Traceability and Safeguarding The Drug Supply Chain


In the past year, the FDA has cracked down on compounding pharmacies, inspecting 70 firms, shutting down 19 pharmacies and recalling 17 different drugs as a result. This inspection streak has taken place as deadly meningitis outbreaks swept across the country, infecting hundreds of people and killing 60 in the past year. The incident was traced to contaminated steroid injections produced by a compounding pharmacy.  Similar incidents continued over the course of the year, which in turn highlighted the need for an approach to regulate compounding pharmacies to safeguard compounded drugs. There was universal agreement that inspections needed to be conducted and standards enforced. Nonetheless, the debate centered on whether the FDA had the direct authority to oversee inspections, and if not, then who and how would patient safety be safeguarded.

In response to this debate and the need to ensure the safety of compounded drugs and pharmaceutical supply chain as a whole, leaders from the House committee overseeing health policy introduced H.R. 3204, the Drug Quality and Security Act. The act is a bicameral legislation written to (1) address high-risk drug compounding and (2) promote traceability as a practice to secure pharmaceutical supply chain.

First, the bill clarifies current federal law regarding pharmacy compounding and resolves the patchwork of current federal regulation by applying a uniform standard nationwide. Compounders will be monitored in the same fashion as manufacturers and the FDA will have oversight over their facilities, as well as, be privy to information on all outsourced compounds. This includes what pharmaceutical companies are making, which will require compounders to generate reports on adverse effects (AEs). Most importantly, H.R.3204 seeks to correct the constitutional defect in the FDA’s drug compounding statute that has hindered the agency from enforcing existing laws governing compounding over the past years by giving the FDA the opportunity to have broad oversight of a new category of large compounding pharmacies.

Second, the bill proposes a uniform system for tracking drugs from the manufacturer to the pharmacy that will replace today’s patchwork of state tracing laws. While this bill improves public health and seeks to protect consumers’ health and safety, the bill leaves a number of questions unaddressed and the industry confused on what exactly it needs to do in order to comply. It also doesn’t address a number of issues that have hindered previous traceability mandates from becoming law.  Stakeholders have all expressed concern regarding the vast amount of data that needs to be securely captured, retrieved, transferred and managed. The main concern is, how to manage the vastness of the data with real-time speed?

The key to successfully complying with regulation and leveraging traceability data lies in the technology itself and its customized applications. Track and trace technology must be robust enough to handle large amounts of data gathered from countless events. The technology must be able to process the data at real-time speed. If it breaks down, stakeholders will experience interruption and delays in production, distribution, delivery and ultimately, consumption. The impact goes beyond profitability and can lead to drug shortages and subsequently limiting the access to medicine that patients need, affecting global public health. Therefore, to ensure compliance and thereby distribution of drugs, stakeholders must select the most robust traceability software on the market. Track and trace technology also needs to demonstrate scalability and reporting flexibility that can be customized to customer demand, supply chain variables, new requirements and trading partner needs.  While processes and workflows are essential to distribution, random events occur. Scalability, flexibility and customization allow stakeholders to make minor adjustments in real-time to maintain safe supply chains.

Finally, it is essential to partner with a solution provider that has experience in the industry and who understands the true nature of end-to-end supply chain security. In addition to the vague requirements and large amounts of data to manage, there are trends, events and industry specific challenges unique to the pharmaceutical and compounding drug industry. While robustness, flexibility and scalability are essential to technology, insight into what is happening along the supply chain and a company’s individual needs are required to implement traceability solutions. Further, the technology allows firms to maximize the benefits and opportunities that result from data capture and reporting while also complying with traceability mandates.

Recent requirements for compounding and traceability are big wins for public health. The next step is to ensure that traceability delivers on the promise to safeguard the drug supply chain. To achieve this, the industry must expand beyond federal law requirements by applying the proper tools, thoughtful planning and technology. Together, this can produce maximum benefit, ensure patient safety and health, and avoid drug shortages.