An Interview with AmerisourceBergen’s Shay Reid

By John Becker for ComputerTalk

Shay Reid is VP of operations for AmerisourceBergen. A ten-year ABC veteran, Reid is responsible for operational strategy development and for implementing technology and processes that help ensure patient safety, cost-effectiveness, and on-time delivery to more than 20,000 pharmacies and other healthcare providers. Reid played a key role in defining ABC’s efforts to identify solutions for Florida pedigree and California track-and-trace. Most recently, Reid worked alongside industry colleagues in the Prescription Drug Security Alliance (PDSA) to identify a national uniform solution for prescription drug traceability. That solution was proposed to Congress for inclusion in the 2012 Prescription Drug User Fee Act (PDUFA) reauthorization, but was not included in the final language that was signed into law. Shortly after completion of the legislation, Reid sat down with John Becker, representing ComputerTalk, to discuss this important industry issue.

CT: Can you provide a brief history of drug pedigrees at the state and federal level, including which states are currently pushing pedigree requirements?

Reid: The concept of pedigree dates back to the Prescription Drug Marketing Act [PDMA] of 1988. Initially envisioned as a paper-based system for documenting movement of product through the supply chain, the initiative struggled to gain traction until technology evolved to the point where it could be leveraged to create a more manageable solution. Florida was the first state to take a serious look at pedigree requirements. Katherine Eban’s 2005 book “Dangerous Doses” and a related piece on ABC’s “20/20” raised awareness of the issue of counterfeit drugs in the state. Legislation enacted there in 2006 allowed for two pedigree types: a direct purchase pedigree for authorized distributors of record [ADRs] or full pedigree for secondary distributors. Around the same time, California implemented its own solution, which differed greatly from what Florida had done – one key difference being that California included manufacturers in the discussion. Also unlike Florida, California track-and-trace called for a full pedigree. The state’s requirements were very stringent, and the initial time frames for compliance unrealistic. Fortunately, we’ve been successful at getting those compliance dates pushed back.

At the same time, there was renewed discussion of full enactment of PDMA that would have required non-ADRs to have full pedigree all the way back to the manufacturer. This was a major concern for secondary suppliers who fought the legislation and were ultimately successful in 2006 in gaining an injunction that prevented the FDA from enforcing any of the PDMA provisions. Simultaneously, other states began to work on their own solutions, with differing degrees of success. This patchwork approach to finding a solution at the state level was imperfect and made it difficult for businesses to operate in more than one state. As of 2012, eight states have enacted legislation, while another 22 have either enacted legislation and are developing or finalizing rules, or legislation has at least been proposed. There are still 20 states with no legislation or regulations, and those are the states where the bad guys are focusing their efforts.

In July 2011 representatives from all industry segments came together and formed what eventually became the Prescription Drug Security Alliance [PDSA] to begin working toward a uniform national solution. Initially, there was little consensus as to exactly how the solution should work, which probably grew out of a lack of understanding of all the complexities in the different sectors. It took time to negotiate out all those differences and arrive at a solution we could comfortably call the right first step. While the regulators were focused on trying to implement the final solution today, we knew it would take time for the technology to evolve and that it made sense to structure our proposal accordingly.

Late last year Congress encouraged us to move quickly to propose something tangible and provided two key directives to consider if we wanted to get something done at the national level. First, the proposal had to be a consensus position across all industry stakeholders. Secondly, whatever was being proposed had to minimize the administrative burden on community pharmacy. Those criteria guided our efforts last year, and the result was the proposal we offered for inclusion in the PDUFA reauthorization. PDUFA was considered the most appropriate vehicle with which to move our initiative forward.

CT: The terms “pedigree” and “track-and-trace” are sometimes used interchangeably. Can you provide some insight into the differences between them?

Reid: A drug pedigree is representative of the movement of a certain quantity of product at a lot and shipment level through the supply chain. Track-and-trace is more focused on the individual sellable unit from the manufacturer. It’s a much more granular system. You’re not just talking about a specific shipment of a certain product with a specific lot and quantity. Now you’re talking about a specific shipment with thousands of individual item and case serial numbers, and how they all tie together in terms of cases and pallets.

CT: Tell us a little more about what was included in the PDUFA proposal.

