Nicholas Basta

At first glance, the guidance that FDA issued in early June* for the so-called “enhanced drug distribution system” (EDDS) that will codify the requirements of the 2013 Drug Supply Chain Security Act (DSCSA) by 2023 looked like a positive step: 

 a “gold mine of guidance that industry had been seeking for years.” But a hint of future trouble could be seen when the Healthcare Distribution Alliance (HDA) requested, and was given, additional time to comment on the draft document this summer. At the end of August, HDA filed its 

, which basically blow up the entire document; the trade association of wholesalers and distributors requests that “the Draft Guidance be withdrawn in its entirety.”

In the comments which go on for 37 pages, HDA sees “catastrophic impacts,” “unprecedented in federal law” and “contrary to the plain language of the DSCSA and not legally defensible,” among other choice criticisms. The comments also cite prior case law involving federal agency enforcement restrictions; this could be looked on as presaging the legal battle that would begin should FDA finalize the draft guidance.

The main point of HDA’s comments, however, is a fairly straightforward technical disagreement over what is implied in the term “interoperable.” While FDA allows for “distributed” or “semi-distributed” data repositories for the transaction information that DSCSA requires trading partners to maintain, the language in the guidance implies a central data repository, or what HDAA calls a “a centralized system that every trading partner must subscribe to and participate in, and/or some type of network or global overlay that connects all the systems of every pharmaceutical trading partner.” Such a system is not only technically challenging; its security is uncertain regarding protecting the highly proprietary trading information that wholesalers, especially, would want to protect. FDA would like, as HDA puts it, a “a single, centralized database or blockchain(s) that can be queried with a ‘one-button’ request” with near-instantaneous response; the reality is that dozens of distinct software systems exist, with tens of thousands of trading partners, across the US pharma supply chain. Manufacturers, wholesalers and some other trading partners have created linkages among some of their databases, but in nearly all cases, the linkage is established through tedious, time-consuming processes. More importantly, each trading partner controls access to the data it stores; for the most part, the linkages do not flow freely from one organization to another.

FDA’s goals are clear; it wants to be able to find, or cause to be found, suspect or illegitimate product flowing through the pharma supply chain, and to rapidly effect a product recall. It would be easy, if everything were connected on one system, to do this; but in reality, FDA will need to manually trace such products by querying each database (in the current, distributed setup) individually. Here, it’s worth noting that (with the debatable exception of counterfeit opioid products that are bought and sold illegally), the instances of counterfeit or illegitimate products showing up in routine pharma distribution are rare. Product recalls are a real issue of patient safety, and while most of the time these recalls take weeks to months and are rarely comprehensive, after 2023, this process should move a lot faster whether or not FDA gets the EDDS system it seems to be looking for.

The casual observer of this dustup between FDA and industry might wonder what all the fuss is about, when in Europe, under the Falsified Medicines Directive, there are national, central databases, and trading partners are connected to them. But FMD only serves to authenticate the barcode on an item of sale in a pharmacy; it does not track products as they move from trading partner to trading partner. DSCSA was intended to be much more comprehensive and to provide much more detailed information of value both to manufacturers and to their trading partners. That vision is still possible to achieve, but industry and FDA will have to collaborate more productively to make it happen.

*Draft Guidance for Industry: Enhanced Drug Distribution Security at the Package Level Under the Drug Supply Chain Security Act, Dkt. No. FDA-2020-D-2024, 86 Fed. Reg. 30053 (June 4, 2021)

Articles

FDA’s recommended guidance is for a system that ‘does not exist, cannot be built by 2023, and poses unacceptable security and compliance risks,’ says alliance

HDA calls for withdrawal of FDA’s latest DSCSA guidance on the ‘enhanced drug distribution system’

On June 3, FDA released four guidance documents (two final, two draft) for resolving at least some of the nagging issues that industry has been wrestling with since the passage of the Drug Supply Chain Security Act (DSCSA) in 2013. FDA has delayed enforcement of a number of interim requirements to November 27, 2023, the nominal date when a fully interoperable electronic system for sharing product and transaction data for nearly every pharma package in commercial distribution is to be in effect.

