Walt Berghahn's letter to House Energy and Commerce Subcommittee on Supply Chain Security
April 29, 2013
United States House Energy and Commerce Committee
Subcommittee on Health
Hearing on "Securing Our Nation's Prescription Drug Supply Chain"
Testimony of Walter Berghahn, Executive Director
The Healthcare Compliance Packaging Council
Chairman Pitts, Ranking Member Pallone and Committee Members,
I'd like to thank you for allowing the HCPC to present testimony during the "Securing Our Nation's Drug Supply Chain" hearing on April 25, 2013. It was obvious from member questions and dialog that the committee appreciates the critical nature of this issue. Unlike past attempts, beginning with the PDMA in 1987,I get the sense that this committee will follow through and enact meaningful legislation not simply pass it. I would welcome the opportunity to provide information to you or staff about existing pharmaceutical packaging or supply chain processes and technologies that may support your deliberations.
I fully recognize that time limitations prevent more detailed presentations during open session as well it does not allow for supporting commentary. There were a few issues raised in testimony that I felt could benefit from some additional information.
The concern over cost and process burden on small pharmacies from implementation of item level verification
More than once it was expressed in witness testimony and by Committee Members that there is concern about the impact of these changes on the small pharmacy so vital in rural communities. What we did not have time to explore in session is that there exists an easy solution to this problem. There has been discussion about managing the vast amount of data that will be generated in the "cloud". The data form and components are still in discussion as noted by Mike Rose from J&J but I think the broader industry is slowly coming to the conclusion that a cloud based data repository is the most practical path. If this is the path chosen by this committee in legislation then the potential burden of added infrastructure and data management for small pharmacy chains can go away almost entirely.
In California, my understanding of the legislation is that pharmacies would be required to verify codes on individual units and must be able to access records of containers read, not possess the data, access it. Congress certainly has the ability to mandate a solution which will accomplish this point and protect the small chains from economic or process burden while maintaining the integrity of individual product identity.
A cloud based repository means that the burden can be reduced to simply access and this can be accomplished with a smartphone. Now, to be practical, a handheld barcode reader linked to a computer would be better for a variety of reasons but it is not necessary. Verify codes and be able to access records. Burden relieved.
Another consideration on this topic:The distributors offer a wide range of services to the pharmacies, in fact, their level of service to small chains is a competitive differentiator. They help small pharmacies with adoption of new technologies and provide consulting services on a wide variety of topics. It is not improbable to consider that distributors could manage the pedigree data for pharmacies, especially the smaller chains. Larger chains, since they manage their own DC's, would likely manage the pedigrees directly.
In either case, smartphone or internet connected barcode readers could be used by small chains and truly limit their cost and infrastructure burden.
Companies like Hewlett Packard have already launched cloud based platforms for anti-counterfeiting detection in pharmaceuticals and for other high end retail products. This is an existing called GPAS. (Global Product Authentication Service) It is not unique, there are other such services and the committee could easily engage some of these providers to better understand the capabilities.
Is the supporting technology ready ? Barcoding, data management, etc. .
Several witnesses raised this concern. A few of the later witnesses addressed the fact that the technology is functional and already deployed globally.Mike Rose from J&J showed physical samples that were produced on one of their production lines. Scores of US lines are already capable of serialization and aggregation with hundreds more in process of becoming ready.All the major pharmaceutical manufacturers have been developing broad experience in this space thanks to a multitude of other countries requiring item level serialization. The countries were mentioned several times in testimony. Item level serialization is already employed in other equally complex markets from 3PL shipping to credit cards and currently provides the item level visibility and security that the pharmaceutical supply chain will require. This may be the only benefit that 25 years of delay from PDMA has produced. Time for the technologies and infrastructure to evolve.
Timeline to implementation
The pharmaceutical manufacturers are already serializing containers for global markets and they are spooling up to be ready for California's first implementation date of January 1, 2015 for 50% of products and the follow up date in January 2016 for the rest. Please understand that these companies cannot isolate production lines for California. The lines that are and will produce serialized units for California are the same lines that produce products for the rest of the country and in some cases the world which means that their serialization readiness for a country wide rollout is much closer than you might think. This does not mean that they could be ready for serializing all products for the country by January 2016 as CA SB 1307 requires but they will be well on their way. This is why it is so important to maintain California's dates for SB 1307.
