Nearly three years after FDA waged war on counterfeiting and diversion, some pharmaceutical firms and their supply-chain partners are in the thick of it, responding to threats on a number of fronts. But others are just now suiting up for battle.
Many manufacturers have taken FDA’s 2004 report, “Combating Counterfeit Drugs,” quite seriously, investing millions in fortifying their brands with radio-frequency identification (RFID) and covert and overt security technologies. “Manufacturers are heeding FDA’s advice,” says Scott Denley, global product manager, Alcan Packaging, N’Crypt Product Security Solutions. “We see manufacturers incorporating several layers of security technology into their products and packaging.”
Many of these pioneers have comprehensive security programs, even though some still refer to them as “pilots.” Pfizer and Purdue Pharma LP have spoken publicly about their multilayered approach to fighting off counterfeiters with RFID and color-shifting labels for Viagra and Oxycontin. And a few others, like GlaxoSmithKline with Trizivir, are applying RFID on a smaller scale.
Nosco Inc. (Gurnee, IL) is involved in several drug security pilots with unnamed companies. “The only way companies can know what to expect and how to proceed is to start a pilot,” explained Gregg Metcalf at a November 2006 Southern California IoPP Chapter Meeting held at DDL Inc. (Costa Mesa, CA). As industry market manager for Nosco Security Protection and Nosco RFID Package Integration, Metcalf says that Nosco invested in custom-built equipment for integrating RFID tags into pressure-sensitive labels. “RFID technology is constantly improving,” he says. “Companies do not need to wait to start their security programs.”
But more than a few are waiting. “Our position is that we will familiarize ourselves with the technologies, but not implement until we sense the need to do so.” This telling statement comes from a respondent to PMP News’s 2006 Security Survey, fielded in November 2006. (For more reasons on why companies are not employing a packaging-based security system, see the sidebar on page 58.)Figure 1. Source PMP News’s 2006 Security Packaging Survey.
(click image to enlarge)
Technology providers report that they, too, often see companies taking a “wait-and-see” approach. “There are still those who don’t believe that their products are affected,” laments Narendra Srivatsa, business development manager, brand authentication, for New Jersey Packaging (Fairfield, NJ). “Not a large number of companies are adding security features. If E. coli can shake people up [over recent news of produce contamination], imagine what news of a counterfeit drug could do.”
“Some talk the talk, but few walk the walk, when it comes to security solutions,” says Richard Widup, formerly with FDA’s Office of Criminal Investigations and now senior director, corporate security, for Purdue Pharma. “Many fail to see the ROI—patient safety.” He spoke at the Future Pharma Congress hosted by Virtus International in Daytona Beach, FL, in early December.
FDA itself tempered its position in June 2006 by eliminating its “timeline” for RFID implementation. Originally expecting RFID to be in full swing by 2007, the agency has taken a slightly different approach:
“We continue to believe that RFID is the most promising technology for electronic track and trace across the drug supply chain. However, we recognize that the goals can also be achieved by using other technologies, such as 2-D bar codes. Based on what we have recently heard, we are optimistic that this hybrid environment of electronic/paper and the use of RFID/bar code is achievable in the very near future. We believe that efforts to ensure that hybrid pedigrees are secure and verifiable should be a priority consideration.”But now that FDA’s recently enacted drug pedigree requirements are tied up in court after an injunction by a group of distributors (see the Regulatory Focus column on page 22 for more details), companies could find excuses to further delay action. But Denley believes this development could have greater impact on RFID progression. “Regarding other authentication solutions, manufacturers will likely progress with current projects.”
And, even if FDA seems to be allowing companies to forge ahead at their own pace, state legislation may very well put companies back on track. “FDA has backed down, but the states haven’t,” says Tom Jay, vice president, sales and marketing, for SICPA Securink Corp. (Springfield, VA). “Florida and Indiana are already moving ahead with their pedigree laws, and other states may be doing so shortly, too.”Water-activated tape from Better Packages leaves visible signs of tampering.
Katherine Eban advises “pharma companies to think like counterfeiters.” Author of Dangerous Doses, she tells the eye-opening story of a small group of tenacious investigators who cracked several drug-counterfeiting and diverting rings in Florida. “I saw a lot,” she says. For instance, low-dose vials of authentic biologicals were easily counterfeited into high-dose fakes because there were no packaging differences between the two. To better protect such products, “Companies have to think of all the ways their packages can be messed with,” Eban advises.
