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What you need to know now about California e-Pedigree

Where it stands today, what meds are exempt, and what companies have promised to make the date requirements on the pending law.

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Pharmaceutical industry input will be welcomed at the Sept. 11 and Dec. 4 meetings concerning pending e-Pedigree law. "Come tell us how you are doing, where you are running into problems," said Virginia Herold, executive officer of the CA State Board of Pharmacy, which initiated e-Pedigree legislation to protect the public.

Herold called in to Mettler Toledo's Pharma Exchange (July 10-11) in Chicago with an update on California's pending e-Pedigree law.

"Overly complex drug distribution makes investigation involving diversion and counterfeiting difficult," Herold told the audience of 80-plus suppliers, end users and consultants. "That's what drove e-pedigree law in the first place, protection of the public."

Herold cited a recent case where the typical pharmaceutical supply chain model of manufacturer to wholesaler to pharmacy revealed a complex web of one wholesale broker overseeing 28 wholesalers (21 of which were non-licensed in California) and 17 pharmacies.

"Pedigree means a record, in electronic form, containing information regarding each transaction resulting in change of ownership of a given dangerous drug," said Herold, "from sale by a manufacturer through acquisitions and sales by one or more wholesalers, manufacturers, or pharmacies, until final sale to a pharmacy or other person furnishing, administering, or dispensing the dangerous drug."

Most important, the pedigree shall be created and maintained in an interoperable electronic system (hence e-Pedigree), ensuring compatibility throughout all stages of distribution. This means a manufacturer cannot simply adopt a serialization strategy without getting wholesalers and pharmacies on board with compatible technology. Drug manufacturers and repackagers are strongly encouraged to serialize drug products and initiate e-pedigrees as soon as possible, with all participants in the supply chain ready to receive and pass these electronic pedigrees.

"Why is e-pedigree needed?" asked Herold. Drug diversion, drug thefts from supply chain, low penalties for prosecution makes the rewards worth the risk of being caught, recalls finding their way back into the supply chain, and market manipulations and "manufactured" drug shortages to drive up pricing, were some of the reasons cited.

Herold pointed to actual thefts, an Eli Lily warehouse where $75 to $80 million worth of drugs was stolen, a Teva truck stolen with $11.8 million worth of drugs inside, a GSK warehouse for $5 million. Clearly, this is big criminal activity.

Herold shared a recent case where a New York pharmacy purchased $274 million of black market HIV drugs from numerous sources. These were rebottled with fake labels and serial numbers, broken seals, outdated or different meds than were listed on the label. This case represents real danger to a patient now exposed to adverse drug interactions, overdoses, or decline in condition from not getting prescribed treatment.

Where the 2015 e-Pedigree law stands today

Generic and brand manufacturers must pedigree 50% of products by 2015 and the remaining 50% by 2016. (Percentages can be based on unit volume, SKU, or drug product family).

Wholesalers and repackagers must accept and pass pedigrees by July 2016.

Pharmacies and pharmacy warehouses must accept pedigrees by July 2017.


The following products are exempt from California e-Pedigree law

• Radiologic drugs
• Drugs labeled "for veterinary use only"
• Compressed chemical gases
• IV solutions for replenishment, IV solutions used to maintain equilibrium of water and minerals, solutions for irrigation or reconstitution
• Surgical kits containing a device and medical supplies, sealed by the manufacturer
• Kits containing a drug/device, biologic/device, drug/biologic/device that are physically or chemically combined
• Kits containing two or more products packaged together in a single package composed of a drug and device or biologic and device
• Drugs received by state or local government agency from a federal government agency

Definition changes

Some new or expanded definitions in the legislation include:

"Smallest package or immediate container," which must be pedigreed is further defined as the smallest unit made by the manufacturer "for sale to the pharmacy."

3PL or third-party logistics provider is a licensed wholesaler who does take possession of, but not ownership of, drugs. Does not need to append pedigree, but must maintain copies of it.

The term "repackager" has been clarified: a manufacturer must pedigree repackaged items, must reference original pedigree information on repackaged products, must create a unique identification number for pedigree of repackaged items.

Drop shipment has been defined: products shipped from manufacturer to pharmacy; ownership/pedigree goes from manufacturer to wholesaler to pharmacy.

The California State Board of Pharmacy is still working on establishing regulations regarding inference. Inference allows a unique identifier to be applied to a case, pallet or other aggregate without individually reading each serialized unit (saves from breaking down every pallet and case and scanning individual units of sale).

Grandfathering is still to be discussed as well. The board still needs to establish a process where manufacturers, wholesalers and pharmacies can designate drugs already in their possession (perhaps submitting a written list which would be held confidential) when pedigree requirements "kick in."

The Board still needs to address "decommissioning" of a serial number as well. Where and how does the pedigree come to an end? The vast majority of drugs are destroyed by outside contractors, not the pharma manufacturer. What if packaging is damaged to the point the serial number is not readable?

Rules for reporting counterfeits have been established as well. If a manufacturer, wholesaler or pharmacy has reasonable cause to believe that a dangerous drug in, or having been in its possession is counterfeit or the subject of a fraudulent transaction, the manufacturer, wholesaler, or pharmacy shall notify the Board within 72 hours of obtaining that knowledge.

Herold also addressed the dangers of blowing off the California deadlines in the hopes they will be again delayed. "California accounts for at least 10 percent of most drug companies sales in the U.S.," she said, stressing it would be inadvisable to gamble with this revenue.

She also mentioned many companies have also signed on as supporters of the bill, promising in good faith to make the date requirements. These include: Cardinal Health, Genentech, Hospira, J & J, McKesson, Merck, Novartis, Pfizer, Sandoz, Teva and Wyeth.

Herold mentioned there are two meetings in 2012 where input from the industry would be most welcome, which are slated for September 11 and December 4th. Find out more here.

By Jim Chrzan, Publisher, Healthcare Packaging
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