The same can be said of the distributors. They are readying themselves right now for California. Theirs' is a more challenging situation since tracking unique items in mass distribution where line of sight bar code readers are used presents certain logistical challenges but they are getting ready none the less. I was told this week of one technology solution being installed at a major distributor designed to capture item level serial codes from products loaded into "totes". These totes are the most common carrier used by the large distributors. The pharmaceutical and distribution industry will be ready for the deadlines in California SB 1307 unless the process is STOPPED by pre-emption of existing state laws. We urge you to allow this process to continue.
Maybe one way to look at this is that California can be America's pilot for a national system. FDA has been actively monitoring and contributing to California's process so it has not been developed without Federal input. Let SB 1307 go as scheduled, learn from it, allow for design modifications and then specify the national requirements. You would then accomplish the phased in approach that many have requested built upon real world experiences.
Beyond supply chain security: the next challenge
Certainly Congress has its' hands full with this current legislation but please consider that solving supply chain security is only step one. My work with the Healthcare Compliance Packaging Council addresses the next step,ensuring patients take medications that have traveled safely through the supply chain.
Medication adherence rates are a dismal 60% in the US depending on which source you accept. This country wastes $290 billion every year because patients fail to take medications properly. That's a mind boggling figure. These costs are well documented in papers from NEHI Thinking Outside the Pillbox: A System-wide Approach to Improving Patient Medication Adherence for Chronic Disease , the IOM report from 2006, Preventing Medication Errors and numerous other sources. You may think supply chain security and patient adherence are separate issues but they are very much connected.
The methods we employ in distribution directly influence current dispense methods. We are the only modern country still clinging to the antiquated process of bulk distribution of pharmaceuticals, that being, distributing in large containers for repackaging in pharmacy to prescription size containers. This practice had a place 100 years ago in the world of the compounding pharmacist. It has no place in our modern world of global manufacturing in state of the art facilities with packaging that has been designed and tested to protect the specific product being carried to market.
Prescription packaging has gone largely unchanged in this country since 1955 when the amber vial was introduced. Every other industry has been constantly evolving. What happened to pharmaceutical packaging in the US? Life saving medicines are primarily distributed in a container that was introduced to the market when Eisenhower was President!
When drugs enter the pharmacy and the manufacturer's container is opened to repack drugs into amber vials we lose the pedigree gone, we lose the serialized ID, we risk product stability as the industry tested container designed to protect the product is gone. If we truly want to end-to-end supply chain security then the patient should receive the original manufacturers container and have the ability, via smart phone or internet, to authenticate that "yes, this container was manufactured by pharm company X and this is a real container".
Some companies like Wal-Mart have taken it a step further offering calendared packaging (think birth control compact) to aid medication adherence. This method accomplishes the goal of pharmacy pass through packaging (whether sourced from the manufacturer or contract packagers) and assists the patient. This style of packaging can reduce labor in pharmacy, reduce dispensing errors, and reduce inventory levels while assisting the patient with medication adherence.
In conclusion: Supply chain security should include the patient.
1: Driving the serialized container through the pharmacy to the patient will virtually eliminate dispensing errors which occur regularly in today's "count, pour, lick and stick" environment (See CVS Tamoxofen in NJ) It will also go a long way toward eliminating prescription fraud if the insurance industry will require the serial ID not simply NDC for reimbursement.
2: Putting an original manufacturer's container in the patients hand will allow them to authenticate the package.
3: That same container or more appropriately the serial barcode will allow patients to link to a variety of compliance tools which will allow them to track their individual performance and link them to a variety of reminder tools. Many of these have already been developed and are seeing limited uptake but I think the serial link would enhance the effort.
4: That serial number could create the opportunity for direct to consumer notification of recalls, not depending on the pharmacist to track the lot and then research which patients scrips were filled from that lot etc. .
5: That serial number could be used in reverse logistics to prevent the re-issuance of a container that was already delivered into the market place and left the care of a professional controlled environment (see Heparin, CA, McKesson)
6: That serialized container would ease the process of reverse logistics, returns. No more diverted returns.
But we can't begin to take advantage of these without item level serialization. Without the track component we lose visibility in the supply chain and will only learn of problems after they occur. The intent of Track and Trace is to prevent problems from occurring.
Thank you again for allowing me to participate in the session last week. I look forward to hearing about your progress on this critical issue.
The Healthcare Compliance Packaging Council.