Reid: Utlimately, there was no language included in the final PDUFA agreement. The Senate had included “placeholder” language in their version of the bill. The basic tenets of the PDSA proposal included the following: First, we defined a set of transitional requirements that would preempt all existing state requirements – manufacturer packing list, distribution history, returns, and authorized distributor of record. These are things that could be done now or in the very near term. Next, federal licensure standards were defined for manufacturers, wholesalers, third-party logistics providers, like UPS, re-packagers, and online pharmacies. The proposal also called for stronger penalties for counterfeiting and, perhaps most importantly, technology requirements were defined. E-labeling would replace the patient packs that are stuck to, and fall off of, many packages now. We also proposed adoption of the RxTEC code, a 2-D barcode that includes much more information in a small space than would be possible with a traditional barcode. The code would include four data elements: GTIN or NDC number, a unique serial number, expiration date, and lot number. This information would also be human readable to accommodate situations where scanning is not yet possible. The proposal called for manufacturers to implement systems that would monitor lot level traceability and verification of individual units, as well as distributor and dispenser lot level product traceability. As for interoperability, each trading partner in the supply chain would be responsible for maintaining their own data and also enabling themselves to exchange data with their trading partners. One caveat is that pharmacies can partner with their distributor partners to maintain the data for them.

CT: What are some of the benefits of the PDSA proposal?

Reid: First, you gain uniformity across all 50 states, as opposed to today’s current patchwork approach to solving the problem, so you eliminate a huge potential roadblock to interstate commerce and, at the same time, give the bad guys fewer places to operate. Secondly, the industry doesn’t track by lot number today. We receive product based on the NDC number and a quantity associated with that receipt. If we’re able to start tracking against lot and expiration, it gives us greater capabilities in terms of recalls, much better inventory management, and increased visibility of expiry data. So instead of physically looking for expired product, we can use our systems to tell us exactly where it is in our distribution centers. The benefits of being able to track product at the lot level flow directly to customers as well. Today, if we receive a recall for a certain lot of product, we can’t necessarily tell you where all that particular lot of product has been shipped to. With lot level tracking we’d be able to quickly and easily identify exactly which pharmacies potentially have possession of the recalled product, based on sales to them. Again, this is a first step proposal, but it definitely lays a foundation and sets a framework for additional improvements. It leverages our current capabilities and known technologies and provides an infrastructure that can be expanded on in the future.

CT: As the requirements are further defined and timetables for implementation established, what’s the best-case scenario for pharmacy?

Reid: The optimal scenario for pharmacy is for something to get done at a national level, similar to what PDSA has proposed, that minimizes the administrative and cost burden on community pharmacy. This would keep the impact and pressure off of pharmacy and allow the upstream providers – the manufacturers and wholesalers – to figure this thing out. As the technology is enabled, and if pharmacy is willing to open the transaction up to manufacturers and wholesalers, we should uncover administrative and even clinical benefits that haven’t yet been envisioned. As that happens we can potentially turn a burden for pharmacy into an actual incentive. Take the cell phone, for example. Back in the ‘80s when the large, bulky early models were coming out, how crazy would you have thought someone was if they told you that one day you’d be using that device to send text messages? Today, it’s probably the thing people use their phones for the most, but it just wasn’t envisioned then.

CT: Obviously, the decision to not include the PDSA proposal in the PDUFA reauthorization was a setback to implementation of a solution in the short term. What do you think happened, and where do you see things headed now?

Reid: In hindsight, we may have taken consensus to mean agreement among industry stakeholders, and maybe didn’t consider enough the regulatory stakeholders – because that’s really what happened at the end of the day. We had bipartisan support on the hill through senators Michael Bennet [D-Co.] and Richard Burr, R-N.C., and representatives Bilbray [R-Calif.] and Matheson [D-Vt.] and their respective committee leaders. We were starting to see support build, but then senators Bennet and Burr were tasked with really ferreting out the overall consensus, including the FDA. The PEW Center, a Washington, D.C.-based consumer advocacy group, was also included in the discussion. Everyone involved spent a lot of time and effort to gain across-the-board consensus. At the end of the day consensus could not be reached in time and the bill had to move on in the interest of keeping the PDUFA reauthorization on track, which is critical to keeping our healthcare system flowing. Unfortunately, the PDSA proposal was pulled from the bill.

This was a disappointing outcome, and while it means that the bus we were hoping to ride on has left the station, it doesn’t mean that another bus won’t come along. Members of Congress from both the House and Senate have committed to spending the month of July working on this issue, and discussions are ongoing. There’s still a lot of passion and energy around this topic and while FDA and perhaps others might have different views about how we get things done, I think at the end of the day all parties are committed to getting the right thing done as soon as possible.

Our organization will monitor developments in the coming weeks and, when appropriate, we’ll determine our course of action. CT