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As regulators work to curb counterfeiting, industry finds benefits to gaining granular data about the supply chain. This article contains bonus online-exclusive material.
The problem of counterfeited, adulterated, and diverted drugs is on the rise, and fake pharmaceutical products are expected to account for $75 billion in 2010. The World Health Organization (WHO) estimates that counterfeits account for 1% of drugs in developed nations and up to 30% of drugs in developing areas. As counterfeiters' business grows, so does the sophistication of their techniques, creating losses for pharmaceutical companies, and jeopardizing the health and confidence of patients taking medications.
IMAGES: GARY S. CHAPMAN, STEVE WISBAUER/GETTY IMAGES
Industry concerns and challenges
Despite the growing number of counterfeits, there is confusion in industry over how, when, and even whether to implement anticounterfeiting and supply-chain security measures. This hesitation likely stems from several factors such as a low awareness of risks, the costs of deployment, and the lack of industry standards for implementing these measures. An incomplete understanding of counterfeiting risk or a reluctance to admit a problem could be a barrier in some instances, says Carla Reed, principle of the consulting group New Creed. "Part of the solution in any case is acknowledging the problem," she says. "Companies need to be proactive rather than reactive."
In many cases, early adopters of anticounterfeiting solutions did so because there was a counterfeiting problem. For example, Pfizer's (New York) problems with counterfeiters copying Viagra (sildenafil citrate) and Purdue Pharma's (Stamford, CT) similar issues with its painkiller OxyContin (oxycodone hydrochloride) led the companies to implement radio-frequency identification (RFID) to track those drugs through the supply chain.
"More important than the technology used is understanding the key events in the product life cycle, how the product is tracked, and what the failure points are," Reed says. To gain awareness of a potential counterfeiting risk, an assessment of a product's security can be performed (see sidebar, "Assessing product security across five dimensions" by Scott Dicks of Maxiom Group). Results of an assessment can help a company move forward with a brand-protection strategy.
Assessing product security across five dimensions.
Another roadblock for industry could be the lack of standards when it comes to measures such as serialization and electronic pedigree (ePedigree) requirements. From state to state in the US and in countries throughout the world, different requirements exist. The ability to closely trace products can prevent diversion and the introduction of counterfeit products into the supply chain, but technological details and best practices of how to achieve this are a work in progress for state and federal regulators.
Under Section 913 of the Food and Drug Administration Amendments Act of 2007, the US Food and Drug Administration is working to develop standards and identify technologies that will secure the pharmaceutical supply chain. As part of that initiative, the agency released a draft guidance for industry, Standards for Securing the Drug Supply Chain—Standardized Numerical Identification for Prescription Drug Packages, in January 2009, focused on developing standardized numerical identifiers (SNIs) for the smallest saleable unit of prescription drug packages (1). The draft guidance states that standards for other aspects of SNIs—for cases, pallets, or repackagers—and for track and trace, authentication, and validation are not addressed in this document but could be the subject of future guidances. The agency is expected to issue a final guidance on SNIs by March 2010.
Among the public comments on the draft guidance is input from pharmaceutical companies such as Endo Pharmaceuticals (Chadds Ford, PA), Hoffman–La Roche (Basel), Talecris Biotherapeutics Research Triangle Park, NC), Novo Nordisk (Bagsvaerd, Denmark), as well as the California State Board of Pharmacy, the Parenteral Drug Association, the Generic Pharmaceutical Association, the Biotechnology Industry Organization, and the supply-chain standards organization GS1 (2). A key concern is that FDA's recommended 8-digit SNI is too small, and that GS1's standard identifier Global Trade Item Number (GTIN), which is already in use by industry, should be adopted. In its comments, GS1 states that the GTIN is currently used to identify pharmaceutical products in 65 countries worldwide.
Some comments applauded the draft guidance for being technology neutral in terms of the data carrier used to comply, but California's board of pharmacy urged FDA to designate a data carrier, specifically, the use of RFID. Bikash Chatterjee, president and chief technology officer of the consultancy Pharmatech Associates, supports FDA's stance of not endorsing a specific technology.
"It's not a technology-centric issue; it's about securing your supply chain," he says. "We don't have to embrace a specific technology, and that incentivizes us to look more closely at our processes." But in terms of industry consensus on technology and best practices, he admits, "We're still running around like chickens with our heads cut off."
