Anti-Counterfeit Drug Initiative--Public Meeting

PANEL 5

MR. TAYLOR: And I would like to ask the fifth panel to please come down to the table.

The first presentation will be by John Roberts and John Terwilliger from Uniform Council Code.

MR. TERWILLIGER: Good afternoon. My name is John Terwilliger. I'm the Vice President of Market Development at the Uniform Code Council. I would like to thank the FDA for this opportunity to talk about drug counterfeiting.

Counterfeit drugs are harmful to patients and costly to the health care industry. It is an issue that the Uniform Code Council or the UCC takes very seriously.

I would like to provide you with some information about the UCC and highlight some of the global tools we have available that can help fight counterfeiting today and in the future.

For 30 years the Uniform Code Council is a recognized world leader in standardizing bar coding in electronic commerce that enables unique and accurate identification to the global supply chain. We are a neutral, not-for-profit global standards organization. Our mission is focused on working with users to develop open multi-industry, technology neutral standards that improve the way business is conducted around the world.

Our solutions have brought tremendous benefits to businesses and consumers alike. Our organization is best known for the development of the ubiquitous universal product code, or UPC, which we commercially introduced in 1974. The UPC has had a dramatic impact on business and has been recognized as one of the most important innovations in the history of commerce.

As use of the UPC grew, Uniform Code Council expanded this technology to address other business processes. Today the UCC provides a complete suite of physical identification electronic commerce standards that can be used in any industry to identify items, including all levels of packaging, logistics units such as pallets and other shipping containers, assets and also locations.

While my presentation will be focused on UCC tools that are currently available to address any counterfeiting, I want to note that UCC has launched a new entity named EPC Global. This new organization will lead the worldwide commercialization of the breakthrough electronic product code or EPC that has been researched and developed at the MIT Auto-ID Center. EPC technology will be complementary to our existing standards and provide greater ability to combat counterfeit drugs.

While the UPC was originally developed for the U.S. grocery industry, its dramatic success quickly generated interest from other industries both here and around the world. The technology behind the UPC became the basis of the global EAN/UCC system, a system of open, multi-industry supply chain standards. The following information demonstrates the global strength of the EAN/UCC system.

Our global standards are used by over 1 million members worldwide, and these would be primarily companies, distributors, et cetera, and other organizations. They are used by 23 major industries including health care to conduct business efficiently in 141 nations. These standards are at work in the hospital setting, pharmacies, health care manufacturers, distributors and stores for over-the-counter health care products today.

Our system is well established, provides a global user base and offers a broad range of integrated solutions to facilitate accurate, unique item identification. These are the same reasons the FDA, in March 2003, incorporated the standards of the EAN/UCC system into its proposed standard to reduce medication errors and save patient lives.

As I mentioned, the EAN/UCC system provides tools that can combat counterfeiting of drugs. For logistics we offer the SSCC or the serial shipping container code that uniquely identifies logistics for like pallets, containers and mixed cases as they move from point to point in the global supply chain. For applications that require identification of a case, intermediate pack or a unit-of-use, companies can utilize the global trade item number or GTIN with a serial number. GTIN plus serial number ensures global unique identification of that specific item anywhere in the supply chain. These tools are already in use and available today.

Implementation can be expedited quickly, leveraging existing systems and infrastructure. Most importantly, the industry can begin addressing and combating counterfeit drugs now.

The first layer to combat counterfeiting for the health care industry is to continue to identify items with the global trade item number which carries the national drug code. The global trade item number is a unique identifier for trade items, as I mentioned before, used in 141 nations around the world. GTIN is the de facto identification standard for pharmaceutical items worldwide.

Most barcodes that are used in the marketplace only carry the GTIN. However, there is often a need to provide other information specific to a particular item or set of items. Application identifiers allow companies to include secondary information about their product. Application identifiers are another important tool in the EAN/UCC system to combat counterfeiting. Over 100 different application identifiers are available to provide additional information such as lot numbers, serial numbers and expiration dates.

The GTIN combined with a serial number and a lot number can identify all packages from individual units-of-use to cases with precision. The GTIN, serial number and/or lot number can be bar coded now with available commercial equipment.

