Earlier this summer, the FDA extended the Product Identifier Requirement under the Drug Supply Chain Security Act (DSCSA) to November 2018. The legislation applies to manufacturers, packagers, distributors and all others involved in the production and delivery of pharmaceuticals. 

At last year’s Pharmaceutical Traceability Forum, Applied DNA Sciences polled key executives and leaders about serialization and anti-counterfeiting in the pharmaceutical industry.

Drug Discovery & Development spoke with Bob Miglani, chief of business development, about the survey as well as how the Long Island-based company’s molecular tagging technology provides security and authentication to help pharmaceutical companies identify, target, track and trace products throughout the supply chain. 


DDD: What does Applied DNA Sciences do?

Bob Miglani: We’re a small company in Stony Brook, Long Island with about 50 to 60 people—mostly scientists and a handful of business professionals—and we make a unique molecular signature. It is a molecule-level bar code that we integrate into products at origin and then authenticate throughout the supply chain. It’s been validated by the U.S. government and military, which we do a lot of work for, as well as cotton, cash in transit and other businesses.

DDD: How will this work for the pharmaceutical industry?

Bob Miglani: What’s interesting about our tagging is we’re talking parts per trillion—a small level of molecular tagging—you can’t see it, you can’t smell it, you can’t taste it and it has no effect on form or function. But it allows you for the first time to have on-dose track and trace. The manufacturing of our Molecular Tags takes place using state-of-the-art equipment that is the largest manufacturing facility in  the world for producing DNA in such large-scale quantities—that so happens to be in a room the size of a closet. It’s really remarkable. Manufacturing, R&D and administrative offices are all in that facility as well as a forensic ISO17025 lab.

Evidence on authentication we provide our customers from our forensic scientists is permissible in the court of law. The people who staff the forensic lab actually come from the world of CSI and have worked in crime labs in New York City and Long Island. Forensics is important because for instance, when an ATM in the UK is robbed, the ATM sprays a blue dye along with our molecular tag, which sticks on the bank notes. The bad guy goes home and tries to wash the dye off, but the tag doesn’t rinse off. So the bad guy spends the money and gets caught. The police in the UK send us the marked bank notes. Then our forensic lab analyzes those bank notes for the tag and matches the crime to the place where it was committed by the molecular-level bar code. So we can tell you that an ATM was robbed at a specific location and the police can use that evidence to convict. We’ve had 100 convictions to date as a result of that forensic evidence. That’s pretty unique when thinking of pharmaceuticals and litigation and reducing risk. That’s part of what we do—we put a tag in so you can have that forensic analysis—you can actually take it to a court of law if needed.

For the pharma industry, the idea is to put our tag into a tablet or capsule or on the packaging to allow someone to know if a pill is authentic.

The challenge with the pharmaceutical industry includes a couple of things. The serialization requirement for pharmaceutical manufacturers is to put bar codes on boxes—2D bar codes that include four things: product identifier, lot number, serial number and expiration date. Those four things must be on all packages if you’re selling pharmaceuticals in the U.S. and that’s largely the manufacturer’s responsibility. The challenge is that the data are not necessarily being shared—or the system is not allowing them to be shared—until possibly 2020.  So a manufacturing or pharmaceutical company puts the bar code on the box and ships it out, but the challenge will be understanding what the bar code is, or in the sharing of the data it encodes.

Everyone has to pool together their data to be able to share it and that system is not live. It’s not a federal system; it has to be a private-market solution and so, as you can imagine, it’s really complicated.  So serialization will essentially have some traceability coming from the manufacturers. The idea was to have a supply chain that is clear, clean and safer for patients, so it would be great to have that—especially in a global world where the supply chain is so complicated and products can slip through the system.

The problem with bar codes is that they are easy to copy. My 12-year-old daughter, with my old iPhone, can take a photo of a bar code on a box, hit “print” and cut it out, then put it on a box that contains poison and ship it through the system and it will say, “yep, this is the same.” The intention is that eventually the system won’t do that because it will say “error,” or, “there’s two boxes of the same kind in the system.” But right now, the system allows you to copy bar codes very easily. There’s a lot of opportunity for counterfeiters who are trying to make money to copy bar codes. They’re easy to read— you scan them and get a response—but they’re also very easy to copy.

DDD: Does that explain the amount of counterfeit drugs being sold online?

Bob Miglani: To a significant extent, the reason that people are driven to these websites to buy pharmaceuticals is that copays and the price of pharmaceuticals are increasing year after year. High prices of certain pharmaceuticals such as oncology products and specialty diseases offer a chance for patients to save money by trying to buy them online. The cost of some of these pharmaceuticals can reach into the hundreds of thousands of dollars. The higher the price, the higher the margin for the counterfeiter and the more likely it will be counterfeit.

Consumers say, “I can shop around for anything on Amazon; why can’t I do it for pharma?” But these boxes patients receive from shopping online have been shipped in a dozen countries around the world and so when people receive them, they are relabeled and relabeled and the consumer may say, “Wait a minute, I don’t know what this is.” They usually end up throwing it away, even though they’ve paid a lot of money for it, but in some instances, they take it. While it may not be particularly bad, in some cases it can be very dangerous or lethal.

DDD: Are opioids a large part of counterfeited drugs?

Bob Miglani: Yes, absolutely. The opioid crisis is a serious one where counterfeits can play a role. A state in the U.S. was recently trying to stem counterfeit fentanyl and having a hard time doing so. Unfortunately, the counterfeiters are getting really good at copying a lot of things. A recent article in The Wall Street Journal reported that pill-pressing machines were being bought by individuals who were making counterfeit pills in their garage. They look like tablets you get at the drugstore.

Serialization is being pushed forward to make pharmaceuticals safer for consumers. One of the things I found interesting in our survey is that 42 percent of respondents say serialization will be challenging to complete but will be useful when it’s completed. Shouldn’t it be 100 percent? I mean, companies are spending millions on updating their equipment so they can put a 2D barcode on a box and 12 percent are saying it’s a tedious necessity to be compliant. The response, “Important to do but I’m not sure we’ll have the level of security was 17 percent. Again, you would think 100 percent would say it’s important, it’s challenging and useful.

Counterfeiters are getting better at innovating. They’re getting better at developing holograms and color-shifting inks and features like that on packaging. The reality is you can buy those kinds of things on eBay. Anyone can buy them online so that’s the challenge. We must ensure compliance regarding serialization and look forward to it but from our research survey, we’re hearing that more needs to be done.

DDD: Is there anything else in addition to serialization that can be done?

Bob Miglani: In the pharmaceutical industry, there has to be a multipronged approach. If you look at the dollar bill today, our bank notes here in the U.S., it has layers and layers of anti-counterfeiting technology. This impacts the paper, the ink, and what’s printed on the bill. There are several technologies that are incorporated into the most important asset the U.S. government has: its currency.

This ties into one of the questions on the survey: “How do you think we can ensure a safe supply chain?”  The answer is to combine multiple technologies. I think the idea of packaging solutions—such as what we offer, which is an anti-counterfeit technology—is a more proactive auditing of the supply chain.

Here is an example of what happens today in a pharmaceutical supply chain in say, Poland. The police bust a bunch of guys in a garage and they confiscate some pharmaceuticals. The police then look at the name of the company and they call the local office in Poland. If it’s a U.S.-based company, the Poland office calls the U.S. office and says they need to authenticate to know whether or not it is their product. So the U.S. office tells them to send the product to them. The product is sent to a lab and rigorous tests are performed to determine if it’s theirs or not. That’s a very reactive strategy and in fact, that’s partly because in the U.S. the FDA has a very simple rule: within 24 hours, you must notify the FDA of what’s called a suspect product. You must file a suspect product investigation report and you must determine if the product found is authentic or not, and you must let them know what the conclusion is.

