FDA rule on tracking prescription drugs is held up -- again

A federal judge temporarily delayed the track-and-trace regulation because of concerns it is unfair to some drug wholesalers.

By Doug Trapp — Posted Jan. 1, 2007

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

A repeatedly delayed federal rule requiring the tracking of prescription drug sales has been put on hold again, this time by a federal judge concerned that the regulation is an unfair burden to smaller drug wholesalers.

The Food and Drug Administration set Dec. 1, 2006, as the deadline for some drug wholesalers to begin providing transaction histories, known as pedigrees, tracing all of their drugs back to the original manufacturer. The rule stems from the Prescription Drug Marketing Act, signed into law in 1988.

Judge Joanna Seybert of the Eastern District of New York issued a temporary injunction against the rule Dec. 4, 2006, in response to a complaint filed by 10 drug wholesalers, including the lead plaintiff, RxUSA, located in Port Washington, N.Y.

An attorney for RxUSA argued that the pedigree rule would put the 4,000 unauthorized drug wholesalers in the United States out of business. The regulation requires unauthorized distributors, such as RxUSA, to provide pedigrees, while authorized wholesalers -- those with formal agreements with drugmakers -- are not required to do the same.

Unauthorized wholesalers represent less than 5% of sales in the American market, according to RxUSA President and CEO Robert Drucker.

Most unauthorized wholesalers' drugs at some point pass through the hands of authorized distributors, the ruling states, thus potentially making it impossible for unauthorized wholesalers to meet the pedigree rule. At least 95% of RxUSA's drugs make contact with an authorized distributor, Drucker said.

Judge Seybert said the rule, as written, seems self-defeating.

"The pedigree requirement was created to show where wholesale distributors were obtaining their drugs," Seybert wrote in his ruling. "But [it] would essentially wipe out all the unauthorized distributors, leaving only the authorized distributors who are exempt from the pedigree requirement."

Seybert also wrote that slightly delaying a rule that already had been stalled for more than a decade was unlikely to cause harm.

The FDA continues to believe that its pedigree regulation faithfully interprets the drug marketing law and intends to defend both the regulation and the statute as the litigation continues, according to a Dec. 18 agency statement.

For some time, the American Pharmacists Assn. has viewed the impending pedigree rule as a requirement that would make it more difficult for unauthorized wholesalers to stay in business, said Kristina Lunner, the organization's acting vice president for policy.

The pharmacists' group considers the service provided by unauthorized wholesalers important, according to a July 14, 2006, letter to the FDA from AphA Executive Vice President John D. Gans, PharmD.

"APhA is concerned that the closing of unauthorized distributors would undoubtedly create a disruption in the drug distribution system negatively affecting pharmacists' ability to secure medications," Dr. Gans wrote.

Tracking drugs all the way

The drug marketing act was designed, in part, to protect consumers from tainted drugs. In 1992 Congress amended the law to require that unauthorized distributors provide a pedigree paper trail. Although the court concluded that neither the original law nor the amendment required drugs to be tracked back to the manufacturer, the FDA proposed a 1994 regulation requiring just that.

But the agency delayed its implementation a number of times during the next 12 years. The most recent was in 2004 because stakeholders in the U.S. drug supply chain said they voluntarily would adopt electronic pedigrees by 2007. When it became clear that was not going to happen, the agency opted for the Dec. 1 date.

Concerns about counterfeit drugs steadily have gained attention. Although the number of such investigations opened by the FDA declined from 58 in 2004 to 32 in 2005, the agency testified before Congress that it expects these tallies to bounce back in 2006.

Additionally, these numbers are still higher than earlier years. For instance, the FDA averaged fewer than 10 cases in the four years leading up to 2001.

Public support appears to back a tough stance. Fifty-three percent of Americans say Congress and the president should "do more to strengthen the FDA's ability to ensure the safety of prescription drugs," according to a postelection poll by the Kaiser Family Foundation and the Harvard School of Public Health.

On imported drugs, the American Medical Association supports using electronic pedigrees to make sure America's drug distribution network remains closed and secure.

None of the drugs RxUSA sells are imported, Drucker said. The company had $295 million in sales in 2005.

RxUSA and the agency will formally present evidence for and against the pedigree rule in court. Drucker said he expects the case to be resolved in the next few to several months.

In July 2006, RxUSA filed a federal antitrust case against 16 drug manufacturers and five national and regional drug distributors alleging that they are trying to squeeze out competition by unauthorized wholesalers.

Last month, Drucker and his partner, Mark Scovotti, formed two trade groups to represent unauthorized drug wholesalers, replacing a defunct organization.

The American Independent Pharmaceutical Wholesalers Assn. will focus on finding alternate prescription drug sources for unauthorized wholesalers. The National Assn. of Independent Pharmaceutical Wholesalers will focus on gathering a membership of companies, organizations, businesses, citizens and senior groups who have been harmed by large pharmaceutical companies, according to a press release.

Back to top

External links

Food and Drug Administration on the Prescription Drug Marketing Act (link)

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn