Senior Manager, Health Research Institute, PwC USMarch 06, 2020
HHS’ Office of Inspector General (OIG) found that in a sample of 44 high-risk drugs, ownership of nearly all of the drugs could be traced through the supply chain, but OIG was unable to trace the physical movement for almost half of the products.
In a report released last month, OIG traced lot-level drug products from the dispenser, such as a pharmacy, back to the manufacturer, focusing on 10 high-risk Medicare Part D drugs and high-risk dispensers.
OIG selected drugs it believed to be at high risk for diversion, counterfeiting or theft, and the pharmacies were identified as high risk if they dispensed drugs in combinations “that could lead to severe drug-to-drug interactions in patients,” OIG wrote.
OIG sampled four dispensers for each of 10 drugs and included all drug codes associated with the drug product name, brand alternatives and any generics, resulting in 44 total drugs traced.
The drugs were largely for chronic diseases such as dyslipidemia, diabetes, rheumatoid arthritis and respiratory conditions as well as therapies to treat HCV and HIV.
OIG requested tracing information from each party involved in the supply chain, including the manufacturer, the wholesale distributor and the dispenser. Among the 44 drugs, OIG was able to trace the ownership for 37. Among the remaining seven, six had mismatched or missing data and the ownership for one product could not be traced because the wholesale distributor “refused to provide tracing documents,” according to the report.
Among the 44 drugs, 21 lacked information to track their physical movement through the supply chain, meaning that OIG was unable to find shipping location information from the parties that own the drug and from the third-party logistics providers that store or ship the drugs on behalf of the owners.
According to the OIG report, the 2013 Drug Supply Chain Security Act (DSCSA) does not require third-party logistics providers to be listed on the tracing information.
“Knowing a drug’s physical movement through the supply chain expedites investigations by FDA, State, and other investigators and helps them ensure that adulterated or mishandled drug products do not end up in the drug supply,” OIG said.
Without data on the physical movement of a drug in the supply chain, the FDA’s investigations and efforts to identify potentially harmful drugs could be delayed or impeded, OIG concluded.
HRI impact analysis
Under the 2013 Drug Supply Chain Security Act (DSCSA), pharmaceutical companies are required to affix labels to their products allowing them to be tracked through the supply chain. Drugmakers are also required to pass on information about the history of the drug to their trading partners.
Based on its findings, OIG’s recommendations included additional steps the agency could take to better track the physical movement of a drug that would engage third-party logistics providers.
Specifically, OIG suggested that the FDA seek legislative authority “whether through an amendment to the DSCSA or through rulemaking,” to obtain information on shipping locations of trading partners or the identities and addresses of third-party logistics providers.
Last year, the FDA announced a pilot program that would use blockchain technology to address potential gaps in how regulators and companies keep counterfeit drugs out of the supply chain. The pilot began in August with 20 stakeholders, including companies and health systems.
Blockchain technology could link stakeholders in the supply chain to a decentralized network and allow users to authenticate the transactions. HRI identified multiple use cases for blockchain technology in the drug supply chain, including its use to improve the transparency and traceability of a drug by allowing all stakeholders to more seamlessly share information.