Hill OKs Tracking Requirement For Transport of Pharmaceuticals

This story appears in the Nov. 25 print edition of Transport Topics.

A bill requiring companies to track the distribution of prescription drugs and pharmaceuticals was approved by Congress last week.

The Drug Quality and Security Act would require wholesale drug distributors and transportation service providers to document the movement of pharmaceutical products from the point of manufacture to final delivery.

It is expected to be signed into law by President Obama.

The measure also authorizes the government to set licensing rules for distributors and third-party logistics service providers.

The legislation “is a giant step forward for the safety of America’s drug distribution network and our supply chains,” said Scott Davis, chairman of parcel and freight carrier UPS Inc.

UPS is a member of the Pharmaceutical Distribution Security Alliance, a coalition of more than two dozen companies that for more than a decade has advocated for passage of federal legislation to take the place of a patchwork of state regulations.

More than 15 million prescription medicines and health-care products are distributed every business day in the United States, according to the Healthcare Distribution Management Association, based in Arlington, Va.

The ability to trace medical products uniformly while maintaining a seamless health-care supply chain “is essential,” said Matthew Rowan, president of the Health Industry Distributors Association, based in Alexandria, Va.

Among the bill’s provisions, manufacturers, wholesale distributors, dispensers and repackagers would be required to attach unique identifiers to products being shipped. They also would have the ability to exchange information electronically with all trading partners and have in place procedures to investigate and quarantine suspect or illegitimate products.

Monte O’Hara, owner of Capital Express Inc., said his Omaha, Neb.-based company provides tracking and monitoring of drug shipments at the request of drug manufacturers.

“The requirements now for logistics providers are very strict already,” O’Hara said. “Everything is under camera. Everything is scanned.”

Products are shipped in sealed containers, and O’Hara said his operations are subject to audits to test security procedures and verify backgrounds of drivers and other personnel that handle drug shipments.

Officials at large package carriers, such as UPS and Germany’s DHL Express, say they also are prepared to meet the requirements of the new law.

UPS operates 41 dedicated health-care distribution facilities worldwide, including a facility in China opened in May. The company also announced plans to acquire a European health-care company and expand five facilities in North America.

In June, DHL launched a global airfreight service that uses sensors to monitor temperature-sensitive shipments of pharmaceutical products and medical devices.

Under the law, products initially must be tracked at the lot level and after 10 years at the individual package level.

Beginning Jan. 1, 2015, however, manufacturers, wholesale distributors, dispensers and repackagers must only use “authorized trading partners.”

New licensing standards for third-party logistics service providers will be set by the secretary of health and human services through a future rulemaking process, according to the bill.