As FDA continues to develop standards and regulations for improving supplychain security, manufacturers can take steps to guard against counterfeiting and diversion. Ilisa Bernstein, director of pharmacy affairs in the Office of the Commissioner at FDA, says companies should look at product-packaging measures and technology that fights counterfeiting and work together with partners.
"Knowing who you're dealing with, ensuring that supply-chain partners are legitimate and that those partners have stored, handled, and transported those products safely is important," she says. "It's not just about track and trace; it's not just about authentication —it's knowing who your partners are and practicing good distributor practices, good manufacturing practices, and good pharmacy practices."
With regulations in the works, companies must find ways to continue operations in the meantime. "For manufacturers, the biggest problem is that there aren't global standards, and the challenge is to comply with a mixed bag of requirements," says Joe Ringwood, chief operating officer of Systech International, a provider of packaging execution systems. He says companies are beginning to approach compliance as a global issue rather than focusing on a specific set of regulations (e.g., California's ePedigree requirements).
In terms of serialization, for example, a shift from compliance-based thinking to a focus on business optimization is underway for many manufacturers. Gaining a more granular level of data showing product movement throughout the supply chain and tying that information to business management software (i.e., an enterprise resource planning system) can help a company improve efficiency.
"Companies like having more detailed data. The forward-thinking companies look beyond the regulations and they realize that serialization is a foundation to optimizing business practices," says Andre Pino, vice-president and chief marketing officer at Acsis, a provider of supply-chain security software. "It's not just for fighting counterfeiting, but also for optimizing their processes, for example, managing outsourced partners." Greater visibility improves the ability to manage activities such as returns and recalls. Weaknesses in the supply chain can be identified and corrective measures can be taken.
Kim Loughead, director of solutions marketing for track and trace at Axway, a provider of collaborative business solutions, sees a similar pattern among pharmaceutical manufacturers and the shift away from a purely compliance-based strategy. "Lots of folks are focused on regulation strategies, but as they get further into it they realize there are other benefits, like gaining information about the cold chain and diversion, and they are shifting gears to a value-based approach," she says.
The application of security features to the dosage form is an emerging trend. This new layer of protection presents a tougher challenge for counterfeiters to duplicate. The ability to authenticate an individual dose of product can enable monitoring of a company's supply chain and can reveal instances of diversion.
"The greater frontier is on-dosage technology because we live in a world where everything is repackaged," says Dean Hart, executive vice-president of NanoGuardian, a company that places security measures on tablets, capsules, and vial caps. "On-dosage technology is becoming a must, not as a silver bullet, but complementary to on-package technologies," Hart says.
Companies are also starting to apply a layered approach to anticounterfeiting measures, in which a mixture of overt (e.g., holograms and color-shifting inks), covert (e.g., invisible inks and digital watermarks), and forensic features (e.g., chemical taggants and nanoencryption) are used together on the packaging and the dosage form. Tamper-evident technologies applied to the packaging will further strengthen a product's security.
"There is no single solution that is known to solve all different types of counterfeiting problems, so a risk-based approach needs to be taken in assessing the threats and relative security priorities for a given product portfolio," says Robin Koh, chief strategy officer for SupplyScape, a provider of software and consulting services for supply-chain traceability and collaboration. Koh says that some companies have studied the question of balance, asking, "What is the right balance between the security protections provided by a strategy, the cost to roll out that strategy, and the scalability of that strategy not only across all product lines but also across all supply and trading partners?" Finding this balance can help them make the right choices.
Many products and services exist to fight counterfeiting and improve supply-chain security, ranging from ondosage technology to secure shipping containers to packaging-execution system software. Choosing the right technology for the right product and supply-chain process is key, as outlined below.
On-dosage and on-package technologies. NanoGuardian (Skokie, IL) focuses on placing multilayered security features on tablets, capsules, and vial caps through its brand-protection technology called NanoEncryption. The company has also developed a proof of concept for use of the technology on prefilled syringes. The NanoEncryption process, which adds nothing to the medication, comprises an overt security mark visible to the naked eye, a covert feature that can be seen with a microscope or jeweler's loupe, and forensic-level NanoCodes. Because the NanoEncrypted security features are applied directly to each dose, repackaging is not a factor in determining a compromised product.