The two finalized guidances, “[DSCSA] Implementation: Identification of Suspect Product and Notification” and “Product Identifiers Under [DSCSA] Questions and Answers” provide fairly straightforward answers for a number of questions that have cropped up; for example, because some drug packages require a linear barcode on their label, the DSCSA-mandated 2D barcode will not be a replacement.

One of the draft guidances, “Definitions of Suspect Product and Illegitimate Product for Verification Obligations under [DSCSA]” provides some color around the terms “counterfeit,” “diverted,” “stolen,” subject to a “fraudulent transaction” or “unfit for distribution”—all fairly straightforward. The other draft guidance, “Enhanced Drug Distribution Security at the Package Level” is the gold mine of guidance that industry has been seeking for years.

One key element of this is FDA’s acknowledgement that aggregation (accumulating multiple individual package identifiers under one case) and inference (assuming that the individual package identities are correctly tied to the case-level ID) are explicitly permitted. “Because it appears to be an essential process in trading partner daily operations of supply chain and data management, whether manual or automated, FDA supports the use of data aggregation.” Also: “A trading partner should only use inference when it receives pallets or homogeneous cases with aggregated data if the integrity of the unit is intact—in other words, the tamper-evident tape or wrap, or other security seal, has not been broken.”

An even bigger element of this guidance is FDA’s acceptance of how industry intends to collect, store and transmit product and transaction information. “FDA supports a distributed or semi-distributed data architecture model because either model can allow each trading partner to maintain control over its own data.” For years, there has been wrangling over whether transaction data needs to be collected in one place for each product shipment, regardless of how many trading-partner transactions have occurred; this language seems to support the stance of the Healthcare Distribution Alliance (and others) for a “one up, one down” system where each trading partner stores data on whom it bought product from, and whom it sold product to. In the event of an investigation, FDA (or others) are supposed to be able to go to each trading partner in a chain of transactions and obtain the necessary information all the way back to the manufacturer.

The one-up, one-down scheme does put the onus on the entire pharma supply chain, from manufacturer to wholesaler to third-party distributor to enable a comprehensive tracing system to function. That remains a challenge, but one that most industry experts believe is realizable.

The “Definitions” guidance has a 20-day comment period (ending roughly in early July); the “Enhanced Drug Distribution” guidance has a 60-day comment period. All these guidances are accessible via the FDA 

— Nicholas Basta is Editor Emeritus and Founder, Pharmaceutical Commerce

“Aggregation” and “inference” are specifically allowed, under draft guidance

FDA releases more guidances for complying with DSCSA

 between IQVIA and Veeva Systems, Inc. over physician databases took its latest turn this week. A ruling issued by a special master (appointed by a judge to oversee one or more aspects of litigation) found that “Veeva was well-aware that it was misappropriating IQVIA data;” and that “spoliation of evidence” had occurred intentionally after the litigation was initiated, among other findings. But as Veeva, in response, points out in a press release, the special master’s decision “does not decide any key issue that will come before the jury in the case,” and that “Veeva . . . is appealing the ruling to the trial judge.”

This case, which started in early 2017 when IQVIA sued Veeva for theft of intellectual property and related matters, has now gone through 350 motions and rulings (as of this week), and more are likely until a jury trial starts in 2022, with perhaps a decision in 2023 (then the appeals can start).

Wall Street is paying some attention to the trial, but the real question is whether the conflict between the two powerhouses for digital pharma data impedes the pharma industry, the companies’ main client. IQVIA notes that “Veeva remains one of the top-five holders of approved third-party agreements (TPAs) with IQVIA,” meaning that the company shares data access on behalf of pharma clients, now and going forward.

The dispute centers on data repositories that both companies maintain about physician access and relationships—essential information for running a pharma salesforce. IQVIA’s is branded as OneKey; Veeva’s is OpenData. When Veeva built up its industry-leading position in salesforce automation during the 2010s (it now commands some 80% of that market), it introduced OpenData as the data repository to use in conjunction with its salesforce automation. IQVIA soon sued, claiming that OpenData improperly accesses data from OneKey. Along the way, IQVIA lost market share of its salesforce automation services, now called OCE, the Orchestrated Customer Experience, to Veeva.

