Pedigree issue dogs distributors Drug wholesalers, particularly small, independent companies, are sweating out the days until Dec. 1. That’s the day a federal law is set to go into effect requiring that all but a handful of the largest wholesalers produce a pedigree on the pharmaceuticals they buy and sell. The question is, should IMDA members – most of whom don’t sell pharmaceuticals – be concerned? IMDA member Stan Tangalakis says the answer is yes. A pedigree is a record of who made a pharmaceutical (and when and where), and from whom it was bought and to whom it was sold -- all the way until its consumption by the patient. By documenting the path that drugs take throughout the supply chain, pedigrees are designed to cut out counterfeiting and other unsafe practices. What gives so-called secondary distributors (that is, those who purchase pharmaceuticals from wholesalers rather than direct from manufacturers) the creeps is a provision in the so-called Final Rule that exempts authorized wholesalers (that is, those who are large enough to buy directly from the manufacturer) from producing them. Small and independent wholesalers fear that because authorized distributors are not required to give them pedigrees, the smaller firms won’t be able to provide their customers documentation from the point of manufacture. For that reason, they fear they could be shut out of business after Dec. 1. The smaller companies argue that the government should either force authorized wholesalers to provide pedigrees to secondary wholesalers, or demand that secondary wholesalers provide pedigree back to the authorized wholesaler only, instead of the manufacturer. There’s another catch: The government’s definition of “pharmaceuticals” is broad. It can include surgical kits and trays, lidocaine and prefilled syringes, according to Jennifer Alfisi, former director of government affairs for the Health Industry Distributors Association, Alexandria, Va. And there has even been talk of extending pedigree laws to medical devices, though that hasn’t occurred…yet. Lawsuits Tangalakis is concerned about the issue, to the point of giving assistance to one wholesaler – Port Washington, N.Y.-based RxUSA – in a class-action lawsuit it initiated against the Food and Drug Administration, which will enforce the Dec. 1 rule. Tangalakis is also spreading the word about a lawsuit filed in July by RxUSA against a number of drug manufacturers and national wholesalers, accusing them of conspiring to shut secondary wholesalers out of the market. Tangalakis has sent letters to lawmakers, in which he pointed out that: 1) the big wholesalers have been reluctant to give companies such as Mercury verification or validation of the drugs Mercury purchases from them; 2) at least one of the big companies, McKesson Corp., has stopped shipping to secondary distributors in Florida; and 3) drug manufacturers have refused to list Mercury as an authorized dealer of record. (No lawmakers have responded.) “We’ve been licensed by the state, and we’re ethical operators of our business,” says Tangalakis. Even if manufacturers won’t consider companies such as Mercury Medical to be authorized distributors, because of insufficient volume, Mercury and others should be considered extensions of the big wholesalers, he says. “Why can’t we, as a licensed pharmaceutical distributor, be audited three or four times a year, so [the government and public] is assured we are buying through an authorized distributor?” asks Tangalakis. In a letter to drug manufacturers, Tangalakis made essentially the same case, calling for them to “assist in influencing a more rational, logical approach, which is a logistically sound distribution channel…incorporat[ing] the following -- manufacturer, authorized distributor of record, distributor, to end user.” Concerns about where it might lead Tangalakis doesn’t dispute the need for the tracking of drugs throughout the supply chain, but he is worried that if current legislation stands, smaller wholesalers will be forced out of business because they cannot produce pedigrees. At least one wholesaler – AmerisourceBergen –has begun offering a pedigree service. For at least $5,000, the company will make pedigrees available to smaller companies out of its Orlando, Fla., distribution center. A company spokesman said the $5,000 fee would help the company recover its cost of providing pedigrees. “We’re not making money on this,” he said. Relatively few wholesalers – less than 50 – had availed themselves of the service at press time. Tangalakis is also worried about the onerous requirements to which pedigree legislation might lead. Procedural packs, for example, might contain multiple drugs. “If we have to authenticate those drugs, how do we do that?” he asks. Tangalakis has one more concern, namely, that the clamor for pedigree will extend to med/surg devices. Thus far, devices have been spared from pedigree legislation, but the topic has been raised. He believes that the FDA’s interest in the so-called unique device identifier, or UDI, does not bode well for device distributors. (See “Got your number,” September 2006 IMDA Update.) And Mercury is already facing a $400 licensure fee from state of Louisiana for the privilege of shipping drugs and devices into that state. In instituting the fee, the state referenced the Prescription Drug Marketing Act of 1978, the same law that has led to most pedigree legislation. |
