Electronic Drug Tracking Will “Link” With E-Prescribing – FDA’s McClellan

Electronic "track and trace" technologies used in drug distribution will "link" with electronic prescribing to help reduce prescription costs, FDA Commissioner McClellan told the Healthcare Distribution Management Association's annual meeting Nov. 6 in Marco Island, Fla.

McClellan noted that FDA has worked with the congressional Medicare prescription drug conference committee to include a provision that would encourage electronic prescribing. E-prescribing systems could "link up with the information systems that you all developed to improve track and trace technology," McClellan suggested.

"The result: better medical care at a lower cost," McClellan said. Pharmacy benefit management companies are also encouraging the uptake of e-prescribing (see ¹ (Also see "E-Prescribing In Medicare: SureScripts Says Mandate Would Hurt" - Pink Sheet, 10 Nov, 2003.) ).

HDMA Chairman Jon Borschow (Borschow Drugs) described how electronic product code and radio frequency identification technology might work with e-prescribing.

"Once implemented, RFID could match a drug to a specific patient outfitted with an EPC wristband. The scan would verify the patient's medical history, preventing the administration of an incompatible medication and reducing the instances of medical error," Borschow said.

"The EPC also could confirm the drug and the dosage, the administration method and the caregiver administering the drug." FDA's drug anti-counterfeiting interim report encouraged manufacturers to work toward an electronic "pedigree" for drugs (² (Also see "FDA Counterfeit Report Seeks “Electronic Pedigree” To Aid Drug Tracking" - Pink Sheet, 6 Oct, 2003.), p. 3).

In addition to protecting products from counterfeiting, HDMA is highlighting the financial benefits of using EPC and RFID. The technology would allow each drug product to be given a unique EPC embedded in an RFID chip, which transmits the product's information to a reader at each step in the distribution chain.

In preliminary studies conducted at the Massachusetts Institute of Technology's Auto-ID center, "EPC saved between 3% and 5% in supply costs and a whopping 35% of labor costs," Borschow said. "These savings will increase as RFID and EPC become standard....Likewise, as more companies adopt the technology, chips and readers will decrease in price."

An HDMA white paper released Nov. 6 highlights the benefits of using EPC and RFID technology.

Benefits include more effective inventory management, the white paper says. "When participants within the supply chain see that goods are available and know where they are within the supply chain, parties all along the supply chain can reduce their inventories, without risking sales."

EPC/RFID would also help locate lost items, offer additional storage flexibility, reduce shrinkage, automatically track expiration dates, and ease management of returns and recalls, HDMA said.

At FDA's recent anti-counterfeiting workshop, the Pharmaceutical Research & Manufacturers of America maintained that RFID would be too costly for manufacturers to implement (³ (Also see "Anti-Counterfeiting Interim Step Should Be Paper Pedigree, PhRMA Says" - Pink Sheet, 20 Oct, 2003.), p. 21).

HDMA's board adopted a position statement Nov. 5 recommending deadlines for adopting EPC/RFID.

Manufacturers and wholesalers "should utilize EPC tags at the case level with a goal for deployment of December 2004," the position statement says. "Furthermore, pharmaceutical packagers and manufacturers should incorporate EPC tags at the selling unit level with a goal for deployment by 2007."

"In addition, it is recommended that health care distributors develop the appropriate infrastructure for tracking and tracing of products utilizing the EPC." Borschow noted that WalMart recently announced that it expects suppliers to start using EPC at the case level by January 2005, and the Department of Defense has mandated that suppliers use RFID by 2005.

McClellan commended HDMA for recognizing the numerous benefits of EPC. "It will be harder for counterfeit drugs to make it into the system, but they will also help reduce the cost and improve the quality of prescription drugs," he said.

HDMA also finalized its voluntary guidelines for pharmaceutical distribution system integrity (⁴ (Also see "FDA Counterfeit Task Force Continues Work On Wholesaler “Best Practices”" - Pink Sheet, 6 Oct, 2003.), p. 5).