The UCC has worked with the health care industry to develop small barcode size for end of use packages, and this is an example on the screen. The result of this collaboration is reduced space symbology or RSS, a globally recognized standard. RSS symbols can be printed, scanned and verified, using readily available commercial equipment. RSS is currently implemented by the pharmaceutical industry's largest and best known companies. It is being used today.

The use of reduced space symbology on small units-of-use items is having a positive and significant impact on global health care, enables accurate and complete identification of pharmaceutical products right down to the lowest unit-of-use to reduce medication errors. By improving product identification, product safety and traceability will be enhanced and inventories will be better managed.

I would like to discuss how our standards ensure the accurate movement of shipments between trading partners, such as between the manufacturer and the distributor and between the distributor and the health care institution. The second layer to combat counterfeiting is the SSCC, as I mentioned before. The SSCC is an individual license plate for logistics units and it is the global unique identifier of logistics, and it can be used throughout the entire shipping process between all points.

When a logistics unit is broken up, the SSCC is discarded. If a company receives a shipment of products that is without a valid and accurate SSCCs, the questionable shipment can be immediately quarantined and investigated.

This slide displays a label on a logistics unit. The SSCC is the large barcode at the bottom. The SSCC is in wide commercial use.

Let me give two well-known retain examples. Federated Department Stores, which includes Macy's and Bloomingdale's, has successfully used the SSCC since 1994. The SSCC moves merchandise into stores more quickly and cost efficiently and reduces shrinkage. Federated receives and routes 50 million cartons annually. The use of the SSCC in tandem with EDI, 856 advance ship notice, electronic data interchange, has increased efficiency, reduced cost and increased accuracy while providing excellent track-and-trace capabilities.

As mentioned earlier, there are a number of retail products that are widely counterfeited, mainly that would include designer clothing, luggage, leather goods, and also fragrances, so it is a major issue in that industry also.

Sears is a second example of the commercial use of the SSCC. Every year 35 million packages from over 1,000 vendors are moved through a 870 plus store system, or approximately 5,000 cartons per hour in seven distribution centers here in North America. The SSCC has brought efficiency and effectiveness in moving this vast quantity of diverse products.

In conclusion, Uniform Code Council offers several recommendations to this panel. The health care industry should fully adopt and implement the global standards of the EAN/UCC system. Our solutions will help reduce medication errors in their equally powerful enabling unique identification that can combat counterfeiting. Full adoption of these standards will build upon the FDA's proposed rule to reduce medication errors and save lives by incorporating these standards.

The health care industry needs to build an integrated anti-counterfeiting infrastructure. We have the barcode solutions and they are available today. The industry will need to build databases and communication links that support the expanded efforts of physically identifying products in those logistics units.

The UCC is the organization behind the commercializing UPC technologies as I mentioned before. EAN/UCC data structures will be mapped into the UPC.

Ms. Dicki Lulay, the next speaker and the President of EPCglobal U.S., will provide additional information on this evolution. Uniform Code Council is committed to help the FDA and the health care industry in this important initiative. Our solutions are global, proven and available today to identify, deter and combat counterfeiting.

Thank you again for this opportunity to speak.

[Applause.]

MS. LULAY: Good afternoon. My name is Dicki Lulay. I am President of EPCglobal U.S., which is a joint venture between the Uniform Code Council and EAN International.

I would like to thank the Food and Drug Administration for the opportunity to speak about the electronic product code and how this new technology will provide the health care industry with a powerful supply chain identification tool to fight counterfeit drugs.

First I would like to provide a little bit of background on the electronic product code. In 1999 the Massachusetts Institute of Technology formed MIT Auto-ID Center. Its charter was to research and develop a next-generation solution for automatic identification and data capture for the global supply chain. For the last 30 years the most well-known standard for automatic identification and data capture has been the UPC barcode.

The Auto-ID Center wanted to work with industry to develop a complementary next-generation solution that could provide even greater supply chain capabilities. With the active support of over 100 user companies representing a broad range of industries, research was conducted on five continents. The best and brightest minds in academia, business and technology community worked on this research. The Uniform Code Council was a founding sponsor of the Auto-ID Center and an active participant and supporter of the research.

