Pedigree for prescription drugs

Summary of provisions

Section one amends section 270 of the public health law by adding a new subdivision 15 which defines the term pedigree.

Section two amends the public health law by adding a new section 280-a which provides that every manufacturer shall establish and maintain a Pedigree for each prescription drug, and every wholesaler, pharmacy or other person who furnishes or dispenses a prescription drug shall maintain a pedigree for each prescription drug. This section also provides certain definitions and requires a pedigree to be in a form and contain such information as shall be determined by the department of health (the department) in consultation with the department of education (SED), including certain minimal information outlined in the section. The section further provides that each pedigree shall include every change of ownership of a prescription drug from its initial manufacture through to its final transaction to a pharmacy or other person for furnishing, administering, or dispensing the prescription drug, and that the pedigree shall track each prescription drug at the smallest package or immediate container distributed by the manufacturer, received and distributed by the wholesaler or repackager, and received by the pharmacy or another person furnishing, administering, or dispensing the prescription drug.

Certain transactions, including intracompany sales or transfers, prescription drugs received by the state or a local government entity from a department or agency of the federal government specifically authorized to deliver prescription drugs to the state or local government entity, the provision of samples by a manufacturer's employee to an authorized prescriber provided the samples are dispensed without charge only to a patient of the prescriber, are exempt from the pedigree requirements. If a manufacturer, wholesaler, or pharmacy has reasonable cause to believe that a prescription 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 department and SED within 72 hours of obtaining such knowledge.

Every pedigree shall be maintained for a period of three years, or a reasonable period of time as determined by the commissioner in consultation with the department of education and shall be made available for inspection by the department and SED. A pedigree shall be maintained in an electronic pedigree tracking or alternative system determined by the department in consultation with SED to be feasible. The provisions of this section shall become operative on January 1, 2016 (the pedigree effective date), provided that the department in consultation with SED shall issue one-year extensions of the pedigree

effective date if the electronic pedigree tracking or alternative system is not feasible by the pedigree effective date. Certain outlined criteria shall be considered in determining the feasibility of the system used.

A wholesaler or other person furnishing a prescription drug shall not sell, transfer, distribute or deliver a prescription drug without providing a pedigree, or acquire a prescription drug without receiving a pedigree, commencing on July 1, 2016, or if an electronic pedigree tracking or alternative system is not feasible by the pedigree effective date, such date as the department in consultation with SED shall determine in its discretion that the provisions of this paragraph shall become operative.

A pharmacy or other person furnishing or dispensing a prescription drug shall not sell, transfer, distribute or deliver a prescription drug without providing a pedigree, or acquire a prescription drug without receiving a pedigree, commencing on July 1, 2017, or if an electronic pedigree tracking or alternative system is not feasible by the pedigree effective date, such date as the department in consultation with SED shall determine in its discretion that the provisions of this paragraph shall become operative.

The provisions of this section that are inconsistent with federal legislation or a federal regulation governing the form or content of pedigree or the standards and technologies for the identification, validation, tracking and tracing and authentication for prescription drugs shall become inoperative upon the effective date of such federal legislation or the adoption of such federal regulation. If the federal Food and Drug Administration enacts any rule or standard or takes any other action that is inconsistent with any provision of this section governing the form or content of pedigree or the standards and technologies for the identification, validation, tracking and tracing and authentication for prescription drugs, such provision of this section shall be inoperative.

This section provides that certain units of prescription drugs in the possession of a wholesaler or pharmacy, or of a manufacturer, for which the manufacturer does not hold legal title on the pedigree effective date shall not be subject to the pedigree requirements.

Any person who violates any provision of this section shall be subject to a maximum fine of $2,000 per violation.

Section three provides the effective date.

Justification

The marketing of counterfeit drugs has become prevalent throughout the United States as well as around the world. The World Health Organization (WHO) estimates that counterfeit drugs make up 10% of all drugs sold worldwide, with the percentage much higher in developing countries. January 2009 Report by the American Council on Science and Health, "Counterfeit Drugs: Coming to a Pharmacy Near You with an Update for 2009" (ACSH 2009 Report). According to the National Association of Boards of Pharmacy (NABP), counterfeit drug sales accounted for $75 billion in global sales in 2010, with an estimated 1 to 2 percent of drugs in North America being counterfeit. Moreover, counterfeit drugs have contributed to the

increasing drug resistance of the most deadly infectious diseases such as HIV/AIDS, tuberculosis and malaria.

Despite the view that the U.S. drug supply is among the most secure in the world, the growing size and sophistication of counterfeit drug rings have allowed them to penetrate the legitimate drug supplies of the United States. In the last five years, counterfeit drug investigations by the Office of Criminal Investigations of the Food and Drug Administration (FDA) have increased almost ten-fold, from 6 in 2000 to 59 in 2004.

