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Industry is not waiting for action in Washington
One important thing happened in pharma product security this year, and one important thing did not. What did not happen was passage of a federal law on product serialization—it was intensively debated in Congressional committees (even as a spate of counterfeit products were showing up in US doctors’ offices last spring), but proposed legislation fell out of the FDA Safety and Innovation Act when the bill went to the White House for signature.
What did happen was the coming together of what became called the Pharmaceutical Distribution Security Alliance (PDSA), which made a common forum for manufacturers, wholesaler/distributors, retail pharmacy representatives, and a few healthcare-products logistics firms. That was the first time that these disparate business interests made common purpose in addressing pharma supply-chain integrity. They wrote a proposed federal law, the RxTEC Act (which was the bulk of what had been included in the draft FDA Safety and Innovation Act). Historically, one part of the supply chain (usually retail pharmacy) was fighting against other parts in discussing suitable approaches, but with PDSA, there was a consensus, at least in the commercial world.
So why didn’t RxTEC pass? FDA was on record saying that because RxTEC didn’t specify item-level tracking and verification, it didn’t solve the public health problems it’s meant for. The California Board of Pharmacy, whose e-pedigree system is scheduled to go into effect in 2015, would have been preempted by RxTEC, which CBOP was on record opposing as well. Public policy or consumer-advocacy groups generally seemed to think PDSA was trying to pay lip service to enhanced supply chain integrity by way of the easiest means possible; some industry participants told us that RxTEC was, indeed, a “California e-pedigree killer.”
However, as our annual Product Security Report on page 20 shows, there is a dramatically higher level of activity and capital investment by manufacturers in serialization. A considerable number of equipment, software and services vendors to pharma are expanding, developing innovative new technologies, and basically getting ready for an onslaught of business. We think it’s going to happen.
One important driver is that even while the US business and regulatory debate has been stalemated, the rest of the world has moved forward. Even China, home of much of the counterfeiting activity that life sciences suffers globally, is moving ahead—primarily to protect its own citizens. Further to the point, the regulatory framework for tying security to product integrity, such as managing cold-chain processes, is gaining momentum. The federal inaction starts to look like the same political stalemate that is affecting so much of what else goes on in Washington. (Healthcare reform—let’s not go there!) But another driver—and this is the one we like to focus on—is that manufacturers are realizing that there will be business benefits for the industry, and competitive advantage for industry leaders, in going forward. We believe it when we hear industry insiders speak of the concern for patient safety in a loosely protected supply chain. The long-term health of the industry depends on consumers’ trust of the products coming from that industry. Serialization and better supply-chain integrity is happening, and the naysayers are going to be left on the side of the road.