Life Sciences Alert - April 15, 2008

written by Jayne P. Bultena, Paul T. Kim

Overview

The Prescription Drug Marketing Act was enacted in 1988 to establish, among other things, a system for tracking drugs through the manufacturing and marketing processes. Implementing regulations regarding these pedigree provisions for prescription drugs have been delayed for years. The Food and Drug Administration has issued its own stay on implementation, and a recent lawsuit by prescription drug distributors over the scope of the pedigree requirements has contributed to the delay as well.

The resulting lack of clear of federal criteria for prescription drug pedigrees has created an opportunity for states to pass their own pedigree laws, leading to a patchwork of diverse, often conflicting, state standards. Prescription drug distributors find it increasingly difficult to comply with the multitude of state laws, thus the time is ripe for federal action to create uniform pedigree requirements.

Federal Prescription Drug Marketing Act

In 1987, after reports that there were insufficient safeguards in the prescription drug distribution system to prevent the introduction and sale of counterfeit, adulterated, misbranded, or otherwise substandard or ineffective drugs, Congress enacted the Prescription Drug Marketing Act (PDMA), Pub. L. No. 100-293, which was signed into law on April 22, 1988.

As modified by the Prescription Drug Amendments of 1992, Pub. L. No. 102-353, the PDMA is intended to provide legitimate participants in the drug distribution system with a history of the drug’s source—a “pedigree” of the drug to prevent counterfeit, diverted, or adulterated products from reaching consumers. The PDMA requires wholesale distributors to be licensed by the states in which they sell drugs, and further requires “each person who is engaged in the wholesale distribution of a drug…and who is not the manufacturer or an authorized distributor of record of such drug [to] provide to the person who receives the drug a statement… identifying each prior sale, purchase, or trade of such drug (including the date of the transaction and the names and addresses of all parties to the transaction).”[1] An “authorized distributor of record” (ADR) is defined as a distributor with whom a manufacturer has established an “ongoing relationship” (described in implementing regulations as a written agreement) to distribute such manufacturer’s products.[2] Secondary distributors are those distributors who are not ADRs (i.e., the distributor has no written agreement with the manufacturer to distribute the manufacturer’s products). The PDMA applies to all human prescription drugs, medical device kits with prescription drugs, and active pharmaceutical ingredients.

The PDMA required FDA to promulgate implementing regulations with respect to the pedigree provisions.[3] The agency issued a proposed rule in 1994 and a final rule in 1999, which is stayed as the result of a pending lawsuit by secondary prescription drug distributors. Specifically, the 1999 final rule requires that any entity which is not an ADR must, at sale, provide to the distributor information about the drug, including “the business name and address of all parties to each prior transaction involving the drug, starting with the manufacturer; and the date of each previous transaction.”[4] In their lawsuit, secondary wholesalers argued that they could not receive ADR status from the manufacturers, but that the primary wholesalers (ADRs) would not provide them with a pedigree of the drug traceable back to the manufacturer. The Federal District Court in Eastern New York enjoined implementation of the pedigree requirements in 2006. The FDA appealed in April 2007, claiming that congressional intent requiring pedigree be traced back to the original manufacturer is clear in the PDMA.[5]

Pending a final decision in the court case, FDA has indicated that it will not initiate enforcement actions against any wholesaler for failing to provide a pedigree that goes back to the manufacturer.[6]

FDA has also concluded that an electronic pedigree should “accomplish and surpass the goals of the PDMA and is potentially a more effective solution…than a paper pedigree.”[7] In a Counterfeit Drugs Task Force report, the agency even noted that it had (separate from the court ruling) delayed the effective date of the PDMA provisions until Dec 1, 2006 because stakeholders had informed the FDA that “industry would adopt electronic track and trace technology by 2007. When widely adopted, this technology could create a de facto e-pedigree…which could meet the statutory requirements in section 503(e) of the Act.”[8]

California’s Electronic-Pedigree Statute

In the absence of settled federal pedigree requirements, at least twelve states, including California, have adopted their own pedigree and wholesaler licensing statutes.[9] Many of the state laws require licensure of wholesale drug distributors, restrict sale of prescription drugs to licensed entities, and require each person who is engaged in wholesale distribution of prescription drugs to provide a complete pedigree of the drug. The California statute provides the leading, most high profile example of electronic pedigree requirements. Table 1 summarizes the California requirements, implementation of which has been delayed until January 1, 2011 by the state Board of Pharmacy.

Table 1. California Electronic Pedigree Requirements

Outlook for Federal Legislation

The development of a multitude of state laws with diverse, potentially conflicting pedigree requirements makes it increasingly difficult for prescription drug manufacturers and distributors to comply the law, and, contrary to the intent of the PDMA, it may also disrupt patient access to their medications.

Congress has the opportunity to enact federal electronic-pedigree legislation which would leapfrog current piecemeal efforts and preempt state laws with a coherent modern regulatory framework. Congress is, in fact, moving in this direction. Representatives Steve Buyer (R-IN) and Jim Matheson (D-UT) reportedly plan to introduce bipartisan legislation in the House which would call for:

• serialization for “at-risk” drugs at a time determined by the FDA;
• pedigree traced back to the original ADR; and
• preemption of conflicting state pedigree laws (but allowing individual state licensing and collection of fees to continue).

Senator Edward Kennedy (D-MA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, is also reportedly drafting similar legislation which would:

• require pedigree to be traced back to the original ADR;
• preempt all state pedigree and licensing laws; and
• include bonding requirements.

The House legislation is expected to be introduced later this spring. Congressmen Buyer and Matheson are members of the Committee on Energy and Commerce, the committee of jurisdiction, which elevates the bill’s viability. Buyer has also reached out to Chairman John Dingell (D-MI) to attempt to develop consensus legislation. In the Senate, Chairman Kennedy is also well situated to advance pedigree legislation. However, consensus among Members and stakeholders alike would be essential for any legislation to advance or be enacted this year, promising that prescription drug security issues will remain a priority following the November 2008 election and the advent of a new Administration. This is particularly true given the recent finding of significant adulteration in some imported heparin. Use of this contaminated drug resulted in as many as 60 deaths and countless other serious allergic reactions in patients. The heparin incident elevates pharmaceutical security and counterfeit issues as an oversight concern for Congress and the public.

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