NanoGuardian's overt and covert security features are directed at authentication and can be read in the field to detect counterfeits. The nanoscale NanoCodes can be associated with an unlimited amount of data, which can include product, manufacturing, and distribution information. The NanoCodes can only be decoded using specialized equipment and proprietary software housed at NanoGuardian Product Integrity Centers.
To effectively fight counterfeiting and illegal diversion, Dean Hart, executive vice-president of NanoGuardian says, "You need both regulations and technologies, and harsh penalties are also necessary." He recommends on-dose technology as a breakthrough in anticounterfeiting, but believes on-package technologies are still important as counterfeiting increases worldwide. "The escalation in counterfeited and illegally diverted medications calls for greater efforts, including the use of emerging technologies like on-dose technologies, to fight the growing problem," he says.
Another company focused on security at the dosage level is PHARMORX Security (Southborough, MA). The company's imaging technology, ISTARx, captures a magnified image of a tablet, capsule or thin film and can detect areas of interest on the surface. The image can be linked to the primary package and all levels of outer packaging. This information is stored in a database and can be later used to identify the dose.
"If a tablet is found on the street, we can figure out where that tablet should have been in the supply chain," says Steve Wood, president and CEO.
PHARMORX's AuthentiTrack offers serialization capabilities and security measures such as imaging technology and the use of specialty and invisible inks. The product also manages supply-chain data and provides companies with a web interface to monitor supply chain activity. The company also provides hand-held wireless scanners that can authenticate products in the field.
Focusing on packaging and labeling, ATL provides labels that are designed to combat counterfeiting and diversion in the pharmaceutical supply chain. The company's SecurBook labels feature identical forensic markers on pedigree papers, bulk containers, and individual units that can be scanned. Patented, portable-scanning units can verify and authenticate in the field.
The SecurBook labels contain an invisible and nondegradable (to 3000° C) forensic marker. When these markers are applied to pedigree documentation, packaging, and containers, the supply channel becomes secure because all digital data scans must match to ensure brand authentication, explains Donald J. Dobert, president of ATL Pharma Security Label Systems (Menomonee Falls, WI). Other ATL products designed for the pharmaceutical industry include tamper-evident unit closures and anticounterfeiting holograms.
Dobert recommends creating a flow chart of a company's supply chain. Based on the supply-chain analysis, the following should be detected: a likelihood of a security breach, an opportunity for a cost reduction, an absence of enforced standard operating procedures, and an absence of systems and trace audits to measure the performance of the system. The supply chain can then be strengthened by correcting these shortcomings.
Security in the field. Ahura Scientific's (Wilmington, MA) handheld instrument TruScan can be used for product and raw material authentication in the field or in analytical laboratories. The device uses Raman spectroscopy to rapidly identify products and detect counterfeit or adulterated drugs. In a field setting, product samples can be quickly screened to determine whether they are consistent with the authentic formulation; further analysis can be carried out in a laboratory if the exact composition of the counterfeit is needed.
Julien Bradley, director of business development at Ahura Scientific, says dosage form authentication is as important as authentication of a product's packaging. "For many years, pharmaceutical companies focused on making their packaging more difficult to imitate and separately worked with law enforcement to catch and prosecute counterfeiters," he says. "With the introduction of TruScan, many of Ahura Scientific's customers are seeing the value in authenticating not just the packaging, but the dosage form of a product itself—which is what really matters, given that patients don't consume the packaging."
Figure 2. The SMART Container from ODIN is deployable in less than 60 seconds inside any ISO standard shipping container. (ODIN TECHNOLOGOES)
Launched in April 2009, the SMART Container from ODIN Technologies (Ashburn, VA) offers a new level of visibility in the supply chain. A shipping container can not only be tracked in-transit, but the automated system also provides information about the contents of the container. The system combines passive RFID to monitor an item's presence and placement inside a container with sensor technologies to determine environmental state. The system can detect if the container is opened and something removed, and can transmit that information to any enterprise resource planning system via satellite, cellular, and active RFID. The company also provides a web-based service that allows for real-time monitoring of containers.
