Category Archives: Business


A Bar-Code In The Hand Is Worth Two RFID Tags In The Bush

On February 26, 2004, the FDA published its final rule onBar Code Label Requirements for Human Drug Products and Biological Products.  According to the Agency, “Bar Codes will allow health care professionals to use bar code scanning equipment to verify that the right drug (in the right dose and right route of administration) is being given to the right patient at the right time.  This new system is intended to help reduce the number of medication errors that occur in hospitals and health care settings.” 

The Bar-Code rule requires linear bar codes on most prescription drugs and on over-the-counter drugs commonly used in hospitals and dispensed pursuant to an order. The bar code is required to contain, at minimum, the drug’s National Drug Code (NDC) number, which uniquely identifies the drug. The rule also requires the use of machine-readable information for blood and blood components intended for transfusion. The machine-readable information must include, at a minimum, the facility identifier, the lot number relating to the donor, the product code, and the donor’s ABO and Rh. 

During the same month, February 2004, the FDA’s Counterfeit Drug Task Force issued its report on “Combating Counterfeit Drugs”. This report called for the implementation of Radio Frequency Identification (RFID) technology to allow the tracking of pedigree and mass serialization for all drug products. The Agency set forth a phased approach to the implementation of RFID technology starting at the case and pallet level for products likely to be counterfeited and progressively including all products at the case, pallet, and package level by 2007. 

In February of 2006, the FDA conducted a Counterfeit Workshop in Bethesda, MD to get an update from stakeholders on the status of RFID implementations. Affected stakeholders, including manufacturers, distributors and pharmacists, presented progress made and concerns associated with RFID and e-Pedigree initiatives. During my remarks to the Task Force, I stated that RFID technology should be used as an enabler, not a silver bullet. I conveyed the agency’s role to set regulatory requirements, gathered in cooperation with all affected stakeholders. However, in my opinion, the FDA should not mandate specific technologies to be utilized to achieve compliance.  

In June 2006, the task force issued its update on the FDA Counterfeit Drug Task Force Report. The agency admitted that although in 2004 it was optimistic that widespread implementation of e-pedigree was feasible by 2007, unfortunately, this goal most likely will not be met. The report went on to say:

“…it is clear from our recent fact-finding efforts that the voluntary approach that we advocated in the 2004 Task Force Report did not provide industry with enough incentives to meet FDA’s deadline.
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.
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.” 

Is this a case of one step forward and two steps back? I don’t believe so. I see it as a net gain for all stakeholders, especially patients.  The FDA estimates that the bar code rule, once implemented, will result in more than 500,000 fewer adverse events over the next 20 years.

Hospitals have recently made major investments in Bar-Code systems to comply with these regulations and minimize medication errors. Asking them to now reinvest in RFID technology without realizing the benefit of Bar-Codes would be a mistake. 

As the saying goes, A Bar-code in the hand is worth two RFID tags in the bush.

Copyright 2006 Daniel R. Matlis – AXENDIA


It’s Time to Deepen the Gene Pool

By Daniel R. Matlis

In my “Final Word” column, published in Pharmaceutical Formulation and Quality, I discussed the need to deepen our industry’s gene pool. 

Johnson and Johnson has taken a huge leap to diversify the industries’ gene pool.  J&J recently announced the appointment of LaVerne H. Council to the position of vice president and chief information officer.

Council comes to J&J from Dell Inc.  She brings to the position a wealth of global experience in information technology, supply chain management and business operations. During her tenure at Dell, Council was responsible for infrastructure engineering, networking, security, and enterprise application interfaces and was the global supply chain technology leader for Dell’s core operations.

Skeptics might ask how her experience at a major computer maker qualifies her for the position at one of the most prestigious life-science companies? After all, what do PCs and healthcare have in common? Well, more than you think.

Read the complete column in Pharmaceutical Formulation and Quality.