The product of this research was electronic product code or EPC. The Auto-ID Center and its participating sponsor companies conducted extensive pilots on EPC technology to test its performance in real world supply chain applications. Since MIT and Auto-ID Center are research institutions, they wanted to license this technology to an organization that could commercialize the EPC for worldwide use.

Since the Uniform Code Council was a founding sponsor and had a 30-year track record in standards, it was a natural next step that the UCC take a leading role in bringing the EPC to market. In May of this year MIT finalized an agreement with the UCC and its global partner, EAN International, to standardize this emerging technology on a worldwide basis.

In order to support this effort, the UCC and EAN formed a joint venture called EPCglobal to drive the commercialization of the EPC. In order to move this technology from the research phase to the real world of business, the EPCglobal organization is focused on working with industry users to develop the necessary standards to drive broad adoption. It is a multi-industry focus and the standards will be developed in a user-drive consensus-based process.

Our strategy to standardize EPC technology is built on the following key components. Standards must be open and global so that all industries can adapt this technology. Our focus is on helping users apply this technology to solve practical business problems and address realistic supply chain opportunities. We will provide implementation support, education and training so that users can implement EPC technology quickly and correctly. There will be certification and compliance testing for EPC solutions so that users will have access to multiple suppliers and can make investments with confidence.

The EPC is still in its infancy and we are committed to continued support of the basis research so that technology can be enhanced to provide even greater value and utility to the global business community.

Open global consensus-based standards will provide the foundation on which the EPC network will be built. There are obviously tremendous business benefits. The EPC will enable immediate, automatic and accurate identification across the global supply chain. The potential to improve the efficiency of business practices is enormous. Equally important is the benefit to consumers. EPC technology will allow the health care industry to improve the quality of care for patients and consumers alike.

The EPC is uniquely positioned to address issues like counterfeiting and product tampering, and conserve, as an important tool, to improve consumer safety.

There are strong business cases for implementing the EPC network in the heart of supply chains and industry today. Greater efficiency, accuracy, automation and supply chain visibility are just a few of these benefits. This technology can and will create real value for businesses and consumers.

What do we need to be able to deliver on the potential of the EPC network? We need a systematic approach to Radio Frequency Identification--or RFID for short--that is based on standards.

This is a view of the EPC network components. Starting with Electronic Product Code or EPC, the EPC uniquely identifies the item. The tag is a small RFID chip with an antenna. In the EPC network, these tags can be as small as a dime and can be made to fit within the lid of a vial. Tags are excited by and broadcast their EPC information back to the reader.

Savant is a set of functionality that serves as the real-time event manager or traffic cop in a reader network. Savant can be implemented in software or as a combination of software and firmware in the reader itself.

ONS, the Object Name Service, provides a simple directory that can tell Savant where in the network information related to a particular EPC number can be found. ONS is very much like DNS, the Domain Name Service, that's part of the Internet. ONS and DNS share many of the same characteristics.

Once we know where to find information about a particular EPC, we need a common language for expressing that information and that brings us to PML, the Physical Mark-Up Language for describing physical objects and their location in the supply chain.

Lastly, users will need some common web-based services for building up PML information and querying the information in the network. That set of services is what we call EPC Information Services. This is a snapshot of the EPC Network. Our focus is to work with users to develop open, global standards and technical specifications to make this technology come to life and work in the global supply chain.

While the EPC Network is the next step in the evolution of the supply chain, it is equally important to remember where we are coming from. The EPC Network builds upon 30 years of heritage, in which the uniform co-counsel and EAN International have partnered with industry to create a global system of efficient, standard-base commerce.

The EAN.UCC System can be used by the health care industry today as a foundation for accurate and automatic item identification, inventory management and asset tracking. EAN.UCC data structures will work in the EPC Network, and using the EAN.UCC system now will pay dividends well into the future.

The EPC and EPC Network technology have the potential to bring profound benefits to the health care and pharmaceutical industries beyond what we are concerned with today, which is bringing forward the best solutions to combat counterfeit drugs.

