Cracking Down on Counterfeiting

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology-08-02-2006, Volume 30, Issue 8

Disappointed in progress thus far, the US Food and Drug Administration wants pharmaceutical manufacturers to make a greater effort to combat counterfeit products and recommends that they "move quickly" to implement radio-frequency identification technology.

In the fight against counterfeit drugs in the United States, there's good news and bad news. The good news is that the US drug supply remains the safest in the world and we have the technology to keep it that way. The bad news is that counterfeiters are more sophisticated than ever, and the pharmaceutical industry has been slow to take protective measures.

FDA raises the bar on regulations

On June 8, 2006, the US Food and Drug Administration endorsed the recommendations of its Counterfeit Drug Task Force as outlined in the Counterfeit Drug Task Force Report: 2006 Update (1).

The 2006 document builds on the Task Force's 2004 and 2005 reports and reflects input from public comments and a February 2006 workshop. Among its major recommendations, the Task Force advised the agency not to extend the stay of the pedigree requirement of the 1992 Prescription Drug Amendments of the Prescription Drug Marketing Act of 1987 (PDMA).

The pros and cons of radio-frequency identification

As a result, drug distributors will be required to provide pedigree, or chain-of-custody, documentation about products that pass through their hands after Dec. 1, 2006 when the stay expires. FDA defines a drug pedigree as "a statement of origin that identifies each prior sale, purchase, or trade of a drug, including the date of those transactions and the names and addresses of all parties to them. Under the pedigree requirement, each person who is engaged in the wholesale distribution of a prescription drug in interstate commerce, who is not the manufacturer or an authorized distributor of record for that drug, must provide to the person who receives the drug a pedigree for that drug" (2).

Because members of the pharmaceutical supply chain have known since the passage of the PDMA that pedigree documentation would be required at some point and several states have passed pedigree laws, the Task Force believes "FDA can no longer justify delaying implementation of these regulations" (1). It also thinks that "continuing the stay would perpetuate the current confusion and further allow opportunities for counterfeit and diversionary practices to flourish" (1).

The Task Force also feels meeting federal pedigree requirements should be less of a burden now because members of the pharmaceutical supply chain are already working to comply with a growing number of state pedigree requirements.


Once the stay expires, the Task Force recommends the agency take a risk-based approach to enforcement and focus initially on the drug products that are most vulnerable to counterfeiting and diversion, thus allowing the industry to adopt a phased pedigree implementation. The agency has issued draft Compliance Policy Guide (CPG) 160.900 that describes four factors for field personnel to consider when enforcing pedigree requirements.

According to the draft CPG, pedigree requirements will be enforced initially for products that meet one or more of the following criteria:

  • high value in the US market because of high volume, price, or demand, with special attention to drugs for serious or life-threatening conditions and products in short supply;

  • prior history of counterfeiting or diversion of the drug itself or others in its class;

  • reasonable probability that a newly approved drug will be counterfeited or diverted;

  • entities that are violating the PDMA or other laws.

Guidance documents do not contain legally enforceable requirements, but rather describe the agency's current thinking and should be viewed as recommendations unless specific regulations or statutes are cited. Comments on the draft CPG were due July 14, 2006. A final document is expected to be published before the stay expires on Dec. 1, 2006.

Benefits of track-and-trace technology. Most of the remainder of the Counterfeit Drug Task Force report focuses on technology issues related to electronic track-and-trace, or e-pedigree, implementation. It also reiterates the members' belief that radio-frequency identification (RFID) "is the most promising technology for implementing track and trace in the drug supply chain and that stakeholders should move quickly to implement this technology" (1).

The report asserts a "timetable with achievable, realistic milestones is crucial to keep e-pedigree implementation on track" and sounds a warning note: "the voluntary approach that we advocated in the 2004 Task Force Report did not provide industry with enough incentives to meet FDA's deadline" of 2007 (1). Although the Task Force stopped short of recommending the agency mandate adoption of RFID, it certainly left the door open to that possibility if the industry doesn't show sufficient progress toward achieving track-and-trace goals.

The Task Force also noted the significant savings electronic track-and-trace technology can provide the supply chain "in the form of better inventory management, reduction in theft and product loss, improved recall efficiency, and reduced paperwork burdens" (1).

In addition, the Task Force noted, "RFID also has tremendous potential benefits for drug products used in public health emergencies such as a pandemic influenza or bioterrorist attack. RFID tracking could help in expeditious deployment and redeployment of medical countermeasures in times of crisis. FDA should, therefore, encourage manufacturers of these types of products to explore use of RFID" (1).

