Regulatory Beat: FDA and Industry Seek New Strategies to Curb Counterfeiting and Diversion

April 1, 2006
Jill Wechsler
Jill Wechsler

Jill Wechsler is BioPharm International's Washington Editor,

BioPharm International, BioPharm International-04-01-2006, Volume 19, Issue 4
Page Number: 40–45

RFID is currently the most advanced tracking technology, but manufacturers need to pursue a multilayered approach . . .

FDA has to decide by the end of the year whether to implement a rule to track a drug's pathway from manufacturer to final dispenser, even if it means starting with an outmoded, paper-based pedigree system. The policy aims to thwart drug counterfeiting, which is on the rise around the world. This poses a serious threat to public health, particularly when injectable drugs are involved. While FDA has delayed action, states and major retailers are responding by implementing their own drug pedigree requirements. Manufacturers are testing authentication and tracking systems. So far, most solutions appear costly, but may be valuable in modernizing inventory and distribution systems and avoiding legal and regulatory problems.

Jill Wechsler


FDA held a public workshop in early February to examine the progress made over the last two years in implementing electronic track-and-trace technologies, based on a radio frequency identification system (RFID). This initiative arose from the Prescription Drug Marketing Act of 1987 (PDMA), which aimed to combat drug counterfeiting by requiring "unauthorized wholesalers" to provide purchasers with a statement (a.k.a. pedigree) presenting a history of prior sales of the drug and the names and addresses of parties to these transactions. The legislation also required states to license wholesale drug distributors and curbed drug sampling. Those provisions were implemented years ago, but industry convinced FDA that a paper pedigree system would be costly and cumbersome. FDA agreed to delay implementation until manufacturers, distributors, and pharmacists could develop a workable approach.

By 2004, the solution appeared to lie in an RFID tracking system. An FDA Counterfeit Drug Task Force issued a report that reviewed recent technological and policy developments and concluded that the agency should postpone the pedigree requirement once more to provide time to implement an electronic tracking system by 2007.

But participants at this year's workshop acknowledged that implementation of a workable tracking system based on RFID still is years away. The Biotechnology Industry Organization (BIO) pointed to technological limitations, a lack of uniform standards, and concerns about the effect of RFID tags on biological stability for slowing RFID adoption. Progress has been "disappointing," commented FDA deputy commissioner Scott Gottlieb last month at a drug anti-counterfeiting forum sponsored by FDA. He noted a lack of agreement on key issues, such as who pays for RFID and who owns transaction data. FDA's task force is scheduled to report back in May on whether to delay the pedigree rule once more or to implement the requirement, possibly with some changes.


One problem is that manufacturers, wholesalers, and pharmacists disagree on how best to address these issues. Drug and biotech companies want FDA to implement the pedigree policy as a way to pressure all parties to move forward, while leaving the door open to the development of tracking technologies besides RFID.

Wholesalers and retail pharmacists insist that any national drug pedigree system has to be electronic. Distributors want FDA to phase in an RFID system utilizing electronic product codes (EPC), allowing enough time to develop needed data management and sharing processes. The National Association of Chain Drug Stores would like the agency to clarify that pedigrees apply only to parties outside the "normal distribution chain."

FDA and industry are under pressure to act as a growing number of states adopt their own drug pedigree requirements. Florida enacted a law in 2003 to discourage drug counterfeiting and diversion by requiring wholesalers to provide paper pedigrees for prescription drugs; it becomes fully effective in July 2006. California expects to implement a drug pedigree policy in 2007 or 2008 that establishes an electronic tracking system able to transmit extensive product data on all drugs.

Members of Congress also are introducing legislation establishing a time frame for phasing in electronic tracking of prescription drugs. One bill requires RFID tracking of the 30 most frequently counterfeited drugs (to be determined by FDA) by December 31, 2007. Another goes even further in requiring paper pedigrees until RFID technology is fully established.

A number of pharma manufacturers are testing RFID tracking systems, primarily for products targeted by counterfeiters and diverters, such as Purdue Pharma's OxyContin and Pfizer's Viagra. These limited projects indicate that electronic tracking is technically feasible, but that much more needs to be done to establish a broad system that can handle thousands of products moving among multiple distribution points.

With pressure mounting to do more to protect the nation's drug supply from counterfeiting, tampering, and diversion, another stay on the PDMA pedigree requirement seems unlikely. The task force will lay out the options, examine available tracking and authentication technology, describe the multiple levels of protection needed to better secure the nation's drug supply, and provide additional policy guidance to spur all parties in the supply chain to move forward.

To this end, manufacturers are collaborating with distributors and other parties to develop e-pedigree standards for messaging, item-level tagging, serialization, RFID frequencies, and network security. A key issue in developing a broad tracking system is deciding whether all the transaction information should be stored in a single central database or throughout the distribution network.

Companies also are implementing methods to identify genuine packages and products. These include overt technologies, such as color shifting inks and holograms, and more sophisticated covert methods. Desirable technologies have minimal impact on manufacturing processes, are easy to authenticate in the field, and can be applied to multiple products and packaging components to support a corporate approach to product security across brands and regions.

A key concern for biotech manufacturers is whether any inks or colorings might cause product adulteration, and if the heat from RFID tagging systems could have thermal effects on chemical bonds in some products. FDA and manufacturers are examining whether heating and radio-frequency field strengths may affect the stability of certain liquid pharmaceuticals. Manufacturers hope that FDA's May report will contain further advice on how to develop unique identifiers for drug packages and whether any colorants or other authentication technologies are likely to impact product dissolution, stability, or identification.


While electronic track-and-trace still dominates discussions about effective prescription drug protection, there is a growing realization that RFID is primarily a supply chain management tool and not that useful in product authentication. RFID currently is the most advanced tracking technology, commented FDA's Gottlieb, but he noted a need to pursue a "multi-layered approach" that includes use of two-dimensional bar codes and other technologies.

Gottlieb also acknowledged a need for laying stiffer penalties on lawbreakers and expanded enforcement and detection efforts. He suggested that the government may look for new ways to encourage drug security methods. One idea might be to require authentication technologies on drugs purchased for the national stockpile; product tracking would be important for medicines distributed broadly during a national emergency.

RFID and authentication methods may appear too costly for all but the most vulnerable products, but these strategies may pay off for manufacturers by improving inventory management and distribution systems, reducing theft, enhancing public confidence, and avoiding lawsuits from consumers harmed by an adulterated version of the company's product. In the future, lack of internal security measures and failure to adequately monitor products through the distribution system may create legal and regulatory problems for manufacturers.

Jill Wechsler is BioPharm International's Washington editor, 7715 Rocton Avenue, Chevy Chase, MD 20815, 301.656.4634,