This reactive approach to testing the product happens more often for highly counterfeit products but generally speaking it takes place once in a while. But we are hearing that now it’s happening more frequently. My point is, I think we need to go back to the basics, ensuring supply chain integrity instead of reacting to suspect products. We should consider doing random auditing and sampling of the supply chain to keep it cleaner to ensure that it’s safe. That’s part of what we try to do. To be able to be more proactive in our lab with lots of samples being sent from some of our customers in the supply chain for random auditing/sampling to ensure proactively that the chain, the distribution network, is clean and safe for consumers and patients. And that’s what we have to think about as we move forward: how do make it safer? One, deploy multiple technologies; two, do more frequent auditing of the supply chain; three, make people more aware of where they’re buying their product from. Some of this is being done already to get safer medicines to market. 

DDD: What else is being done to ensure a safe supply chain?

Bob Miglani: It’s not good enough to know where the product is coming from; it’s just as important to know where the products are going. Look at hospitals today. They’re massive institutions. And they are buying a lot of pharmaceuticals—and they’re buying them from different sources, different distributors. Pharmaceutical companies are pitching to hospitals to get their product procured in the hospital chain. The focus is often on price. What we’re increasingly starting to see, when it comes to the risk in the supply chain, is that hospitals are thinking very carefully about quality. “Is this the actual product I was promised? Is this safe? Is this coming from a safe supply chain?” They are buying these from different sources. There’s an opportunity for pharma companies to be proactive and say, “Look, we think we have a cleaner supply chain, but we’re not only competing on price; we’re competing on quality.” So that’s the other side of serialization that will be really helpful for pharma companies: the ability to go to hospitals and say, “This is authentic.”

There are so many healthcare systems and their buying power is significant. They often buy during times of shortages, and products come in that might be expired. Often they have a need for something, so if they’re short on supply, there’s an epidemic, or if they need flu shots and inventory is running out, they need to procure a product quickly.

They put out a request and they get a number of people responding to that request. What happens is that they respond, the price is good but the source is okay. Now, that source is often procuring it from three different sources. So there’s a multi-tiered sourcing of pharmaceuticals and it’s really complex. The complex nature of the pharma supply chain makes it more vulnerable.

It’s really important to have serialization but at the same time it’s really important to have multiple other technologies embedded in the purchasing of pharmaceuticals because once the product is removed from the packaging, you cannot tell where it came from or if it is authentic.

Bob Miglani
Chief of Business Development, Applied DNA Sciences

DDD: When will your technology be available? 

Bob Miglani: Our technology is available now. We are in the process of working with a number of partners that we believe will help us advance it to the next level and we believe that will happen over the next few months.

DDD: Do you have competition at the moment?

Bob Miglani: There are a few companies that do something similar but I think we’re unique. One, we’re a public company so everything we do is public, good or bad; it’s all out there. We share everything with the trade and our investors. Two, no one has done it on the massive scale on which we’ve been able to do it. For instance, 160 million pounds in Molecular Tagged cotton goes onto bed sheets that are being sold at Costco and Bed Bath & Beyond. So you are able to buy a bed sheet that’s labeled PimaCott—that’s a brand of cotton that’s embedded with our technology.

Three, our work with the U.S. military has been validated over and over again. Some years ago, the military had given us what’s called a red team challenge. They tried to hack our code, break it, and destroy it to see if it works in different applications, from testing resiliency of our tags that might go into space to hot and cold temperatures. We passed that red team challenge and so we were granted our first military contract. And others followed. Finally, we have a very prominent advisory board. Ray Kelly, who is the former New York City Police Department commissioner; Dr. Mehmood Khan, head of R&D and vice chairman of PepsiCo; Gunther Faber, formerly with GSK; and Bob Catell from the power industry.

Those are just a few big reasons I think we have something to offer that our competitors don’t.