Pharmaceutical companies trying to push off ePedigree deadline

The state Board of Pharmacy met this week in San Diego to evaluate whether to give pharmaceutical makers and distributors an extra two years to install measures to stop drug counterfeiting. Board members are on record as being skeptical of the need for any further delay. But some who are normally critical of drug makers agree that more time may be needed.

At issue is a technology known as electronic pedigree, or ePedigree, which is used to track a drug as it moves from its maker to wholesalers, retailers and the end customer. It is intended to prevent a repeat of a spate of counterfeit drug cases uncovered from 2004 to 2006.

Drug makers and wholesalers have already won one reprieve. In 2006, language in a larger bill covering the Department of Consumer Affairs — SB1476 by former Sen. Liz Figueroa — put off the deadline from Jan. 1, 2007, to the same date in 2009. In recent months, dozens of companies have been lobbying the board for an additional two years.

“Amgen takes the issues of counterfeiting and patient safety very seriously and is working diligently to see that all of its products sold in California comply with California’s ePedigree and serialization requirements,” said company spokeswoman Kelley Davenport. “However, because implementation will require approximately 2.5 years, meeting California’s deadline of January 2009 is unworkable.”

There have been numerous cases of drug counterfeiting in California in recent years. In late 2004, two men were caught importing and counterfeiting $5.7 million worth of Viagra. Two years ago, a San Diego man was sentenced to more than four years in prison for importing counterfeit drugs from China, India and Mexico.

In many ways, the ePedigree issue provides a microcosm of the difficulties of improving any portion of the health care system. For one thing, said Dr. Bryan Liang, it involves the state trying to make changes in a vast and disjointed industry in the face of a federal government that has largely been asleep at the wheel.

“I think the board has been justifiably frustrated with the federal effort,” said Liang, the executive director of the Institute for Health Law Studies at the University of California at San Diego. “I’m glad they have a deadline because if they didn’t, people wouldn’t be pushing this hard.”

But Liang concedes that a delay may be called for, noting that “we don’t have a single standard.” He added: “We don’t want to implement something that doesn’t work.”

Letters requesting a delay have poured in to the board from more than three dozen companies and other stakeholders. But Paul Rudolf, a former Food and Drug Administration associate commissioner slated to testify at the hearing, said it would be wrong to take that as a sign that the industry has universally agreed that further delay is needed.

“You don’t normally hear from people who think a law can be implemented on time,” Rudolf noted.

There are numerous technology companies marketing hardware and software to help companies comply with ePedigree regulations. With a standard bottle of pills, implementation may be relatively straightforward. But Liang noted that many drugs come in minute amounts, often in syringes, and need to be refrigerated.

“Just think of the guy with earmuffs and mittens who needs to put hundreds of thousands of stickers on these things,” Liang said.

Another major issue is cost. To fully comply with the regulation, the industry would need to standardize, either with a bar-code system or by installing a radio frequency identification, or RFID, tag on every bottle. In 2006, the drug maker Pfizer has began using RFID tags to track all shipments of its wildly lucrative erectile dysfunction drug Viagra because it wanted to cut down on the illegal versions out of China and India being sold online for a fraction of the price. But Pfizer reported spending around $350 million on the process, Rudolf said.

Jim Dahl, the former assistant director of the FDA Office of Criminal Investigations, said the increased costs would go down the supply chain, with even mom-and-pop pharmacies needing to buy RFID readers running $2,500 and up.

The original federal law designed to stop drug counterfeiting, the Prescription Drug Marketing Act, went into effect in 1988. While this was a good first step, Dahl said the feds never took the further steps needed to make a workable system. For instance, he said, nursing homes and medical practices often get volume discounts of up to 60 percent off the list price.

This can result in drugs getting onto the black market with no way to track them, Dahl said. Once that happens, they can be mixed with placebos or subjected to other types of fraud.

“Because these people can get lower prices, someone convinces them to buy more than they need and some gets diverted into the regular market,” Dahl said. “Because it’s an undocumented system, it allows for the easy insertion of counterfeits. If you stop the diversion, you stop the insertion of counterfeits.”

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