Rx Product Serialization: Still No Silver Bullet Solution

Tim Marsh, Managing Director, MCL, January 2014

The original Post can be found here - CLICK

Industry and regulators enjoyed a very brief collective sigh of relief near the end of 2013 with the passage of the Drug Quality and Security Act (DQSA h.r. 3204). Throughout 2014 we can expect to see renewed activity as supply chain stakeholders re-engage to move to federal compliance with the preemption of state pedigree laws, namely California. Expect a flurry of activity as 2014 closes with the first milestone of the DQSA Transaction History taking effect January 2015.

What will this mean for patient safety?

No doubt over time we should expect supply chain security to improve and patient safety will experience positive effects. Regulations like the EU FMD, US DQSA, China eCoding and Turkish ITS will prove most effective at detecting and mitigating systemic counterfeit supply chain breaches. Unfortunately there is a diversity of fraudulent activity with pharmaceuticals and no ceiling on agility and innovation employed by the counterfeiters.

Concerns

One trend that I believe is growing based on personal experience is the small yet immensely profitable practice of Instance Counterfeits. I use instance to refer to the occasional or extremely low volume falsified product, in this case medicine. Counterfeiters and rogue parallel traders have learned that exploiting therapeutic areas, other than the more common erectile dysfunction therapies, is highly profitable even with very little market penetration. That is, they are focusing on very small volumes of moderate to high priced medications.

Why?

Opportunity coupled with attractive profitability. Some oncology medications can cost several thousand dollars for a 30 day supply. Due to low volumes and difficult forecasting specialty drugs might also not be on hand for immediate dispensing due to the high carrying cost for pharmacies and distributors, in effect creating an artificial scarcity. A counterfeiter can fabricate a convincing looking package and drug for a few dollars. Some counterfeiters even re-use legitimate packaging making their profitability even better and the fake that much more convincing. Buying medications from questionable sources because of the price is dangerous for those of us familiar with the risks. Unfortunately there is a real demand[i]. Brand owners should consider these instance events as more than a nuisance. 

Additional Concern 

Proposed US Federal Legislation such as The Personal Drug Importation Fairness Act (h.r. 3715) will be a boon for counterfeiters looking for growth. This act would permit them to move their falsified products into the lucrative US market virtually unchecked.

Result & Recommendation

How likely then is this type of consumer to be saved from a counterfeit by Rx Product Serialization and enhanced traceability? Not likely in my opinion as evidenced by recent counterfeit cases such as the Avastin case in the US and the Sunitinib recalls for Germany and Romania in 2013[ii]. Both are good cases of opportunity and a network of legitimate and semi-legitimate suppliers willing to assume risk and pass it along to patients in the interest of profit. Serialization would not have prevented these instances. Thus, serialization is not a silver bullet solution to the problem of counterfeits in the legitimate supply chain. 

Should h.r. 3715 pass, brand owners would be wise to implement technologies and supply chain security programs targeted at protecting unsuspecting patients. It may be time to seriously consider putting product authentication capabilities directly into the hands of US patients, in particular for small volume – high priced specialty medications. This is an aspect of brand protection and anti-counterfeiting most US pharmaceutical brand owners have been unwilling to consider for fear of alarming the patients and potentially loosing share.

Faced with the fact that agile and innovative counterfeiters will continue to exploit supply chain weaknesses in this manner, the industry and regulators need to manage expectations of the patient population. Furthermore, the need for brand owners to employ anti-counterfeiting and brand protection technologies still remains even in a serialized pharmaceutical world.

---

[i] http://www.cancerworld.org/Articles/Issues/39/November-December-2010/Editorial/438/Fake-drugs-pose-a-threat-to-Europes-cancer-patients.html

[ii] http://www.anm.ro/anmdm/en/_/COMUNICATE%20DE%20PRESA/CP_Sutent_EN.pdf

Recognize when you got it right!

How often to you pause to think back on your personal or professional decisions over the previous period and reflect on the outcomes?