When asked whether packaging can deter such criminals, Eban says that “packaging is vital.” She adds that “it would be better if pills would travel with their original packaging. I think we would be safer, to some extent, with blister packaging, for example. Repackaging, where the original packaging is shed, puts us at some risk. Those products are vulnerable.”
PMP News’s second annual Security Survey was filled with a few surprises. In the 2005 survey, a solid majority (82%) said that they are using or considering using packaging technologies to enhance security. The 2006 survey, however, shows a 10-percentage-point drop to 72%. Of course, because respondents to both surveys may very well be two entirely different groups, it would be incorrect to report that interest in security solutions is waning. But we honestly didn’t expect to see any drop.In addition, interest in specific technologies was flat compared with last year’s numbers and had even slipped in some cases. In 2005, 73% of respondents were using or considering using bar coded lot and date codes, 46% security printing, 29% bar coding NDC or UPC, and 27% RFID item tagging. In 2006, only one of these technologies showed an increase—33% of respondents are interested in using bar coded NDC or UPC as a security measure. (We wonder whether interest in such bar coding grew for an entirely different reason—FDA’s bar coding rule for hospital-use drugs.) Sixty-seven percent are now interested in bar coded lot and date codes, 45% security printing, and 17% RFID tagging items.Figure 2. Technologies used by or of interest to healthcare product packagers. Source PMP News’s 2006 Security Packaging Survey.
(click image to enlarge)
What do the decreases mean? It could just be that we were lucky enough to find respondents whose products have a pretty safe supply chain.
It could be, however, that some pharmaceutical companies simply won’t budge without standards or mandates. “Pharma is one of the more progressive industries when it comes to responding to counterfeiting and diversion,” says Mary Ann Allen, director of business development for George Schmitt. “But I am saddened that we haven’t moved forward with certain security solutions and RFID. I think we need standardization to give rise to continuity and consistency. Standardization could come in the form of a mandate, but it doesn’t have to. Industry needs to move forward in the same direction, and the industry’s supply chain infrastructure needs to be addressed.”
EPCglobal is working toward RFID standards involving the Electronic Product Code (EPC) in its Health and Life Sciences (HLS) Industry Action Group. (For more on these, see the December 2006 Regulatory Focus column.)
The North American Security Products Organization (NASPO; Washington, DC) may be another source of standardization. The group has come up with “best practices and procedures for manufacturing security products to combat fraud,” explains Robert Sherwood, chairman of NASPO’s communications and marketing committee. Definitions and standards for implementing a brand security solution are available to members, and NASPO audits companies according to its best practices and issues certifications. Examples of these practices include background checks for all employees and a documented chain of custody for security materials.
“NASPO is a growing organization,” says Sherwood, who also serves as vice president of sales and marketing for Sekuworks LLC, a NASPO-Class I-certified company offering intaglio printing.
“NASPO was organized to write a standard for ANSI, and now the U.S. government is embracing our standards.” Several security technology providers are members, and Bristol Myers Squibb is a user member. (For a list of member companies, see the sidebar on page 49.)
NASPO member ARmark Authentication Technologies LLC (Glen Rock, PA) is working toward NASPO certification. The company, a subsidiary of Adhesives Research, develops covert markers that can be added to adhesives, inks, overprint varnishes, and polymers, even those that are extruded or formed with high temperatures. Several other technology suppliers, too, are entertaining membership or just about to enter the certification process.Figure 3. Packaging levels to be protected with security features.
Source PMP News’s 2006 Security Packaging Survey. (click image to enlarge)
In PMP News’s survey, material costs and reliability concerns were the biggest challenges to implementing a packaging-based security system. (See the figure on page 48.) “Designing such a system is very challenging,” says one respondent. It is “easy to add benefits, but challenging when adherence to target cost a must.” And, offering one example of implementation obstacles, another respondent says that, “Current vision systems have difficulty in verifying lot and date codes on clear ampules.”
Counterfeiters and diverters, however, aren’t waiting around for standards to develop, costs to drop, or problems to be solved. The Center for Medicine in the Public Interest says that counterfeit drug commerce will grow worldwide to 13%, more than twice the amount of legitimate drug trade growth.
LAYER, LAYER, LAYER
Eban stresses that “security measures are like an onion,” conjuring up a layering simile.
