FDA Looks to Pilot Projects to Enhance Pharma Track and Trace


The U.S. Food and Drug Administration (FDA) is taking a critical step to further enhance its nascent electronic track and trace system for prescription drugs, which was established as part of the Drug Supply Chain Security Act (DSCSA) of 2013. The DSCSA authorized the FDA to build an electronic, interoperable track and trace system by 2023 to reduce drug diversion and introduction of counterfeit products into the U.S. drug supply chain.[1]

As part of the Act, FDA was required to establish one or more pilot projects with manufacturers, re-packagers, distributors, and dispensers to explore and evaluate methods to enhance the safety and security of the pharmaceutical distribution supply chain. The FDA has now opened a Federal Register to solicit proposals for such pilot programmes.[2]

FDA’s goal is to enhance the agency’s ability to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. To achieve meaningful advances in their technology, the agency is taking a collaborative approach and has requested a proposal for pilot programmes from all members of the distribution chain, including brand owners, packaging companies, wholesalers and technology companies. By using this collaborative approach, the FDA is leveraging the diversity of its supply chain, including large and small entities from all industry sectors.[3]

New technology needed to meet continued illicit drug threat

This pilot programme is coming at a pivotal moment for the FDA. The agency continues to battle the opioid epidemic in the United States and as part of its strategy the agency is focused on stopping the spread of illicit opioids and further securing the legitimate supply chain.

Illicit and counterfeit drugs, including counterfeit opioids, continue to reach U.S. consumers through international mail facilities (IMFs). While the agency continues to increase its enforcement and interdiction activities at IMFs, the task of intercepting illegal, unapproved, counterfeit and potentially dangerous products is truly monumental.

According to FDA’s Commissioner Scott Gottlieb, an astonishing 86% of packages with FDA regulated products screened at IMFs over the last couple of years contained illegal products, including counterfeit and potentially dangerous prescription drugs. Considering that the U.S. Postal Service processed nearly half a billion international parcels in 2017 alone, the potential threat is significant. And mail volume continues to grow at roughly 50 annually.[4]

Another part of the threat is the illegal online sale of opioids. Over the last year, the FDA has sent a series of warning letters to illegal networks operating at least 70 websites, illegally marketing potentially dangerous, unapproved and misbranded versions of opioid medications.

Most importantly, however, the FDA is focused on increasing accountability throughout the supply chain to ensure that every entity within the chain is complying with the law. As a result of its focus to secure the drug supply chain, the FDA, on 12 February 2019 issued its first warning letter under the DSCSA to McKesson for violations of tampering with opioid medication shipments. In addition, the FDA noted other incidents involving medications for several serious illnesses, including HIV, seizures, bipolar disorder and high blood pressure.

The FDA highlighted some serious violations by pharmaceuticals distribution company, McKesson, including one instance when McKesson was notified by a pharmacy that several shipments for potent opioid pills did not contain the correct medications, and the opioid pills were missing, having been replaced with other non-opioid medications. Such a lapse in the track and trace system by the largest U.S. distributor is truly concerning and highlights the need to further tighten the supply chain by making its track and trace system more robust.[5]

Pilot programme details

The FDA is accepting applications for the pilot programme until 11 March 2019, from any and all entities within the pharma distribution supply chain. The agency is looking for new and emerging technologies to further enhance its nascent track and trace system. Amongst the key considerations for pilot projects will be the ability to work within the interoperable, electronic track and trace system the FDA is working to establish by 2023.

The goal of the pilot projects for the FDA is to:

· Enhance package-level product tracing and verification;

· Better identify, manage and prevent the distribution of illegitimate product; and

· Identify efficient ways to electronically exchange interoperable data across the supply chain.

The agency has stated that it is open to accepting multiple pilot projects that meet the established criteria. The agency will accept as many pilot-project proposals as it can manage. However, it is important to note that the FDA will not pay for any aspects of the accepted pilot programmes, but rather participants will be responsible for the funding and resources necessary to conduct the project. Pilot programme timelines will vary based on the technologies proposed, but companies will be required to start their programmes within four months of receiving an acceptance letter, expected to arrive by early to mid-April.[6]

This pilot programme by the FDA could be truly ground-breaking, as the FDA is open to considering all viable technologies and methods to be included in pilot projects, including cutting-edge technologies such as blockchain. The agency has stated that it will look for technologies in various categories, including Product Identifier, Barcodes, Interoperability, and Aggregation. Detailed information on the programme can be found at

https://www.federalregister.gov/documents/2019/02/08/2019-01561/pilot-project-program-under-the-drug-supply-chain-security-act-program-announcement

Sven Bergmann is a Managing Partner at Venture Global and advises brand owners, technology providers and governments on anti-counterfeit strategies, programmes and technologies. Send your comments to SBergmann@VentureGlobal.com.

[1] U.S. Food and Drug Administration (FDA). Drug Supply Chain Security Act (DSCSA). Retrieved on March 4, 2019, from https://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/ default.htm

[2] FDA notice. (2019, February 08). Pilot project program under the Drug Supply Chain Security Act; Program Announcement. Retrieved on March 4, 2019, from https://www.federalregister.gov/documents/2019/02/08/2019-01561/pilot-project-program-under-the-drug-supply-chain-security-act-program-announcement

[3] FDA. DSCSA pilot project program: how to participate. Retrieved on March 4,2019 from https://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/ucm630977.htm; Connolly, K.B. (2019, February 17). FDA looks to pilot projects to enhance pharma track-and-trace .Retrieved on March 4, 2019, from https://www.packagingdigest.com/track-and-trace/fda-looks-to-pilot-projects-to-enhance-pharma-track-and-trace-2019-02-17

[4] FDA Commissioner Scott Gottlieb FDA statement. (2019, February 12). Statement from FDA Commissioner Scott Gottlieb, M.D., on ongoing efforts to stop the spread of illicit opioids, further secure the U.S. drug supply chain and forcefully confront opioid epidemic. Retrieved on March 4, 2019, from https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm631195.htm

[5] Ibid.

[6] FDA. DSCSA pilot project program: how to participate. Retrieved on March 4,2019 from https://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyChainSecurity/DrugSupplyChainSecurityAct/ucm630977.htm; Connolly, K.B. (2019, February 17). FDA looks to pilot projects to enhance pharma track-and-trace .Retrieved on March 4, 2019, from https://www.packagingdigest.com/track-and-trace/fda-looks-to-pilot-projects-to-enhance-pharma-track-and-trace-2019-02-17

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