Life Sciences Industry is an Emerging Powerhouse in Pennsylvania

By Daniel R. Matlis

According to a recent study by the Milken Institute the life sciences industry is an emerging powerhouse for U.S. global economic competitiveness in the 21st century. In the study, Philadelphia ranked as the 3rd most vibrant biosciences cluster in the nation.
Pennsylvania’s $2 billion Biosciences Enterprise commitment, coupled with Governor Edward G. Rendell’s $2.3 billion Economic Stimulus Package is fueling research and development, attracting venture capital, and supporting early-stage investment.

Recently, I had the opportunity to speak with Rebecca Bagley, Deputy Secretary for the Technology Investment Office of the Pennsylvania Department of Community and Economic Development (DCED), to learn about what the Commonwealth is doing to attract and retain life science companies.

What is PA’s vision around life sciences?

Life science is a major focus cluster for the Commonwealth since Governor Rendell took office. One of the reasons we focus in that sector is the continuum of assets the Commonwealth has to offer. The spectrum includes world class universities; eight of the United States’ largest pharmaceutical companies are located within a 50-mile radius of Philadelphia; and a strong venture capital climate.

How does the Commonwealth benefit?

We benefit through jobs, research and development expenditures, leveraging of capital into the state, as well as attracting entrepreneurs which benefit the state in the long run. There are more than 125 bio-pharma [biological-pharmaceutical] companies and more than 2,000 biosciences-related companies located in Pennsylvania.

How have trends such as outsourcing and the flat world impacted life science firms in PA?

The Commonwealth has a focus on innovation and early stage companies, funded not only through a venture capital network but also through our Life Science Greenhouses, a network and resource for early stage capital.

We also have the large pharmaceutical companies which provide potential for partnership opportunities.

In life sciences, it is less likely that the manufacturing will go overseas because of Food and Drug Administration (FDA) restrictions and the specialties that are necessary compared to a call center. Biotechnology manufacturing is much more complex and therefore more difficult to relocate overseas; we have not seen this trend with bio-pharma.

We have seen a significant shift to overseas life science manufacturing to countries like Mexico, Brazil and China. How has this impacted PA?

With our focus on innovation and heavy research and development, Pennsylvania offers a great advantage to bio-pharma companies. The Commonwealth is targeting high tech, complex manufacturing.

What initiative does the state have to attract foreign companies to establish headquarters in PA?

Within the Governor Rendell’s budget this year, we have a $ 15 million allocation for World Trade PA, which will help focus our international activities with both recruiting and attracting early stage companies to relocate here. For example, the Science Center in Philadelphia is recruiting early stage Japanese companies. Historically our goal has been to attract established companies to set up their U.S. headquarters in the Commonwealth.

How does your approach differ when dealing with early stage versus established companies?

The Technology Investment Office focuses on early stage innovation and technology.  There are other offices with in the department along with the Governor’s Action Team which focus on attracting or recruiting the established companies to PA.

We have a strong relationship with Pennsylvania Bio. This ensures that companies based in Pennsylvania stay in the state as they grow and require larger facilities. To that end, DCED Secretary Dennis Yablonsky and the president of PA-Bio meet with companies in Pennsylvania to make sure that growing companies are familiar with the range of incentives the state has to offer.

We offer packages that include loans, grants and tax credits that can accommodate relocation of large companies. We also can assist with site selection. The Governor’s Action Team works closely with local entities to ensure the process is smooth.

What is the state doing to attract service organization that support life sciences to ensure there is a complete ecosystem within the state?

That has been our approach from the beginning. We build clusters to include large pharmaceutical companies, service providers and early stage companies together in one area to have a complete market place.

So why should life science companies consider Pennsylvania?

The assets we have in the Commonwealth to develop life science clusters are very attractive to companies. From world class universities, which can provide research at their fingertips, to the supportive venture capital environment, and an extremely supportive and proactive state government, which provides both incentives and focused initiatives for the life science industry, we have created an environment which makes it very encouraging for companies to operate in the Commonwealth. Additionally, we offer great quality of life, great schools, inexpensive housing and thriving communities.