You should! Why? Because it can be a source of motivation and inspiration. All to often we're given plenty of reasons as to why we're not going to see that promotion or raise. Or we needlessly reflect on the decisions that resulted in the opposite of our efforts.

Yes there's something to be said about learning from one's mistakes. As with most things in your life, balance is a good idea. So balance out with some personal recognition. Celebrate, even if just for a few minutes, mentally what went your way and why.

For example, earlier this year at around pay raise time I contemplated purchasing a new car. Something new, fresh and exciting. I didn't need a new car. It would have been a nice reward to myself for all the work I'd done the previous year. What held me back from that significant purchase was the uncertainty in my current role. I was icing on the cake and I knew it. I was most certainly underemployed - underutilized on talent and skills - I had to seek out challenge myself. My functional area was extremely specialized and not valued by our divisional VP. And, I only really enjoyed about 1/3 of my responsibilities.

Turns out I was the target for head count reductions I had suspected. This made the notification meeting with my manager very easy and constructive since I was already mentally prepared. It was time to move on.

So, yes it was wise not to purchase that shiny new auto and remain without a car payment. Thank you self!

That is of course simply a material win. I've come to recognize I made a much more momentous decision years ago on my career. I didn't set out to reinvent myself. But I did start to put time and effort into developing a strategic network. I've blogged about this before in the event you're curious. However losing my job made the satisfaction of taking such a good decision all the more sweet. On my exit I had a wealth of colleagues in my network who offered to help me find a new role - I didn't even have to ask.

My next big decision, most recently, was to reject offers to interview and simply jump back into a large company. When it comes to starting my own company the jury is definitely still out. It has been very exciting, totally liberating and there are so many possibilities and paths I can take. None of which were ever an option employed by a large firm in contraction mode. If I do fail I know I won't regret taking this risk and betting on myself.

Give yourself credit, when it's due, for sound insightful personal and professional decisions.

The Pros and Cons of Specialization - Be Wary!

I've been a long-time fan of science fiction author Robert Heinlein. His observation on specialization, and that it's for insects and not
humans, often comes to mind as I reflect on recent events. I think it's worth keeping in mind and recognize what specialization can and can not do for you.

In general I believe specialization is a good thing. How far you take your particular specialty is entirely dependent on where it is you want to go. Simply stated, a marine biologist who is more than happy to study and teach about the inner workings of single celled animals in the Mississippi Delta for the majority of their life is an extreme example of specialization. This isn't a fictitious example - I know of such a person. This individual has a passion for discovery and finds that one lifetime is probably inadequate to uncover all the mysteries and make sens of them for the world. This individual might not have any strong desires to branch out into other areas of biology, and is perfectly comfortable with their scope of study.

Consider the business world however and the above example. The above type of specialty is dangerous if to much time is spent on it in the course of a career where the ultimate goal is to lead. Or, be given the opportunity to use their skills and acumen in other areas. Such focused specialty is almost doomed to confine the individual to a very narrow band of growth potential.

In reality there is nothing inherently wrong with focused specialty, but one should be aware that it can happen quite naturally without the individual realizing it. Then later, years passed, the individual could find himself limited in the opportunities available to him. I know of such individuals. One manager I know got exactly what he wanted, a prestigious position managing a large organization. The problem he has now is he has no where to go. He's reached his pinacle in his field and isn't recognized for anything else but leading a certain type of organization. Furthermore his management skills and capabilities fall short of what one would expect from an enterprise leader because what got him to where he is was solely due to technical competence, not leadership competence. He's socially incapable of engaging with colleagues and building trust. So he's limited in that he doesn't have followers and isn't recognized in his field as a true leader other than in the purely technical sense.

My message to you is to be wary of specialization. What Heinlein really meant with his idea is that specialization is a quick path to extinction, or in the business sense, irrelevance. In my view a generalist with certain strengths in specialties is probably the better route if you want to be considered for roles of greater responsibility and diversity.

I believe you can focus and explore a specialty and also develop a broader set of expertise and capabilities. Doing both, not only can win you rewards and opportunities in the short term, it can set you up to be able to exploit diverse opportunities in the future.