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Will US track and trace law be enough to stop counterfeiters?

By Zachary Brennan , 31-Mar-2014
Last updated the 31-Mar-2014 at 16:00 GMT

In light of the implementation of the Drug Quality and Security Act of 2013 in the US, which calls for the phased implementation of electronic tracking down to the package level, companies are looking at options to catch up and reduce counterfeiting at the same time.

But whether companies will be able to shut out the counterfeiters in the US is yet to be seen as the legislation, which was signed into law in late November , is still being implemented.

We’re one mistake away from having a big problem” as counterfeiters understand that the US is one of the last developed nations to have a track and trace system down to the package level, Bill Fletcher, managing partner of Pharma Logic Solutions, told a small crowd at Interphex last week.

He noted that the DQSA, which pre-empts California law, focuses on the middle section of the supply chain, though the global trade drives counterfeiting to areas that lack traceability regulations.

In many cases, we lack the systems to measure where the counterfeiting is – and the investigations are usually top secret within a company,” Fletcher said. Counterfeiters do a good job of simulating what the actual packaging looks like, he said.

Fletcher, who has helped 22 life science companies with their track and trace capabilities – most projects have taken about six months – added that variations in product identification and encoding in other countries, such as Turkey, means that companies need to have data system agility.

US Law Implementation

In terms of the timing of the new law, by May 27, FDA has to release guidance to help trading partners in the identification of suspect product and notification termination. Before November 27, the FDA also has to publish transaction standards.

But as of Jan. 1, 2015, manufacturers must only trade with authorized distributors, which must provide transaction tracking and certification, as well as systems for verification of suspect goods within one business day. In two years, the FDA will publish guidance on waivers, exemptions and exceptions, as well as grandfathering in the supply chain, Fletcher notes.

A lot of companies are falling into the category of manufacturer under the law, but they also may be classified as a ‘repackager,’ exclusive distributor, or a wholesaler, which then entails new requirements for each company under the DQSA.

A lot of times there was confusion from the California law on which companies should be designated distributor and dispensers (eg. retail or hospital pharmacy), so the DQSA should help provide clarity on where companies fit, and what is “just noise that doesn’t involve you,” Fletcher said.

But there will be a delay in the stream of information in controlling the supply chain as companies implement the standardized numeric identifier (SNI), which is a two-dimensional data matrix barcode.

Many companies are following the GS-1 standards, he added, noting that some of those companies are now looking to use other serialization formats, such as RFID (radio frequency identification). Serialization is slated to begin November 27, 2017, according to the law.

Today, many companies will ship product with a valid DEA number, “but that may not meet the licensing requirements under the new law, and companies will need to verify the proper licensing of who they sell to,” Fletcher said.

In addition, by Jan. 1, 2015, companies will need to provide a single document with transaction history, information and statements, which must be captured for no less than six years after the date of the transaction.

The storage of the information will be key, Fletcher noted, especially as transaction information will likely be digital. Companies will also need to have quarantine processes if suspect product is found and the law is “very specific” in this respect, he added.

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