These data repositories, providing what is called 

, require continual updating and refinement; the better the data, the better a pharma sales force using them can succeed in sales and marketing efforts. (There are over 80,000 pharma sales reps in the US, and hundreds of thousands more globally.)

The recent special master ruling (which IQVIA has put online 

, makes for interesting reading, with spy-vs-spy comments on “The Shire Incident,” “The Genentech Incident” and the “DataDestroyed Spreadsheet.” But, as Veeva points out, the ruling pertains primarily to the litigants’ disputes over document discovery to resolve the dispute. The broader issue, expressed in Veeva’s countersuit, is over what it alleges is “IQVIA's unlawful tactics to retain monopoly control of data crucial to the life sciences industry and use that position to extend its monopoly into the software market.”

For its part, IQVIA sees the ruling as exposing what it claims is “Veeva’s longstanding deceptive business practices, as well as its pattern of corporate theft,” and that IQVIA “looks forward to successfully resolving our ongoing litigation for the benefit of our clients and reaffirming protections for intellectual property, innovation, and investment.”

Pair of life-sciences data powerhouses are immersed in dispute over their respective data services for pharma sales and marketing  

Ruling made in latest round of litigation over alleged data theft

During the near-chaos of 12 months ago, when air fleets were grounded, ocean ports temporarily shuttered and truckers and warehouse operators challenged with sickness and unsafe working conditions, the global pharma supply chain mostly operated satisfactorily. While there had been many reports of shortages of consumer goods, most pharmaceutical shipments were maintained. A less satisfactory condition maintained for medical equipment—especially personal protective equipment (PPE)—but a lot of that was due to skyrocketing demand as the pandemic took hold globally.

Now, as the US and much of the developed world are seeing a decline in infection rates, business analysts are beginning to look around and find that a new pharma supply chain is being created. At the same time, enormous demand for vaccines and medical gear are being experienced by the developing world, especially Southeast Asia and South America—and this will need dedicated support in coming months, if not years.

“In the past, it was hard to get senior management’s attention for the life sciences supply chain. If there is a silver lining in the pandemic response, it is that we’ve experienced a jump start to a more compliant, more secure supply chain,” says Dan Gagnon, global marketing manager for UPS Healthcare. “It now has infrastructure in places it didn’t before, and there will be more end-to-end cold chain solutions.”

Larry St Onge, global president of the Life Sciences/Healthcare Sector for DHL—one of five key markets for the global giant—concurs, noting that the company has expanded its Leipzig facility in Europe, as well as integrating acquisitions in Colombia in the past couple years. “Our biggest investment has been expanding the Medical Express service, which is able to provide cross-border, small-parcel delivery to the point of use. There will be a strong focus on direct-to-patient services in years to come.”

To be sure, the pharma logistics business was showing healthy growth even before the pandemic took hold. 

 Biopharma Cold Chain Sourcebook show that overall pharma logistics spending would have reached $90.3 billion in 2020 (based on pre-pandemic estimates) and was due to rise by 4.5% by 2022. Within that, the cold chain sector was due to rise from $17.2 billion in 2020 to $19.1 billion in 2022—an 11% rise.

There have been capacity expansions all over the globe as a result of the pandemic. UPS opened freezer farms, capable of storing Covid-19 vaccines at -70°C/-94°F (a requirement of the Pfizer-BioNTech vaccine) at its Worldport in Louisville, KY; it also undertaking a 440,000-sq. ft. expansion of its Rome logistics facility (due to come online in 2022). Envirotainer, a provider of specialized unit-load devices (ULDs) for pharma air freight, expanded its capacity by over 50% during the year, and now has 41 stations globally to handle movement and servicing of its containers. Producers of parcel-to-pallet-size reusable containers expanded facilities and inventories; these were key items in moving the ultracold Pfizer and Moderna vaccines.