There is, however, no way to know the true degree to which counterfeit drugs have contaminated our drug supply. Most of the incidents go undetected since the evidence is usually destroyed when the drug is consumed and the results of taking the counterfeit drug are blamed on other causes, such as incorrect diagnosis, or in the case of HIV/AIDS further complications and death are expected. We have recently experienced two highly publicized examples of counterfeit drugs: Lipitor tablets used to lower cholesterol, where in New York State alone, in 2005 New Yorkers received an estimated 100,000 dosage units of counterfeit Lipitor; and Procrit, an injectable drug used to stimulate red blood cell growth to treat sever anemia and anemia related to treatment for HIV/AIDS. Counterfeits of other well-known brands as well as drugs used to treat critically-ill patients were found distributed in U.S. in the last few years to hundreds of thousands of unwitting patients, including:

*Combivir, used to prolong the life of HIV/AIDS patients by preventing the virus from reproducing--replaced with another HIV medication that can cause fatal allergic reactions

*Serostim, a human growth hormone used to prevent HIV/AIDS patients from wasting-replaced with dangerous levels of a fertility drug

*Celebrex, used to treat arthritis--replaced with vitamins

*Viagra, used to treat impotence--over 700,000 counterfeit pills were manufactured

*Zyprexa, used to help prevent hallucinations and delusions in schizophrenic and bipolar patients--replaced with aspirin

*Neupogen, an injectable used to boost the immune system of cancer patients-replaced with saline

ACSH 2009 Report. In addition, there have been multiple incidents involving counterfeit versions of Tamiflu, used to treat seasonal or avian flu. Aside from the obvious direct result of receiving the counterfeit medicine, treatment from counterfeit versions may also increase the .risk of causing the virus to develop a resistance to the Tamiflu drug.

The nature of the drug supply system in the U.S. makes our drugs ripe for diversion and counterfeiting. The path of a drug from manufacturer to distributor to pharmacy more often than not is not a single or linear one; in fact, a substantial portion of our drugs flow through a complex network of distributors, intermediaries and secondary

wholesalers. When wholesale distributors buy drugs without knowing all the previous owners of the product, the integrity of the product cannot be assured. This was the case for Long Island youth Timothy Fagan, who was only 16 years old when he took a single vial of what he thought was Epogen, a medication to increase red blood cells, to help him recover from a liver transplant. However, at some point in the distribution of the drug from manufacturer to pharmacy the drug had been tampered with and the drug was a counterfeit. Timothy suffered through several months of excruciating pain before his physicians discovered that he had received a counterfeit medication and is now forced to take medication for the rest of his life.

Although a federal law, the Prescription Drug Manufacturing Act (PDMA) was enacted more than 20 years ago to assure the safe and effective distribution of prescription drugs and to minimize the risks to consumers from taking counterfeit or adulterated drugs by, among other things, imposing a requirement on wholesale distributors to maintain either a paper or electronic pedigree of prescription drugs, the FDA delayed the effective date for implementing the regulations relating to the pedigree requirements until December 1, 2006. At the request of a group of secondary wholesalers, the federal district court for the eastern district of New York in December stayed the effective date of certain of the pedigree requirements.

To better secure the drug supply system pending implementation of federal law, we must adopt at the state level a multi-layered strategy that combines establishing pedigree requirements in the context of the developing anti-counterfeit technology, in addition to strengthening the licensing requirements of wholesalers and increasing penalties for those who violate the law.

Three states, Idaho, North Dakota and South Dakota, signed into law legislation that tightens licensure requirements of wholesalers and establish pedigree requirements for prescription drugs, requiring their respective boards of pharmacies to set a target date for implementation of electronic pedigree technology to track prescription drugs through the supply chain. In addition, nineteen states, including California, have enacted laws or regulations establishing pedigree requirements. The Food and Drug Administration Amendments Act of 2007 includes a provision that requires the development of a standardized numerical identifier be applied to a prescription drug at the point of manufacturing and repacking at the package or pallet level, sufficient to facilitate the identification, validation, authentication and tracking and tracing of the prescription drug.

It is the intent that a standardized numerical identifier, when available, established at the point of manufacture and contained in the electronic pedigree, will allow us at that time to track and trace the movement of prescription drugs throughout the entire distribution system, from manufacturer, to wholesaler, to retail pharmacy or other person furnishing, administering or dispensing a prescription drug. In order to track prescription drugs all the way through the distribution system to the retail pharmacy, it is important that the electronic pedigree tracking or alternative system use technology that includes each product's standardized numerical identifier at the point of manufacture and that allows the tracking to occur at the retail level.