In the shorter term, I believe EPC technologies can help to reduce warehousing costs, aid in the returns process between trading partners, reduce pilferage and reduce security costs, reduce diversion, aid recalls, highlight short-dated product, reduce the costs of trials, improve speed to market of new drugs, and enable more concise prescription fills.

The Auto ID Center commissioned Cap Gemini Ernst & Young to research the financial benefits so pharmaceutical manufacturers, distributors and hospitals could achieve with a fully functioning EPC Network. The results of their investigation are astounding.

Pharmaceutical manufacturers, for example, could realize a full spectrum of benefits across their supply chains. Cap Gemini estimates that with EPC Network technology, 40 days could be reduced in clinical trials, thus, allowing for improved speed to market of new drugs. If we use a $500-million drug as an example, a manufacturer could realize an additional $55 million in Year One sales if it were able to launch a new drug 40 days earlier.

Additionally, EPC Network technology can aid a manufacturers ability to source materials, manufacture products, warehouse and ship, all of the while reducing gray-market goods.

Cap Gemini estimates that a manufacturer, with a $15 billion sales, could realize $68 million in net present value in implementing EPC Network technologies for its internal supply chain.

The potential benefits to distributors are also tremendous. The Cap Gemini investigation estimates that a wholesaler could improve its distribution center processes, improve inbound and outbound logistics, reduce lost and stolen products, and improve its expiration processes. Using a $50-billion distributor as an example, Cap Gemini estimates that a project to implement the EPC Network could realize over $180 million in net present value.

The potential benefits to hospitals should also be noted. Using the automatic identification and tracking capabilities of the EPC Network, hospitals can significantly reduce adverse drug events due to wrong dose, wrong person, wrong time, as well as improve inbound logistics, improve central pharmacy operations, and improve the quality of health care.

Cap Gemini estimates that a 400-bed hospital could achieve a 5-year net present value of $3 million by implementing EPC. With thousands of hospitals this size, that's a number not to be ignored.

The EPC network also has the potential to bring longer-term patient and consumer safety benefits to the industry. At the top of the list, of course, is the ability of the technology to enable track and trace functions, as well as item identification to help reduce the problem of counterfeit drugs. The Electronic Product Code can uniquely identify each item, providing a pedigree for each unit of product, tracking the unit as it moves from the point of manufacture through the supply chain, making counterfeiting virtually impossible.

Robin Koh of the Auto ID Center will explain how this would work immediately following my presentation.

I also believe EPC Network technology can enable drug compatibility monitoring either in a pharmacy or at home, monitor whether drugs have been taken in-home by consumers, reduce inaccurate prescriptions and adverse drug events, promote greater accuracy so that drugs are provided to the right person in the right dose and at the right time and aid compliance to FDA guidelines.

Counterfeit drugs are a direct threat to a patient's safety and present an enormous cost to the entire health care industry. In closing, I would encourage the FDA and the leaders of the health care industry to support the EPC Network as a solution that will increase patient and consumer safety, improve supply chain efficiency and reduce costs. It is backed by the Uniform Co-Council, and EAN International recognizes the leading organization in global standards.

Health care companies can begin using barcode standards of the EAN.UCC system today in combatting counterfeiting. Because EPC Global is a joint venture between the UCC and EAN, there will be an orderly migration path between current barcode standards and the new EPC. And as EPC matures, EPC will be able to provide even greater effectiveness of identifying and removing counterfeit pharmaceuticals.

Thank you for your time.

[Applause.]

MS. KOH: Good afternoon. My name is Robin Koh, and I am the director of Applications at the MIT Auto-ID Center. We have had plenty of time to actually think about this technology that we're about to release and exactly how it could potentially play into the anti-counterfeit arena.

First, let me reiterate what this EPC system is all about. I think pictures speak a thousand words. I don't know how clearly you'll be able to see it, but essentially the Electronic Product Code is a 96-byte number, which is actually a very, very large number, which gives us the capability to uniquely identify every discrete product.

So what that means is that every single vial essentially has its own license plate. So it's like a vehicle identification number. Everything is different. So one vial can tell a very different story from another vial, and that is a very, very important characteristic of which this technology is about to release.

