is responsible for developing guidance, coordinating pilot programs, and holding public meetings to implement the law, all of which are meant to ensure that the new tools are used in an optimal way. Meanwhile, affected stakeholders, including drug manufacturers, distributors, and pharmacies, must engage with the FDA and with one another to make sure that systems and protocols are feasible and support the deeper functions described above. The Medicare program or other insurers could also require verification of serial numbers, particularly for high-risk products, that are independent of the requirements of DQSA.

The time to begin this collaborative work is now. Although the US serialization and traceability system will not be fully implemented for several years, the process has already begun in earnest. Stakeholders are already investing resources and working hard to comply with first-phase requirements. Industry and FDA should work together to build a system that reaches its full potential to protect consumers and companies from the health risks and enormous economic toll of counterfeit and contaminated products.