It is acknowledged that while some of the technologies that would allow us to track the movement of prescription drugs throughout the distribution system have been developed, remaining technologies necessary to fully accomplish such tracking are currently being developed in the industry. To ensure that the electronic pedigree tracking or alternative system required by this bill accomplishes the intent of the legislation, it is important that the system be determined to be acceptable by the department, in consultation with SED. In order for the system to be determined "feasible," it is critical that the system use a standardized numerical-identifier at the point of manufacture for each prescription drug, using state of the art technology, be readily available with respect to all prescription drugs, be compatible with, and provide information that can be read by and in a format and architecture that is standardized, nonproprietary, and widely available and uniformly used by, manufacturers, wholesalers and retailers, including chain and independent pharmacies and hospital pharmacies, for the electronic pedigree of prescription drugs, and that it be interoperable among all members in the distribution system. While the electronic pedigree tracking system that is currently being developed is sometimes referred to as "track and trace," the legislature recognizes that the system that is ultimately determined to be "feasible" as provided in the bill may be referred to as something different than a "track and trace" system or may be in a different format. Accordingly, the bill refers to the system as an "electronic pedigree tracking or alternative system." It is the intent in all events that the pedigree system that is ultimately determined to be feasible be electronic.

The legislature further acknowledges that the FDA is in the process of developing standards for identifying, validating, tracking and tracing, and authentication for prescription drugs, particularly a standardized numerical identifier to be applied to a prescription drug at the point of manufacture and at the package level. The bill recognizes that in determining the feasibility of the electronic pedigree tracking or alternative system, such system must at minimum be consistent with federal standards for a standardized numerical identifier. In its January 2009 Guidance for Industry, "Standards for Securing the Drug Supply Chain Standardized Numerical Identification for Prescription Drug Packages,' the FDA provided guidance for standards for prescription drug standardized numerical identifiers at the package level. For that purpose, the FDA considers the package to be "the smallest saleable unit placed into interstate commerce by the manufacturer or the repackage for sale to the pharmacy or other dispenser of the drug product." The industry continues its efforts to develop a system that will meet the needs of all members in the distribution chain as well as the standards for the technologies to identify, validate, track and trace, and authenticate prescription drugs through the entire distribution chain.

A pedigree shall be maintained in an electronic pedigree tracking. Or other alternative system beginning January 1, 2016 (the pedigree effective date), provided that the department, in consultation with SED, has determined that the system is feasible at that time. Pending determination by the department, in consultation with SED, that the electronic pedigree tracking or alternative system is feasible, the bill does not require the acquisition or adoption by any member of the distribution system (namely, manufacturers, wholesalers and retailers,

including chain and independent pharmacies and hospital pharmacies, and other persons furnishing, administering or dispensing a prescription drug) of any interim technology to comply with the electronic pedigree requirements of the bill. Rather, the intent of the bill is to require that members of the distribution system utilize the technologies they currently utilize (or intend to utilize regardless of the enactment of this legislation) in conducting their businesses in accordance with business practice and federal and state laws in effect in order to meet the electronic pedigree requirements set forth in this legislation. In fact, in an effort to provide additional time and flexibility for the industry to meet the electronic pedigree requirements set forth in this legislation, the electronic pedigree provisions requiring compliance by wholesalers or other persons furnishing a prescription drug do not become operative until July 1, 2016, and for pharmacies or other persons furnishing or dispensing a prescription drug, July 1, 2017. In each case, the bill allows the department, in consultation with SED, to further extend-the applicable compliance date as it shall determine in its discretion in the event that the electronic pedigree tracking or alternative system is not determined to be feasible on the pedigree effective date. By providing for a pedigree effective date of January 1. 2016 and phase-in dates of compliance for wholesalers and retailers of July 1, 2016 and July 1, 2017, respectively, the legislature expects and intends that the industry will have more than sufficient time to meet the electronic pedigree requirements set forth in this legislation. In addition, the bill's implementation dates provide consistency with the dates of compliance required by California's electronic pedigree law.

This bill will establish a system to help ensure that drugs that enter the market and purchased by consumers will be unadulterated by counterfeiters. By establishing a system for electronic pedigrees and establishing criminal penalties for violations of this article, we will better ensure that the drugs we purchase will be safe. Since the bill provides that all manufacturers establish and maintain an electronic pedigree for each prescription drug, and all wholesalers, pharmacies and other persons furnishing, administering or dispensing a prescription drug maintain an electronic pedigree for each prescription drug, the bill will avoid facing the same legal challenge by secondary wholesalers that the FDA faced in the federal district court.

Without enacting legislation at the state level to address the weaknesses inherent in our drug supply system, we will continue to leave the public vulnerable to individuals who are willing to harm, and even kill, people for profit.

Legislative history

Similar to: S.5290-C, 2007 and 2008 prior to revisions.

Fiscal implications

None to the state.

Effective date

This act shall take effect on the one hundred and eightieth day after it shall have become law. The department, in consultation with SED, shall promulgate rules and regulations, issue foams and take any other action necessary to implement the provisions of this act on or before the pedigree effective date.