RFID Law Blog

The FDA has announced a new program for sponsors and foreign manufacturers of finishing drug products and active pharmaceutical ingredients (API) intended for human use imported by secure supply chains to apply to participate in a voluntary secure supply chain pilot project. The goal of the pilot program is to allow FDA to determine the practicality of developing a secure supply chain program. 

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The impact of this (see attached), among other things, is that if the FDA chooses to require RFID tags on pharmaceutical products to address e-pedigree and drug safety objectives, retailers that carry pharmaceutical products would have new requirements and obligations if this law is enacted in NY. Different states have introduced, and some have passed similar - but not identical - legislation. This could create an inconsistent network of requirements and standards.

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An increase in government activity affecting the use of RFID and other related SCM technologies in the pharmaceutical and medical device industries is expected in 2009, both in the United States and the EU.  These actions will drive the future of these technologies and their impact on the precision, efficiency, and safety of pharmaceutical supply chains globally.  It will be critical for companies affected by these industries to participate and help shape these government decisions - or risk having harmful decisions made in the next year.

The U.S. Department of Commerce and the European Commission are eager to promote RFID in Europe this spring within the context of the Transatlantic Economic Council.  Following a very successful U.S./EU RFID symposium last fall, both sides have committed to jointly pursue frameworks for advancing transatlantic economic integration to build upon the success of an initial RFID pilot project to demonstrate best practices in other areas including health care and environmental sustainability. 

Companies concerned with how upcoming RFID/SCM requirements will affect their global supply chains have an opportunity to influence the outcome.

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Doug Farry, chair of the firm's RFID practice, will moderate the panel, Meeting California’s Drug Pedigree Requirements and Securing The Global Supply Chain.

The Biotech Supply Chain Academy (BioSCA) will host its inaugural conference on September 11-12, 2008 at the South San Francisco Conference Center.  The conference is designed to provide an exclusive audience of senior-level executives with authoritative insights, best practices and market intelligence about the supply and distribution of biotechnology products. 

The conference program will cover these vital topics:

• Supply Chain Management of the Biotech R&D Product Cycle
• Six Sigma Control of Manufacturing and Service Organizations   
• Information Technology Solutions for Biotech Supply Chain Management 
• Developing Collaborative Resilience in the Biotechnology Supply Chain   
• Regulatory Impacts on the Biotechnology Supply Chain   
• RFID Opportunities for Biotech Applications   
• Collaborative Demand Planning, Rapid Replenishment & Vendor Management Inventory (VMI) Systems   
• Human Resource Staffing and Productivity Management   
• Waste and Transportation Management Services

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Several states, including California and Florida, are pursuing ePedigree requirements that may include RFID. There are also more than 20 states considering legislation to regulate RFID in some capacity. The role of the federal government versus that of the states is important for those in the RFID space to understand and determine how best to address their public policy interests. 

If you’re going to be in Washington, DC on Tuesday, June 17^th, you’ll want to check out “Congress vs. the States,” a business regulatory discussion being held at the McKenna Long & Aldridge LLP office at 1900 K Street NW. The event will be chaired by Lawrence Ebner, a partner at McKenna and presenters will include:

• S. William Becker, Executive Director, National Association of Clean Air Agencies
• Ronald A. Cass, Chairman of the Center For the Rule of Law and Dean Emeritus,Boston University School of Law
• Robin S. Conrad, Executive Vice President, National Chamber Litigation Center
• Michael S. Greve, John G. Searle Scholar, American Enterprise Institute for Public Policy Research
• Douglas T. Nelson, Executive Vice President and General Counsel, CropLife America
• Raymond C. Scheppach, Executive Director, National Governors Association
• David C. Shonka, Principal Deputy General Counsel, Federal Trade Commission

Registration is free, but make sure to RSVP here by June 9^th, as space is limited. You can view the complete agenda here.

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According to the San Diego Business Journal, the California State Board of Pharmacy plans to meet tomorrow, March 25^th, to discuss delaying the implementation of the state-imposed drug e-pedigree requirements, set to take effect January 1^st, 2009.  Meanwhile, the FDA is tasked with having federal guidelines in place by 2010. Doug Farry, a managing director at the McKenna Long & Aldridge office in San Diego, was quoted noting the difficulty of enforcing federal standards: “The FDA was really built to regulate the safety and efficacy of drugs.” 