Freight forwarders such as UPS and FedEx have expanded freezer storage and other capacities as a result of Covid-19.

Air carriers, a key part of international pharma shipping (most intranational shipping goes by ground) also stepped up their game, although their business was whipsawed by the plunge in passenger flights globally. (Air cargo divides between that carried by dedicated cargo carriers, and that carried in the cargo bellies of passenger jets). DHL has estimated that over this year and 2022, 10 billion doses of Covid-19 vaccine will need to be delivered, often to developing regions with poor logistics infrastructures. That volume will require an estimated 200,000 pallet shipments and 15 million insulated parcels, as well as 15,000 dedicated flights.

Besides the air cargo companies like DHL, FedEx and UPS, air carriers like American Airlines doubled its capacity to carry ULDs (from, among others, CSafe), and extending its cold-chain network to 30 new stations. UAE’s Etihad Air Cargo, while announcing a 50% increase in pharma shipments during 2020, announced a life-sciences-dedicated service, PharmaLife, in September. The company has been instrumental in delivering millions of doses to date around the Middle East and South Asia.

The Abu Dhabi Dept. of Health (Etihad is headquartered in Abu Dhabi) spearheaded an effort called the HOPE Consortium that brings together freight forwarders Agility, Aramex, Hellmann and Kuehne + Nagel, Bolloré Logistics, CEVA Logistics, DB Schenker, DHL, FedEx Express, MICCO Logistics, RSA Global and UPS to expand the distribution network for vaccines. Abu Dhabi Ports is also a participant, as is the life-sciences container service of Switzerland’s SkyCell. Abu Dhabi Ports has installed a freezer farm with capacity for 11.5 million vaccine doses (at ultracold temperatures); there is additional capacity for 2-8°C (36-46°F) refrigerated pharmaceuticals as well.

Woven into these capital investments is the equally important investment in training and expertise across the pharma supply chain. Hard data on this is more difficult to come by; but one measure is the growth of the CEIV Pharma certification program, managed by the International Air Transport Association (IATA). IATA launched CEIV Pharma in 2014 partly as a competitive response to other global transportation modes (specifically, ocean freight) and to unify, as much as possible, operating parameters for life sciences products across air carriers, freight forwarders, airports and other parts of freight movement. There are now over 300 companies, organizations or locations that have some level of CEIV Pharma certification. Most recently, Kuehne+Nagel announced a recertification of its entire PharmaChain organization; DHL announced an expanded number of recertified locations. IATA itself issued a 

 in November for safe vaccine transport and distribution.

“DHL has life sciences competency centers with dedicated and trained teams that understand the good distribution practices (GDP) standards,” says St Onge. “We can provide high-touch, hands-on service,” he says, summarizing the approach of how many of CEIV Pharma-certified organizations approach their tasks.

Meanwhile, ocean freight shippers haven’t sat on their hands through the pandemic. Proponents note that air cargo capacity constraints will continue into the future, and that ocean freight can meet as many GDP standards as anyone else, even while providing a service that is usually substantially less expensive, on a ton-shipped basis, than air. As an example, In April, Maersk, an ocean shipper, initiated a three-year agreement with Novo Nordisk to provide transportation for the company internationally; it also covers inland logistics.

“Even small deviations on, for example, temperature can mean that an entire container of insulin needs to be discarded,” said Christina Torp Jacobsen, key client manager at Maersk, alluding to Novo’s leading position in diabetes treatment. “This would, of course, mean big financial losses—but more importantly, Novo Nordisk needs to make absolutely sure that patients, who rely on their products, are not exposed to any risks.”

Another transformation difficult to see in hard assets like planes or warehouses, but creating a new operating environment for pharma shipping is the adaption of real-time visibility networks. Such networks, which depend on sensors and dataloggers incorporated into pharma parcels or pallets, along with stationary transceivers and control-tower-type centralized command centers, had been coming along pre-pandemic; the rush to develop, authorize and distribute Covid-19 vaccines—and the high, life-saving value of each in the early days of the pandemic response—drove that adoption far ahead.

