Helping hospitals track counterfeit drugs is this start-up's Rx

Dwight deVera is a hero to every man, woman, and child whose life he helped save, wounds he treated,  and broken bones he stabilized in the 20 years he responded to medical emergencies as a volunteer with Lafayette Ambulance in Upper Merion, retiring as deputy chief of operations in 2015.

Now, as founder and chief executive officer of a software start-up, deVera is again focused on saving lives. This time, he hopes, for eventual profit.

His King of Prussia-based Forerunner Group has created a track-and-trace platform for hospital pharmacies called RXTransparent. The entrepreneurial endeavor was inspired by the Drug Supply Chain Security Act, passed in 2013 to combat counterfeit prescription medications and establish a comprehensive and efficient system for tracking prescription drugs from production to end user.

Requirements will be phased in over 10 years, establishing a variety of must-dos for manufacturers, wholesale drug distributors, repackagers, and dispensers (mostly pharmacies). Compliance will be monitored by the U.S. Food and Drug Administration.

RXTransparent launched a year ago to help hospital pharmacies meet those requirements. Among them: keeping information on each drug purchase for six years.

Counterfeit prescription drugs are "a big, hairy problem," deVera said, by some accounts contributing to more than 100,000 deaths a year in the United States. The new law also will make it easier to trace the origins of legitimate medicines in the event of bad outcomes.

Cloud technology has helped make doing all that far more affordable than traditional software systems that could cost $500,000, said deVera, 44, a Pennsylvania State University graduate with a degree in business logistics (now known as supply-chain information systems).

"A half-million-dollar solution to whatever problem is really a nonstarter," said deVera, who worked for 10 years in data transparency and analytics for large-scale clients including Southwest Airlines, Sodexo, and Wegmans before deciding "to do something wild and pull the rip cord."

For the six months he was under a noncompete clause with his previous employer, deVera researched cloud technologies and built a platform of 38,000 FDA-approved drugs.

RXTransparent is now being used by 50 hospitals or health-care systems. The typical customer deals in about 5,500 different drug products, deVera said.  His company's contracts are usually for three years at $5,000 a year.

RXTransparent serves as the last line of defense in counterfeit drug identification and tracking. Health-care providers use the compliance platform to report and quarantine illegitimate or suspect products, as well as research the chain of custody of dispensed products.

Pomona Valley Hospital Medical Center signed on to RXTransparent after evaluating at least one considerably bigger competitor, said Michael Campbell, pharmacy director at the 453-bed nonprofit community hospital in Pomona, Calif.

"We went with RXTransparent because their software was better," Campbell said. "It was more user-friendly."

Should the FDA want to see reports on what Pomona bought from a vendor last June, for instance, "I want to be able to log onto a system and find data I need in less than two minutes," Campbell said.

Pomona Valley's contract with Forerunner closed in November, and the RXTransparent infrastructure is in place. Once the hospital's pharmaceutical vendors have transmitted shipment and invoice data, it will be 100 percent compliant with the Drug Supply Chain Security Act. That is expected this month, deVera said.

With drugs constituting 20 percent of any health system's costs, deVera said, Forerunner has add-on plans for RXTransparent.

"There's an amazing amount of opportunity in this space," he said.

Having raised $500,000 from friends and family to get started, Forerunner is about to initiate a Series A raise of $10 million. This year's revenue for the company of 14 employees is not quite $500,000 and is projected to reach $8 million to $10 million by the fall of 2017, deVera said. Thirty-six hires are expected by mid-year.

Plans include a mobile app warning of drug shortages. There are at least 300 drug shortages at any given time, deVera said, which usually lead to runs on product and price spikes. RXTransparent customers would get a shortage notice, along with an estimate of how long it is expected to last and a recommendation on whether more should be bought before the shortage worsens and prices rise.

Also planned is RXTransparent Share. Here's why: deVera mentioned that three hospitals on Second Avenue in New York each have in stock cobra antivenin. Derived from sheep, it costs hospitals $5,000 a dose, he said.  The sharing coordination and tracking system that Forerunner envisions would ease the burden on each having to carry a drug that is likely to get thrown out on its expiration date rather than actually be used, deVera said.

"If we have any impact at all, it will go to the health-care system's bottom line and make everybody happy," deVera said of his ultimate mission.

Leonard Ulan, an emergency-medicine physician at Bryn Mawr Hospital and an unpaid adviser to Forerunner, also sees medical research potential.

"You can even see patterns of disease based on use of drugs," Ulan said. "This is a fabulous future for medicine by having this data we can work with."