Whatever the state of California is doing will be significantly affected by similar ePedigree efforts being driven at a national level by the FDA. The FDA is not interested in California and 49 other states having their own, separate ePedigree requirements - so, anything that the FDA does in this arena will likely trump the various state efforts. The biggest challenge for FDA, as well as the state regulatory agencies, is how to enforce it. The FDA does not buy or sell drugs, it simply regulates their safety - so how will it enforce a requirement that everyone in the drug pedigree food chain use RFID or any other technology?

The California State Board of Pharmacy has the authority to extend the deadline for up to two years.

You can read our other posts about the California e-Pedigree developments in California and at the federal level here:

Bio, Pharma Companies Seek Extension to ePedigree Deadline in California

FDA Continues to Push for RFID

Court Blocks RFID-Friendly FDA Rules

Report Concludes Supply Chain Security is Good for Business

Liability Issues with RFID for Drug Security?

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The San Diego Business Journal reported on February 4^th, 2008 that biotech and pharmaceutical companies are ill-prepared to meet California’s January 1, 2009 deadline for instituting ePedigree standards in their manufacturing processes. 

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In order to protect against prescription drug counterfeiting, FDA Commissioner Andrew von Eschenbach reiterated his agency's support for an e-Pedigree program featuring RFID technology at last week's RFID in Healthcare Industry Adoption Summit, held here in Washington, DC. The Commissioner noted that electronic tracking of drugs would be far more secure than simply having a paper trail, saying "FDA can no longer indefinitely delay having pedigrees".

Earlier this month, we saw the FDA's support for electronic drug tracking hit some resistance from federal courts, as noted in this blog before. | Posted By RFIDblogger In Drug Chain Security | Permalink | 0 Comments

RFID Journal has more. 

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The FDA, which has been strongly supporting the use of RFID tags to reduce counterfeiting drugs, saw their Federal ePedigree regulation blocked by the courts. The court agreed with the small drug wholesalers, who argued that the statute required so-called “pedigree” information be transmitted with every wholesale distribution of pharmaceuticals. The court did acknowledge that the statute, exempts so-called “authorized distributors” from the pedigree requirement. Thus, the court said that “authorized distributors” are permitted to sell pharmaceuticals without having to convey any accompanying pedigree information. The requirement, which was scheduled to take effect on December 1, was successfully opposed by small, independent drug wholesalers who claimed it would have been too complicated and costly to implement.

This action by the courts demonstrates a point I have made repeatedly on this blogsite.  Some of those selling RFID products and services are hoping for a "quick fix" from the government to create a market for their products, with government mandates requiring their use in certain situations -- like on drugs.  But without cooperating and collaborating with your customers -- those who will actually have to comply with those requirements, you run the risk of turning potential advocates of RFID into hostile adversaries.  This was simply a lawsuit to delay implementation of the rule due to cost.  Others could raise arguments -- in the press, to policymakers -- that RFID is risky or dangerous or an invasion of privacy.  Or any other argument that has been already been spread by anti-RFID forces.
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We all understand the value RFID technology -- but we now have a report written by two Stanford professors sponsored by the National Association of Manufacturers and IBM. The report is an attribute to the benefits of investing in the security of your supply chain and repeatedly cites the use of RFID technology.

In one cite, a company utilized RFID and GPS into their renewed and updated security program and completely eliminated theft. Another implemented RFID and GPS and improved access to their supply chain data and timeliness of shipping information 90 -100%.

The report was just published August 1. Take a look here.

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The FDA has indicated that they want drug companies to provide an electronic chain of custody that shows where drugs have traveled from manufacturer to patient, to reduce the risk of counterfeiting. RFID has been identified as the FDA's preferred technology for achieving that, although their rule does not specifically require RFID.

One of the unresolved policy issues associated with that move, and I've talked to folks on Capital Hill about it, is who carries liability for the accuracy of the report? If a patient takes a counterfeit drug, and the electronic record is inaccurate for some reason, does the liability and insurance risk fall on the patient? On the drug manufacturer? Their delivery network? The RFID provider? Insurance companies might have an interest in that question.

Same as with manufacturing issues -- RFID is increasingly being used to track expensive or critical parts for airplanes and cars. One reason is to reduce the risk of counterfeit and inferior parts being put on a plane. If the system fails and a plane crashes, who holds the risk? The airline? The RFID system? An insurance company perspective on these questions would be great.

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