There are the radio frequency identification tags and readers, and that's what you've been hearing a lot about today. But the important thing to note on here is that the EPC Network is considerably more than just a radio frequency identification. There's mass serialization, there's tags and readers, and then there's this entire back-end network, which actually links the physical object to the information about the object, which is essentially where the EPC Network derives a lot of value.

The thing is, is that the system is designed so that an object can tell a story about itself, which is a very, very major, important characteristic of the technology.

Targeting counterfeit. This afternoon, in the interest of time, I'm just going to pick up one application, the counterfeit application, and show you how we're going to actually try to address it.

There's something called EPC authentication. I'm going to differentiate between track and trace.

What is EPC authentication? EPC authentication is just bouncing the EPC back through the system to the manufacturer's database to make sure that the manufacturer actually made it. Remember, the EPC is a unique serialization number. So, if I want to know whether this vial was ever made by the manufacturer, it just bounces back to the manufacturer's database and says, did you ever make this item?

So not only is it able to address EPC authenticity, but the fact is that it will be able to tell you the status of the product because you will also know whether it's out of date, whether it's been recalled and issues like that. So we consider this Step No. 1. It is the most elementary step which we would implement if the EPC system is used to address counterfeit.

Step No. 2 is what we call track. Now, today, you've heard a lot about track and trace, but in our minds, we actually separate them considerably. Tracking is the maintenance of control of the goods going forward in time, and that is very important to actually differentiate because what happens is, as the product moves from company-to-company, from Company A to Company Bank, we can essentially say, all right, you're going to receive these very specific Electronic Product Codes. If you don't get them, tell me about it. So I am maintaining control of that object going forward in time in the supply chain.

There is what we call shipment receiving and verification, which is one of the processes which we engage to actually execute the tracking function. So, essentially, what we are shipping to you, you should be able to verify at your position and send me back a message if you didn't get anything. And this happens from company-to-company.

Tracing is a little bit more complex. Tracing is when we build a history behind the object. So it's no longer going forward. This is when we are trying to build a history behind the object, and each company essentially writes its own data to its own databases, and what we are going to try to do is that we are going to try to archive the EPC, the time, and the custodian or the product going in and the product coming out from each organization. So that in case we ever needed to develop the history on the object, we actually have a registry at which we are able to develop the trace.

That's all we have. This is a simple three-step process, at which we think a logical roll-out of the EPC system could potentially aid the battle against counterfeit on the technology.

I would like to thank the FDA for this opportunity to highlight this project.

Thank you.

[Applause.]

MR. SANNA: Thanks. My name is Alberto Sanna. I come from Milan, Italy. I am the director of the DRIVE Program.

First of all, thanks to FDA for inviting me here to share with you the experience that we have done on DRIVE.

DRIVE is a European project that has been funded by the European Commission. We started in '99. It was a project of 4.2 million euro. It is a project that was involving several stakeholders in the pharmaceutical arena all around Europe, starting from two major pharmaceutical manufacturers--AstraZeneca and GSK--two major European IT industries--Atos Origin and Bull--and the European Commission Joint Research Center, which is the specific center of European Commission dedicated to research in the specific area of protection and security of their citizens, and a lot of other research institutions all around Europe. We also involved the other 40 stakeholders from East Europe, West Europe and Israel to validate the DRIVE System.

So before telling you the system, I would like to share with you why we wanted to make this project and why the European Commission founded it, by the way.

This is basically a very basic value chain. We have manufacturers and distributors. In this case, we have hospital, which is added value; we have pharmacy, which is working toward the back end, and the ward, which is working toward the front end, so the patient and the bedside.

Basically, we were aware of huge waste of money in the logistics, so, in the area of the back end, between the manufacturers and hospitals, as well as we are aware of huge patient safety issues, either coming from the area of medical errors, and here I am quoting the U.S. study on To Err is Human, as well as also the counterfeit problem that is worldwide, and I am quoting World Health Organization figures.

So our challenge was to try to address all of those three elements all together. So I think, at the end of the day, it is safer, smarter and trusted health care system at least within the scope of the project.

And basically what you see here is what we have made. We have made an integration of entities like Public Health Authority, we have drug registration, drug surveillance, we have supplier and including the distribution and the hospital where you can identify here the in-bound logistics, so the pure aspects related to administration logistics, and the clinical process. So therapy, validation, preparation, administration, monitoring and feedback.