ã 2006 by Axendia


FDA Issues Final cGMP Guidance

By Daniel R. Matlis
Yesterday, on the heels of the release of a critical Institute of Medicine Report, the FDA issued a Final Guidance for Industry on a Quality Systems Approach to Pharmaceutical CGMP Regulations. The guidance covers the Center for Drug Evaluation and Research (CDER), Center for Biologics Evaluation and Research (CBER), Center for Veterinary Medicine (CVM) and the Office of Regulatory Affairs (ORA).

This new guidance appears to be an interim step on the long awaited rewrite of the 1978 GMPs, known as the “GMPs for the 21st Century Initiative”.
According to the FDA, this guidance aims to address the following issues:

  • A quality system addresses the public and private sectors’ mutual goal of providing a high-quality drug product to patients and prescribers. 
  • A well-built quality system should reduce the number of (or prevent) recalls, returned or salvaged products, and defective products entering the marketplace. 
  • It is important that the CGMP regulations are harmonized to the extent possible with other widely used quality management systems, including ISO 9000, non-U.S. pharmaceutical quality management requirements, and FDA’s own medical device quality system regulations.  This guidance serves as a first step to highlight common elements between the CGMP regulations and Quality Management Systems.  With the globalization of pharmaceutical manufacturing and the increasing prevalence of drug- and biologic-device combination products, the convergence of quality management principles across different regions and among various product types is very desirable.
  •  The FDA has concluded that modern quality systems, when coupled with manufacturing process and product knowledge and the use of effective risk management practices, can handle many types of changes to facilities, equipment, and processes without the need for prior approval regulatory submissions. Manufacturers with a robust quality system and appropriate process knowledge can implement many types of improvements.   In addition, an effective quality system, by lowering the risk of manufacturing problems, may result in shorter and fewer FDA inspections.
  • A quality system can provide the necessary framework for implementing quality by design (building in quality from the development phase and throughout a product’s life cycle), continual improvement, and risk management in the drug manufacturing process.  A quality system adopted by a manufacturer can be tailored to fit the specific environment, taking into account factors such as scope of operations, complexity of processes, and appropriate use of finite resources.

This announcement is a step in the right direction. However, as stated in every guidance document it “does not create or confer any rights for or on any person and does not operate to bind FDA or the public”.

Let’s see what the “GMPs for the 21st Century” brings.


ImClone Loses Patent Decision for Cancer Drug Erbitux

By Leslie Gladstone Restaino, Esq.

ImClone Systems, Inc. is reeling from a court decision Monday invalidating ownership of a significant patent for the company’s cancer drug Erbitux. 

Yeda Research and Development Co., the licensing arm of the Weizmann Institute, filed suit in 2003, alleging that three researchers had not been properly designated as inventors on the patent which claims the use of certain antibodies to block a tumor grown protein, when used in combination with chemotherapy.  Aventis claimed that its scientists had already conceived of the use of the antibodies as tumor inhibitors when one of its scientists asked scientists at the Weismann Institute to test the idea in routine experiments.  Yeda claimed that Aventis scientists volunteered to supply the Weizmann scientists with an ingredient to do the experiments.  The New York District Court agreed with Yeda, crediting the invention solely to the Weizmann researchers.  In order to continue to sell Erbitux, Yeda may likely look to grant a license to ImClone, Aventis’ exclusive licensee of the patents, at a premium to the current terms of ImClone’s pre-existing agreement with Aventis.  Alternatively, Yeda may block ImClone’s ability to sell Erbitux for use in chemotherapy combination therapies.
This ruling underscores the need to correctly list patent inventors. Inventorship turns on conception.  Oftentimes however, researchers list all project participants on patent filings, mimicking the procedure used for article publication.  Where incorrect,  ownership can shift, or the patent invalidated. 
About the Author:
Leslie Gladstone Restaino is a Member of the Firm of  Sills Cummis Epstein & Gross, P.C in the Intellectual Property and Corporate Practice Groups. She concentrates her practice on the special business and legal needs of public and private life sciences companies. Ms. Restaino represents established pharmaceutical companies and start-ups in the life sciences industry throughout all phases of their life cycle and understands the business concerns of growing and established companies.