Each of the initial vaccine authorizations—Pfizer, Moderna and J&J—brought such real-time systems along with the trucks and planes delivering the vaccines. Companies like Controlant, Cloudleaf, Sendum, CargoSense, Roambee and others saw new business coming their way. Major freight forwarders either rebranded white-label offerings from companies like these, or developed their own. In the past, the onboard dataloggers could register internal temperatures of a shipment, and not much else; more recently, both internal and external temperatures are logged, as well as location. Now, there are capabilities for two-way communications in the field, and a wide range of communication protocols—cellular, satellite, and WAN, as well as Bluetooth Low Energy (BLE) for communication between multiple sensors.

Roambee, for one, touts its ability to “orchestrate” the data feeds of multiple sensor networks (such as from the datalogger as well as the datalogger of a truck, plane or vessel) and then provide guidance on, for example, a soon-to-be-exceeded temperature limit of a shipment. Roambee counts DHL, CEVA and Kuehne+Nagel among its users. Cloudleaf, which has a relationship with Cold Chain Technologies (a packaging provider) offers comparable services.

Adam Crossno, CEO of OnAsset Intelligence, says that this booming field is splitting among companies that provide the platform or network for monitoring a supply chain, and companies (like his) that focus on the devices that provide the “edge” sensing—at the point where a shipment is located, and following it along its path wherever it goes. Some of the network companies provide their own sensors (Roambee, for one, offers a subscription service of its sensors combined with the network monitoring, and there are many providers of sensors and dataloggers for logistics processes).

In OnAsset’s case, the company has just introduced its next-generation datalogger, the Sentry FlightSafe which, among other things, provides 5G telecommunications (as well as other common channels), linkage to tags that can provide additional local data (such as internal and external temperature of a package) and two-way interactivity. “Depending on how the implementation is set up,” says Crossno, “we can control the on-off status of the devices remotely, or send instructions, readable on the device’s screen, for how a shipment is to be handled.” He adds that the OnAsset devices, which are typically acquired on a subscription basis, are reusable and rechargeable—an environmental benefit relative to the more usual practice of using the sensors or dataloggers once and then discarding.

One of OnAsset’s clients is Marken, the UPS subsidiary that specializes in clinical trial logistics. In the Covid-19 era, specialist firms like Marken have pitched in to handle commercial deliveries of vaccine (as well as managing vaccine trial logistics). DHL’s Medical Express service is touted for its ability to handle last-mile delivery, across borders, for parcels (many clinical trial shipments are parcel size). “The future of pharma logistics is direct-to-patient,” says St Onge.

One company betting both on the growth of clinical trial logistics, direct-to-patient services and the need for cryogenic services is Cryoport, which started out as a developer of containers, chilled with liquid nitrogen, for the cell-based therapies and diagnostics in the growing cell and gene-therapy (CGT) field. In late 2020, it acquired a large producer of cryogenic equipment, MVE Biological, as well as a clinical trial logistics firm, CryoPDP. More recently, it added another logistics firm, Critical Transport Solutions Australia, to further build out its service offerings in Asia-Pacific. Cryoport straddles both clinical and commercial CGT operations (given that some of the newest CGT treatments involve cells tailored to individual patients; at that level, clinical-research and commercial logistics processes are practically identical).

Jerrell Shelton, Cryoport chairman, notes that the company had some peripheral involvement with Covid-19 vaccine and therapy trials, but its focus is still primarily on the CGT field. “FDA expects significant growth in CGT approvals in the coming years, and we will benefit from that,” he says. “Moreover, medical research is opening up more and more of cellular science—mRNA is just one example—and we see strong growth for its future in pharmaceutical development.”

UPS’ Gagnon has a different twist on the same growth patterns for pharma logistics. “The pandemic has shown the importance of diagnostics, given that so much effort has been put into Covid-19 testing,” he says, “and that application is being driven toward at-home testing. We can see that end-to-end solutions, where the diagnostic or the therapy is being delivered to the point of care, is the future of pharma.”

Nationally and internationally, the logistics service providers for life sciences see a new vista