From 27^th November 2018, the Drug Supply Chain Security Act (DSCSA) will be actively enforced by regulators in the US. Enforcement has already been postponed to offer companies a one year grace period, so by the end of November all companies are expected to be fully compliant.

For a full introduction to serialization, read Part 1 of our Guide to Serialization

DSCSA delay: Why offer a one year grace period?

In November 2013, the US Congress enacted the Drug Quality and Security Act (DQSA). This contained the Drug Supply Chain Security Act (DSCSA) which sought to create a tighter, closed prescription drug distribution system to secure the nation’s drug supply.

The DSCSA outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs distributed in the US. The system aims to enhance the FDA’s ability to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated or otherwise harmful. Such a system would also improve the detection and removal of any potentially dangerous drugs from the supply chain.

The DSCSA aims to build an electronic, interoperable system to allow the FDA to protect consumers from dangerous drugs in the supply chain

A key component of the product tracing scheme outlined in the DSCSA is the product identifier. Under Section 582, ‘each package and homogenous case of product in the pharmaceutical distribution supply chain must have a product identifier’. This identifier must be encoded with the product’s standardized numerical identifier, lot number and expiration date.

Under the statute, manufacturers were originally required to begin affixing or imprinting (adding) a product identifier to products intended to be introduced into commerce by no later than November 27^th 2017.

In June 2017, the FDA released further guidance on Product Identifier Requirements. In this document, they clarified that ‘[the] FDA does not intend to take action against manufacturers who do not affix or imprint a product identifier to each package and homogenous case of products intended to be introduced into a transaction into commerce before November 26 2018’.

The FDA have made it clear that the upcoming November enforcement deadline is final and will not be extended further

This gave an open year delay in enforcement as it was thought that there was insufficient industry readiness and a lack of qualified vendors.

Is the industry now prepared for the enforcement deadline?

Full supply chain serialization is a complex and financially demanding task, which requires careful pre planning. While some companies took advantage of the DSCSA grace period to ensure full compliance, others likely delayed their preparations further.

When TraceLink completed their Global Drug Supply, Safety and Traceability Survey, they found a major disparity between perceptions of readiness and actual progress. They discovered that none of their respondents who felt ‘very ready’ for serialization had actually taken all of the fundamental steps towards serialization readiness.

"Organizations across the supply chain are not ready"

Brian Daleiden, Vice President of industry marketing at TraceLinks does believe that since then ‘the gap between perception of readiness and real progress has significantly tightened’. However, Dexter Tjoa, Director of Corporate Strategy of Tjoapack, believes that ‘although a yearlong grace period was granted to allow underprepared businesses to develop and implement a suitable solution, organizations across the supply chain are not ready’.

A recent study by AmerisourceBergen, Cardinal Health and McKesson Pharmaceuticals on pharma industry readiness echoes these concerns. After reviewing thousands of medicine packs passing through their facilities during the month of May 2018, they discovered that almost 80% of medicines packs do not meet the barcode requirements of the DSCSA.

Only 20% of packs carried a readable 2D data matrix barcode with all four required data elements. While this is an improvement on an assessment in 2017 which only found a readable 2D barcode on 7% of packages, there is clearly still a long way to go to reach compliance.

In a study of thousands of packages, 80% failed to meet the barcode requirements of the DSCSA

The study also found problems with the barcode placement, a lack of alignment when 2D and linear (UPC-A) barcodes were present on the same pack and issues with serialization adherence, improper coding and inconsistent expiration date formats. AmerisourceBergen noted that they are frequently finding barcodes placed too close to each other and in some cases, they are wrapped around the edge of the pack rendering them unreadable.

Siobhan O’Bara, senior vice president of industry engagement and services at GS1 US, which conducted the study on behalf of the distributors, said “the industry has made only marginal progress in the past year toward implementing DSCSA serialization”. She continued that “[in] just over one month from now, failure to meet these critical requirements could begin to negatively impact companies’ reputations and bottom lines, so time is of the essence”.

Rick Seibert, senior vice president of innovation and technology services at Sharp said that “in recent months, running up to next month’s deadline, there has been a surge in current client demand, as well as a high number of new clients wanting to convert as soon as possible”. They believe this signals that there are a number of providers not ready to be compliant so it is likely that a proportion of pharma companies are not ready as a result.

"Failure to meet these critical requirements could begin to negatively impact companies' reputations and bottom lines, so time is of the essence"

Daniel Tedham, managing director of Wasdell Manufacturing believes that “inadequate resources and/or limited access to the expertise required to deliver a compliant solution led to many companies delaying their preparations”. Although, as Staffan Widengram, director of corporate projects at Recipharm recognises “a fully serialized supply chain is a financially and logistically demanding task; companies that did not begin their preparations early will find it difficult to reach compliance with only one month to go”. He recommends that those in this position should prepare for a worst-case scenario.

The next steps post deadline

As Brian Daleidan, TraceLink recognises ‘the challenges associated with being ‘serialization-ready’ have prevented many businesses from looking ahead and preparing for what is next’. Some companies have been laser-focused on becoming serialization ready for the November deadline, so may have deferred preparing for the next phases of the DSCSA.

The laser focus on serialization has left some companies unprepared for the next phases of the DSCSA

For example, by November 2019 pharmaceutical manufacturers need to have systems in place to meet the impending saleable returns verification requirements imposed on wholesale distributors. Dexter Rjoa, Tjoapack, echoes the need for preparedness, recommending that companies ‘should start turning their attention to ensuring that they are well-prepared for aggregation requirements’.

RELATED: Read Part 2 of our Guide to Serialization for insight on aggregation

Those companies who are better prepared in advance will stand to make the most of their investment by exploring the additional opportunities presented by the increased level of supply chain visibility.

In conclusion

As Daniel Tedham of Wasdell Manufacturing puts it "it is to the benefit of the entire pharmaceutical industry that every business is compliant – the supply chain is simply too vast and intertwined for there to be any missing links".

Once businesses have implemented and validated a solution, they should begin working with their partners and collaborating and sharing knowledge with other members of the supply chain to ensure every business they interact with is compliant.

"The supply chain is simply too vast and intertwined for there to be any missing links"

As Daleidan of TraceLink recognises "the November deadline is just the first step towards a digital transformation of the pharmaceutical supply chain". Once the process of serialization is complete, it is time for business to begin leveraging the new information created to acheive business value.

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