Injunction latest snag in FDA pedigree fiasco

By Anna Lewcock

- Last updated on GMT

Related tags Food and drug administration Pharmacology Fda

A federal court judge has imposed a temporary injunction against
the US Food and Drug Administration (FDA) over the organisation's
drug 'pedigree' requirements, on the basis that the regulations
leave sections of the supply chain unguarded and threaten the
survival of smaller drug distributors.

The Prescription Drug Marketing Act (PDMA), originally put into force in 1988, outlines the requirement for a drug pedigree - a statement of origin that identifies each prior sale, purchase or trade of a drug right back to the manufacturer.

However, Authorised Distributors (ADs) are exempt from having to provide pedigrees for the drugs they provide, thus leaving sections of the supply chain unmonitored and pedigrees hard to establish further down the line.

Authorised distributors are somewhat hazily defined as those who have ongoing relationships with manufacturers, identifiable by evidence of repeated transactions with the manufacturer.

Over 90 per cent of the drug wholesale industry in the US is controlled by a handful of companies who are authorised distributors. This group is commonly referred to as the Big Five, including the top players of McKesson, AmeriSource and Cardinal Health.

The exemption means that ADs tend not to maintain or pass on pedigrees for the products they obtain from manufacturers. This becomes problematic when those further down the supply chain, 'unauthorised' distributors for example, are required to provide pedigrees right back to the manufacturer. It also means that over 90 per cent of the prescription drugs in the US are essentially uncovered by the PDMA's security measures.

The FDA's pedigree requirements were due to come into effect back in 2000, but the move was repeatedly stayed due to concerns from industry stakeholders. Back in 2004, the organisation decided to delay the move again based on information from the industry suggesting that electronic track and trace technology (such as RFID tagging) was likely to be in place throughout the industry by 2007, thus providing a de facto​ pedigree.

As this has not been the case, the FDA decided against any further delays and sought to implement the pedigree requirements as of 1 December 2006.

The move threw the smaller pharmaceutical distributors in the US (who do not obtain their goods directly from the manufacturer) into a tailspin as the AD exemption means that they simply cannot obtain a complete pedigree for their drugs and thus would be unable to trade legally.

The National Coalition of Pharmaceutical Distributors (NCPD) backed the injunction, granted by Judge Joanna Seybert in the Eastern District Federal Court:

"The manner in which the FDA has gone about interpreting PDMA is poorly conceived, and has been compromised by the interests of the major pharmaceutical manufacturers and distributors,"​ said NCPD president, Karen Moody.

"NCPD members…would have been destroyed by these rules; the final irony is that there is expert analysis that the current pedigree system could be easily circumvented by counterfeiters, thus providing a false sense of security to the healthcare system."

The FDA noted the problem with the PDMA pedigree requirements in its report to Congress back in 2001, noting that it "creates a substantial problem for unauthorised distributors wishing to purchase prescription drugs from an authorised distributor and resell them"​, and "[the AD exemption] undermines the purpose of the pedigree by allowing potential gaps in the distribution history."​. Despite this, no change has been made to the pedigree requirements to address this issue.

The temporary injunction granted last month will maintain the status quo and allow trading by pharmaceutical distributors to continue as it had been in the past. The case will be decided in court, and although a date has not been set, a spokesperson for the NCPD told that it could be a long as six to nine months' time.

Vice president of the NCPD, Gene Alley, explained the coalition's hopes for the hearing:

"The ideal outcome is a universal pedigree, in which the pedigree information process begins with the manufacturer and flows freely from there [including ADs]. Our second wish, if that is not an option, is that the unauthorised distributors would be required to furnish pedigree information back to the original authorised distributor (as opposed to the manufacturer)."

This, however, would not tackle the safety issues inherent in leaving a section of the drug supply chain essentially unmonitored.

This issue is further exacerbated by the fact that ADs are not required to provide a pedigree even if they themselves obtained the products from a secondary wholesaler. The FDA themselves noted that some drugs may go through several transaction cycles involving multiple primary and secondary wholesalers before arriving at their retail destination.

According to the National Wholesale Druggists' Association, the Big Five purchase 2-4 per cent of their products from sources other than manufacturers, and one of the group reported that $350m (€271m) of their total inventory came from non-manufacturer vendors.

According to the NCPD, only one major authorised distributor has offered to provide pedigrees - but only at a monthly fee of $5000 with no fill rate guarantee, and with a raise to its existing volume pricing by around 5 per cent.

A simple solution would seem to be for unauthorised distributors to buy directly from manufacturers, but manufacturers tend not to open new accounts for these smaller firms who may not purchase a wide enough assortment of their drug products.

"There is no rational reason [why ADs are exempt from the pedigree requirements],"​ said Alley.

"The Big Five have extremely deep pockets, and have lobbyists that press Congress and FDA to their viewpoints."​.

NCPD members are currently in Washington preparing to discuss their position in Congress, and are requesting the FDA to stay the implementation of the regulations until December 2008 so that the "negative unintended consequences of this law can be addressed in the spring of 2007 by getting input from all healthcare distributors and not just the giants."

Related topics Markets & Regulations QA/QC

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