The SMART Container system consists of a reader, a power source, an antenna array, and an Internet communication device all self-contained in a unit smaller than a typical airplane carry-on. Installation of the system is fast—the magnetic components make it deployable in less than 60 seconds inside any ISO standard shipping container, with no pieces outside the container that can be tampered with.
"Pharmaceutical companies tell us that the biggest problem is the loss of visibility in the supply chain, and the biggest challenge is going from one controlled facility to the next controlled facility," says Patrick J. Sweeney II, founder of ODIN. "The SMART Container is like having two security guards inside the container at all times."
Supply-chain security software. Systech International's (Cranbury, NJ) packaging execution system (PES) works on a company's packaging line to enable product authentication and track-and-trace capabilities. The PES is designed to integrate with any business management software and work with any data carrier.
"The main objective of a packaging line is getting product out, and a company's IT department is concerned with maintaining the integrity of the data; we address both of these issues," says Joe Ringwood, chief operating officer. "Systech's goal is to get a serial number on each item and then get that information to the business system."
Products and solutions from Acsis (Marlton, NJ) focus on serialization, data collection and management, track and trace, and optimization of supplychain activity to increase efficiency of manufacturing and distribution processes. Among the company's products is the serialized distribution application PharmaTrak, which allows companies to track products using serialized barcodes and RFID tag labeling. Andre Pino, vicepresident and chief marketing officer at Acsis, sees a trend toward gaining more data about the supply chain, saying, "RFID and serialization has been traditionally associated with anticounterfeiting, but now we're starting to see that it offers other benefits such as optimization." The company's services also include compliance and brand protection.
Axway's (Phoenix, AZ) vertical solution for healthcare, its Synchrony Solutions suite, provides community management, visibility, and policy-management solutions. This includes eSubmissions to FDA and EMEA, ePedigree, track and trace, and business activity monitoring. The Synchrony solutions have been selected by several top pharmaceutical companies: GE Healthcare chose the ePedigree component, and both AstraZeneca and Genzyme chose the supply-chain integrity suite, according to news releases posted on Axway's website.
Kim Loughead, director of solutions marketing for track and trace at Axway, says the software "enables manufacturers to make data available to trusted partners, in all steps of the supply chain. This data can be used to secure the supply chain through enhanced visibility, to comply with global track-and-trace regulations, and also to optimize common supply-chain business processes."
SupplyScape's global traceability and serialization software solutions help companies protect against counterfeiting and diversion. The company's E-Pedigree and RxAuthentication applications center on brand protection and product traceability requirements. These solutions are supported by the company's Nexus collaboration platform, which is designed to improve business process collaboration between companies, their customers, and their supply partners. The company also has a consulting service that provides analysis and planning services for companies to improve supply-chain security, develop secure regulatory compliance programs, and project business value opportunities based on proposed supply-chain traceability investments.
Robin Koh, chief strategy officer at SupplyScape, sees two emerging trends in anticounterfeiting and supply-chain security efforts. "One very early trend in anticounterfeiting is to extend the umbrella of the traceability paradigm beyond the current finished dose supply chain. Even though coverage across this supply chain is far from complete, there is considerable energy going into two new areas. First, improving the visibility into and traceability of the inputs into the finished-dose products, notably the active pharmaceutical ingredients and excipients used in manufacturing. Second, extending the product authentication capability beyond the supply chain and into the consumer's hands via portals is an interesting new area. Given the rise of Internet pharmacies and the like, this kind of consumer empowerment may have a place at the table in the future. It also sets the stage for direct-to-consumer conversations of many types."
The integration of anticounterfeiting features and item-level serialization with the ability to monitor and manage supply-chain data can detect and combat counterfeiting. Regulations are moving forward, and in the meantime, many companies are improving efficiency by gaining a more complete understanding of their supply chain and using that information to implement protection strategies.
1. FDA, Standards for Securing the Drug Supply Chain—Standardized Numerical Identification for Prescription Drug Packages, (Rockville, MD, Jan. 2009), www.fda.gov/oc/guidance/drugsupplychain.html, accessed May 14, 2009.
2. Public comments on FDA's draft guidance for industry, Standards for Securing the Drug Supply Chain—Standardized Numerical Identification for Prescription Drug Packages, www.regulations.gov/fdmspublic/component/main?main=DocketDetail&d=FDA-2009-D-0001, accessed May 14, 2009.