TraceLink sues HDA over control of pharma track-and-trace data

The question of who can host the data generated when serialized pharmaceutical packs move through the supply chain in the US has just become a legal one.

In one corner is serialization and supply chain network provider TraceLink, and in the other the Healthcare Distribution Alliance (HDA), which represents wholesalers and distributors of medicinal products in the US.

So what’s the beef? On October 23, TraceLink filed an antitrust case (1:17-cv-01197-AJT-IDD) against the HDA claiming that that the trade association’s Origin database – set up in the summer to help companies meet the serialization requirements of the Drug Supply Chain Security Act (DSCSA) – is creating a monopoly on the hosting of product information data, and accuses it of stealing its strategy.

In setting up the database the HDA has had the effect of “substantially foreclosing, competition in the supply of products that ‘track and trace’ pharmaceuticals as they flow through the supply chain,” says the complaint, which has been filed in US District Court for the Eastern District of Virginia.

The association’s position enables it to ”coerce or persuade its members to use Origin and, in turn, to not use the track and trace products offered by private competitors,” it continues.

Ownership of supply chain visibility data is a perennially thorny issue. Pharma manufacturers are responsible for putting serial numbers on packs and clearly own that part of the process, but once these are shipped and pass through intermediary hands en route to the patient the situation becomes infinitely more complex.

One of the benefits of that data visibility is that it makes it easier and quicker to carry out targeted product recalls of medicines and pre-empt shortages, for example. On the other hand, that data provides granular insights into the volumes and direction/destination of product moving through the supply chain that could be a valuable market research resource.

When it officially launched Origin in July, the HDA described the platform as a “central data repository hosting verified Global Trade Item Number (GTIN) information”, adding that it “eliminates the need for repetitive communication and allows data sharing through an easily accessible, cloud-based portal.”

TraceLink maintains however that because it does not use open standards for the exchange of data, Origin is a closed system that restricts choice and raises costs for customers. That means that rather than avoiding repetitive data entry it forces TraceLink customers to upload duplicate data to Origin and its own Life Sciences Cloud network.

“TraceLink had announced support for an open standards-based approach to master data exchange, and had won support from many current customers [but] in light of the conspiracy to mandate the use of Origin and HDA’s exclusionary licenses, a number of TraceLink’s customers have discontinued their subscription,” the company asserts.

Further, the complaint alleges that the HDA only developed Origin after members of the association attended a confidential TraceLink briefing in which the company revealed its “plans to supply a track and trace product” that would help companies meet the track-and-trace requirements enshrined in the DSCSA.

TraceLink is a dominant player in this space but is going up against some big fish, as the HDA counts big three wholesalers Cardinal Health, AmerisourceBergen and McKesson among its membership. An HDA spokesperson said that the association is “reviewing the complaint and does not have a comment at this time.”

Shabbir Dahod, CEO and president of TraceLink, told us that the company "believes that HDA and its core members are engaging in collective, anticompetitive acts, which include forcing companies to use “Origin” – and preventing these companies from using any other track and trace solutions for prescription medications that have DSCSA requirements."

"This also includes the use of exclusionary license contracts that HDA has required users to sign that creates a closed system, preventing users from transferring master data between competitive track and trace solution providers, like TraceLink. This violates not only the Sherman Antitrust Act, but DSCSA interoperability requirements as well.”