Basically, this is the project we have done. We have done a pilot on this, and I will make some comments that are relevant for this audience on that. So we have made all of those functions, integrating all of those activities together, but one of the most important parts of the project was to identify the trust model because we have made the clinical functions and the logistic functions, and they are quite easy once you are able to model the system, but the trust model is much more critical.

Because what we have done is we have identified the process models, we have identified the assets in the process, and then we have analyzed all of the threats to safety, creating what we call the safety models, and all of the threats to security that include confidentiality, privacy, integrity, accountability, availability, and we have created the security model.

We have combined all together, and we have made the trust functions, which are real-time validation and verification, authenticity and traceability, identity protector, authorization and role-based access control, and we have used this as trust layers of the entire system, otherwise you can make a perfect clinical system, a perfect logistic system, but you have no trust between the stakeholders. This is a major point of concern.

And here it's in a very simplified way is the system how it links the supply and distribution to the pharmacy, the world, and the point of care because this is an integral part of the process. Obviously, I only want to focus on those major tokens, digital tokens, that are in place to enable all of these aspects. It is marked out for the decision of the operator. Otherwise it is not possible to track humans operating into a system, a wristband, digital wristband to track the patient, whether it is in relation with the operator or with the drug, and the digital label where we have included the market number, the lot, the expire date, a serial number to uniquely identify the product, basically for counterfeit reasons.

Obviously, we have made this with a dimensional code, but we also made some experimental activities on target, and that will come at the end of the slide on this.

These are some results to share with you. The digital wristband was in favor by more than 90 percent of the patients. We wanted to ask the patient if they liked to be scanned like a product in a supermarket because their dignity is part of the project. We are doing this for defending them, not for giving problems to them.

And when they understood all of the chain, what we do with the digital label, they were in favor of this because it's easy for the patient to understand the barcode or whatever complexity is arising from that because they go to the market and buy food and things.

We had a significant improvement in patient safety. To give a number, as an average, I can offer an increase in patient safety on the order of 70 percent, 7-0 percent. We have significantly increased the trust infrastructure through digital signature and role-based access control, either in patient privacy, in the care operator accountability, which is very important in the health care process, and business-to-business confidentiality, another key issue.

And then with the digital label, we completed a real-time traceability of drug life cycle in the production, logistics, and clinical phases, and significant improvement in fraud prevention because we had real-time control against a possible blacklist of drugs at risk. We achieved this reducing the operating costs of logistics of 30 percent.

We also made, I am responsible for standards at the European level in the health infomatics, the name being Safety Procedures for Identification of Patient and Related Objects, in which those aspects will be implemented as a standard in health infomatic system in Europe.

The main issue missing now, after this experience, is that we need drugs based on real-time track and trace. Track and trace is necessary, but is much more necessary to have real-time track and trace.

And the supply chain efficiency and real-time track and trace, to scale up the system, like DRIVE, such an integrated business model, we need large-scale sustainability in the reading cluster of products. We cannot have the burden of line of sight in scanning each single product at every checkpoint. So we need something which is very close to RFID, obviously.

Then, we need the reliability of the distributor system architecture. So we need scale of architecture, which is something very close to Savant, ONS, PML.

Then, we need synergy with other nonhealth care market. Otherwise the burden of the cost will be too heavy for health care markets alone, and this is another matter that is close to the issue of EPC.

And then we need a standardization of the universal identifiers at the item level, global. Otherwise we are not able to trace and track counterfeit because counterfeit comes from this distributed sources and origin.

Obviously, there are other issues, but one I want to mention that we need also to extend the issue to medical devices for exactly the same reason.

Last week in Milan, we initiated the process for what we call that DRIVE 2, which is exporting this pilot that has been deployed in Milan rapidly to being an EPC label process. And we were in Milan with MIT and the colleagues of JSC, the European Commission Joint Research Center, to address or start this initiative.

So my thanks for having me here and sharing with you our experience. And on my side, all of the best for possible cooperation because this is something that we can address at national or even continental level in my experience.

Thanks so much.

[Applause.]

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