Technology layering is exactly what Denley calls the best defense against counterfeiting and diversion. He advises a layered solution specifically tailored to the product and its supply chain. “There is no one-size-fits-all approach. Companies have to know their products and their supply chains to understand where the risks are and how to best counter them.”
Srivatsa agrees. “Don’t follow what other companies are doing,” he says. “There is always room for innovative ways to layer security technologies.”
Many security solutions have involved what could be called secondary packaging, such as labels and cartons and bags and pouches. For instance, survey respondents are adding security features to bags and pouches (45%; not all of them, of course, are for secondary packaging purposes) and to cartons (43%).
Srivatsa says that companies can start implementing security solutions by looking first at printed graphics. “Look to see how easily security can be embedded into existing graphics.”
Denley says he sees companies looking to primary packaging substrates. A quarter of respondents are securing unit-dose blisters, while 24% are protecting unit-of-use bottles, vials, tubes, or syringes.
ARmark’s covert markers are designed to become “indigenous” to the package, says Greg Andrews, market manager. “We work with brand owners and their converter suppliers to blend the markers into the environment. They are made to be integrated into packaging with minimal rework.”
One company recently used the absence of one of ARmark’s markers to avoid liability in a counterfeiting case, says Andrews. “We have not heard of any case of a counterfeit marker,” he says. “If the bad guys were able to copy the marker, they would have to be able to get it into film, for instance. They would need to understand what they are made of and how to produce it.”
Shipping cases are also being used to secure products. Thirty percent of respondents are adding security features to cases, and 27% are adding them to pallets.
Cathy Kurzbacher, manager, marketing and communications, for Better Packages Inc. (Shelton, CT), reports an increased interest in water-activated tape (WAT) for sealing uncoated paper-based cases. Once sealed to the case, WAT fuses with the corrugated carton, forming a permanent bond.
Better Packages has supplied WAT dispensing systems since 1917, so the technology isn’t new. But it had seen a drop in demand in the 1970s when plastic pressure-sensitive tape emerged. “Now, there is a resurgence in WAT, given security concerns and the price increases of polymer-based materials,” says Kurzbacher. “WAT offers security and strength benefits. A minor drawback is that you need specialized equipment. But it can be worth it—plastic tape can be removed without leaving visible signs of tampering.” While she can’t name any pharma customers to maintain confidentiality, she says that Land’s End and L.L. Bean both use WAT for their shipments.
Kurzbacher adds that WAT could be applied over RFID tags, and taggants could be added between the paper and the carton. “With RFID alone, someone could breach the case and the RFID tag could still work.”
Figure 4. Degree of challenge in implementing security packaging technologies, with 5 representing a very strong challenge and 1 representing a not-so-strong-at-all challenge. Source PMP News’s 2006 Security Packaging Survey. (click to enlarge)
Looking into solutions used by other industries may also help. The banknote and security documents industries constantly fight off counterfeiters by layering in several features. Several technology providers supporting such security efforts are developing similar solutions for drugs. Document Security Systems (Rochester, NY) and SICPA are just two firms adapting their anticounterfeiting technology used for currency and other at-risk products for drug packaging and labeling.
“We’ve developed overt and covert inks for banknotes, and we can vary them for use in Pharma,” says SICPA’s Jay. He says that SICPA is the sole outside producer of banknote inks for the Bureau of Engraving & Printing for the U.S. Department of the Treasury.
Srivatsa advises changing techniques at least once a quarter, maybe even more often, depending on the need. Such a schedule may tempt companies to select simple solutions that can be easily updated. But Srivatsa advises against low-end, generic solutions. “If they are easily available, anyone could pick them up off the Internet. Counterfeiters have fairly savvy approaches, and they tend to be right behind you.”
Ernie Chaplin, vice president of sales and marketing for Pharmagraphics, says that his printing firm, recently acquired by the Specialist Packaging Division of the Clondalkin Group, is looking at all options for product authentication. “They have to be complex enough to provide different levels of authentication, but simple in application,” he says. “A lot of testing is involved. We haven’t had a lot of success with certain security inks so that they have proper lay down and adhesion. To solve this, label substrate manufacturers need to be aware of the [emerging] taggants and inks.” He also questions whether there will be issues printing certain security inks using digital printing technology.