The hurdles. Unfortunately, hurdles to widespread adoption remain, including evolving standards, insufficient information about the effect of radio frequency on biologics, and the cost of implementation. Thus, the Task Force recommends that "FDA work quickly to complete its RFID Impact Study examining drugs and biologics, and publicly share the results" (1). It also suggests stakeholders "consider a phased-in approach, placing RFID tags on products most vulnerable to counterfeiting and diversion as a first step" (1), an action already underway at firms such as Pfizer (New York, NY, and Purdue Pharma (Stamford, CT,

Remaining technical issues

Frequency. The choice of frequency for item-level tagging poses an obstacle to deployment, but isn't addressed in the report. Some pilot programs use high frequency (13.56 MHz) whereas others are experimenting with ultra-high frequency. In the end, the two options may coexist. Not only are there strong proponents for each frequency, but EPCglobal, Inc. (Brussels, Belgium, has organized working groups to develop the standards needed to use each frequency for item-level tagging. The use of both frequencies in the supply chain has infrastructure implications because each frequency requires its own reader. Nonetheless, at least one company has introduced a dual-frequency reader capable of capturing data from either ultra-high or high-frequency tags (universal point-of-sale reader, TAGSYS, Cambridge, MA, It is designed for point-of-sale applications, however, and may require modification for pedigree functions.

Mass serialization. Other hurdles to deployment include whether mass serialization (i.e., each drug package receives a unique identifier) is necessary and whether the product's national drug code (NDC) should be incorporated in the electronic product code. Mass serialization is essential, and the Task Force recommends the NDC be "closely associated with the product." It further recommends "for non-line-of-sight technology, such as RFID, the unique identifier for the product should either include an encrypted NDC number or an accessible link to the NDC number to protect privacy" (1).

The information a drug pedigree should contain is codified in 21 CFR 203.50, but FDA does not have the statutory authority to implement a uniform requirement that would supersede state requirements. And, it cannot mandate a universal requirement that includes all wholesalers. This means stakeholders may have to meet federal as well as multiple state pedigree requirements, and there may be pedigree gaps unless Congress passes legislation in these areas.

Data management. E-pedigree implementation also depends on the data management that enables information sharing among all members of the supply chain from a central database or a distributed system where information is stored on various company servers. Data security is imperative. The Task Force expressed no preference between a centralized or distributed data storage system and noted that a hybrid environment may be the optimum solution. The report goes on to say, "We do believe that it is essential that every entity in a drug product's chain of custody have access to the product's pedigree data all the way back to the manufacturer, in order to verify and authenticate the pedigree. It is also important for FDA to have access to the information in matters of suspect illegal activity" (1).

Some assistance with data management may be generated by a collaborative effort between the HDMA Foundation, the research arm of the Healthcare Distribution Management Association (Arlington, VA,, and the Rutgers Center for Supply Chain Management (New Brunswick, NJ,

Privacy concerns. The Task Force stated that privacy issues must be addressed and noted that "consumer education is necessary" regarding the presence and purpose of RFID. Toward that end, it recommends the agency support the industry's education efforts and "work with manufacturers and other stakeholders in their efforts to develop appropriate messages, symbols, or statements for labeling of drug products and packaging that contains an RFID tag" (1).

Another privacy issue to be worked out is whether to deactivate or remove an RFID tag and at what point in the supply chain this should be done. Tag deactivation may be addressed in the standards-making process or may have to wait until the e-pedigree process is more mature. "We believe that this issue warrants further discussion among stakeholders, technology experts, and consumers, about the viable options," states the report (1).

The stay on pedigree requirements will expire in a few months, so members of the pharmaceutical supply chain must accelerate their pedigree data collection efforts now. The report concludes, "With the implementation of the PDMA [pedigree] regulations in December 2006, we expect that supply chain stakeholders will move quickly to adopt electronic track and trace technology, implementing RFID in a phased-in approach . . . companies should continue to tag drug products, build infrastructure across the supply chain for using an e-pedigree, and remain vigilant to their responsibility to provide a safe and effective drug product to the patient" (1).


1. US Food and Drug Administration, FDA Counterfeit Drug Task Force Report: 2006 Update (FDA, Rockville, MD, June 2006),, accessed July 11, 2006.

2. FDA, Draft Compliance Policy Guide 160.900, Prescription Drug Marketing Act: Pedigree Requirements under 21 CFR Part 203 (FDA, Rockville, MD, June 2006),, accessed July 11, 2006.