California pharmacy board urged to delay e-pedigree

March 10, 2008

Pharmacists debate the efficacy and impact of California's forthcoming e-pedigree rule.

The California law is designed to combat counterfeiting by creating an easily traceable electronic record of the entire life cycle of a product from manufacture to dispensing or destruction. Under the law, after January 1, 2009, no wholesaler or pharmacy may sell, trade, or transfer a prescription drug at wholesale without providing an electronic pedigree. Furthermore, no wholesaler or pharmacy may acquire a prescription drug without a pedigree. The law also allows the board discretion to delay implementation an additional two years until 2011.

Other states, like Utah and Florida, have instituted more limited pedigree requirements, but the California law is the most far reaching. The Food & Drug Administration has advocated for a national approach, but the federal pedigree regulation in the Prescription Drug Marketing Act (PDMA) has been challenged in an ongoing court battle between the secondary wholesaler RxUSA and the FDA. The judge in the case has granted a preliminary injunction while the case proceeds.

Despite the long lead time for the rule, many companies are telling the board that they will not be ready in time. Technological hurdles with RFID (radio frequency identification) technology have slowed implementation, although new generations of RFID tags and supply-chain software have made great strides. Just as significantly, e-pedigree requires both changes in workflow and significant investment throughout the supply chain. "I don't believe that a thorough financial analysis has been done on the implementation of electronic pedigree," maintains David Fong, Pharm.D., senior VP of pharmacy & family care at California-based Safeway. "Who's picking up that cost?"

"It shouldn't be a question of whether Safeway is ready as much as whether the supply chain is ready, because we can do our part," added Fong. "We don't believe that on January 1, 2009, the supply chain will be ready to comply with the rule."

In testimony before the board last month Steve Perlowski, National Association of Chain Drug Stores' VP of industry relations, requested that the board allow pharmacies to continue two practices that would otherwise be banned by the new regulations. Perlowski urged the board to extend the deadline for inferencing until 2013 and to allow existing inventory up to two years beyond the compliance date to sell through the supply chain. With the practice of inferencing, when a shipment is received from a reputable manufacturer with no history of problems, pharmacies check the number of packages against the receiving documents and infer that if there is no sign of tampering that the shipment is safe and accurate. According to Lynn Rolston, CEO of the California Pharmacists Association, the board doesn't have statutory authority to give pharmacies extra leeway, but the organization is hoping to sponsor legislation to handle the problem.

Others pharmacists worry about the broader impact e-pedigrees will have on the industry. "The deeper issue is the cost on pricing policy in general," explained Stephen Schondelmeyer, Pharm.D., Ph.D. director, PRIME Institute, College of Pharmacy, University of Minnesota. "E-pedigree puts the manufacturers in control of their product from the time it leaves their plant till it gets to the patient. So they can enforce price maintenance all the way through the system, but that's never talked about when we talk about e-pedigree. We need to honestly evaluate economic policy for pharmaceuticals. We have many policies on the books that were there for other reasons that dramatically affect our cost structure, and that's why we pay 50% to 60% more than most other countries for the same drug."