Ever since FDA earmarked RFID for anticounterfeiting in 2004, the pharmaceutical industry has been debating whether or not the technology is the “silver bullet” against all crimes and misdemeanors. “RFID is promising,” said Peggy Staver, Pfizer’s director of trade product integrity, at EPCglobal U.S. Conference 2006 in Los Angeles. It “provides the means to authenticate at the pharmacy.” She did note, however, that, “we believe technology alone will not prevent counterfeiting.”
Pharmagraphics is planning for the use of RFID in its organization. “The technology has gotten better, and the means of integrating tags has improved,” Chaplin says.
Frequency is also subject to debate. “Our tests have shown that ultrahigh-frequency (UHF) tags can do everything that high frequency can, but cheaper,” says Joe White, Symbol Technologies. “UHF is less mature than HF, but it is catching up quickly to HF. UHF advances in near-field-antenna designs and dramatic differences in shapes compared with HF help optimize the technology for pharmaceutical applications.”
Patrick Sweeney argues that HF has the lower risk proposition. The author of RFID for Dummies and president and CEO of ODIN Technologies (Dulles, VA) says that HF is a globally accepted frequency with no intellectual property issues and much more consistent performance than UHF. “There are a wide array of suppliers in production—HF has definitely benefited from technology investment,” he says. “Physics was feared as the biggest hurdle. But there are laws dictating how this technology behaves. Once you understand the physics, you reach the greatest success.”
In addition, “FDA is a lot less apprehensive about HF in terms of affecting the chemical or genetic makeup of certain products,” he says. “But until FDA makes some sort of RFID recommendation, companies will be uneasy about technology obsolescence,” says Sweeney.
Challenge’s Polt says that “in anticipation of Gen2 tags and recent Wal-Mart statements regarding sunsetting Gen1 tags, there has been an increased clarity in direction resulting in renewed interest and demand. Customers are more focused on UHF at the moment in order to satisfy current market requirements. We are prepared, however, for a significant increase in activity for both HF and UHF tags.” She acknowledges HF’s drug suitability, but says that “the newest UHF technology called ‘near-field’ is proving to overcome the problems with liquids and metals. This technology is under development and is viewed as a medium-term solution.”Nosco is working with both frequencies, too. Metcalf says that his firm is able to produce 100%-readable RFID-tagged labels using either wet or dry inlays. “RFID label carriers have gotten thinner, allowing them to be wrapped around tight radii,” he says.
Success stories like Nosco’s and Challenge’s makes Sweeney confident that “bar codes are going away.” He says that “for the next seven to eight years, both bar coding and RFID technologies will be prevalent. But in 10 years, there won’t be any bar codes. They are too easy to counterfeit and don’t carry enough data.”
Sweeney says that the data-rich RFID will be useful in building a pedigree. “The biggest source of frustration for FDA agents is that they can’t tell who distributed products,” says Sweeney. “FDA wants any tool that makes their job more effective.”
ODIN is in the process of helping the National Council for Prescription Drug Programs Inc. (NCPDP; Scottsdale, AZ) set standards for pharmacies adopting RFID technology. It is more than just the pedigree: “RFID has to work with billing and financial systems,” he says. NCPDP creates standards for data transfer to and from pharmacies.
WRAP IT UP
At the EPCglobal event in Los Angeles, Jamie Hintlian of Accenture said that the pharmaceutical industry is vulnerable in several ways. “There are a complex supply chain, a lack of regulatory consistency, patient concerns about privacy, and pressures over healthcare costs,” he said. “Technology is not the magic bullet. It will take technology and the coordination of several activities across the supply chain.”
Srivatsa of New Jersey Packaging says that companies may need to rethink their supply chains. “Direct-selling models may be more secure. There are fewer links in the supply chain.” He also says that stricter laws and penalties may help, “but there will still always be a role for product authentication.”
Throughout this feature we reference our exclusive e-mail survey on security packaging. In November 2006, PMP News surveyed subscribers working for pharmaceutical manufacturers, medical device manufacturers, nutritional supplement manufacturers, and contract packagers to determine their use of packaging technologies for product security. A 13-question survey was designed by PMP News and Readex Research and e-mailed successfully to 2381 subscribers. The survey was closed for tabulation with a total of 181 usable returns—a 8% response rate. The responses were tabulated by Readex in accordance with accepted research standards and practices.