The Drug Supply Chain Security Act (DSCSA) has been an active topic of discussion amongst companies in the pharmaceutical supply chain for the past eight years.
Enacted by Congress in November 2013, Title II of DQSA outlines the steps to achieve interoperability, electronic tracing of products at the package level, to identify and trace prescription drugs as they are distributed in the US territory.
Since its inception, key industry associations, including the Healthcare Distribution Alliance (HDA), Pharmaceutical Development Group (PDG), and GS1 have dedicated exclusive panels to debate the impacts of DSCSA and to provide valuable resources in efforts to collaborate for this industry wide objective. Although considerable progress has been achieved during the previous years, much work is still required until the pharmaceutical industry can finally "flip the switch" for DSCSA.
Supply chain disruptions caused by the Covid-19 pandemic, coupled with a shift in focus towards vaccine development and distribution, have contributed to creating delays in DSCSA compliance efforts. Nonetheless, per the FDA's recent guidance during its public meeting in October of 2021, further enforcement discretions are highly unlikely to be granted. Therefore, the target date for full compliance and interoperability has been set for November 27th, 2023.
Interoperability remains the biggest hurdle
As DSCSA legislation states, trading partners in the pharmaceutical supply chain must have systems in place which enable the capture, storage (up to six years), and transmission of data in EPCIS format amongst stakeholders. EPCIS is a GS1 standard that enables trading partners to share information about the physical movement and status of products as they travel throughout the supply chain – from business to business and ultimately to consumers.
During the annual Traceability Seminar in November 2021, the HDA disclosed results of its recent supplier survey around data interoperability progress, which were far from encouraging considering the legislation was two years away from the ultimate deadline at that time. In this study, 54% of respondents were manufacturers and 46% were distributors. Amongst all participants, only 37% indicated they were actively interoperable with approximately 1-5% of their trading partners. Furthermore, a major distributor, member of the Big Three family (the three largest distributors in the US), indicated concerns around data quality and failures caused by EPCIS/DSCSA syntax or semantics issues when receiving files from trading partners. These issues were present amongst third-party logistics providers (9% failure rate) and manufacturers (37% failure rate).
Part of the challenge around data interoperability is because several serialisation solutions providers exist, each with their own proprietary software products, with thousands of trading partners in the pharmaceutical supply chain hosting their own data. Although some progress has been achieved in connecting these systems, the process has proven to be lengthy and labour intensive.
Data quality concerns at the manufacturer level
Throughout 2018 and 2019, the FDA ran a series of pilot studies that aimed to assess the impacts of having stakeholders verify the authenticity of a pharmaceutical product by scanning its unique data matrix barcode and authenticating it against the manufacturer hosted serialisation database. Simply put, once a product was scanned, the manufacturer's system would provide a positive or negative result based on the unique information embedded on the product’s data matrix.
Although the enforcement of this specific DSCSA milestone was later delayed in 2020, the results of the pilot studies were peculiar, with a high percentage of authentic products (upwards of 25%) returning a negative confirmation. Many manufacturers were puzzled as to the cause of these "false negative" results. Upon further investigation on the embedded data contained in the faulty barcodes, the most common issues included the wrong placement of comma separators, use of double zeroes for lot and expiry dates, amongst other technical issues. Furthermore, it was concluded that most of the data errors were becauseof brand owners using CMO’s and contract packagers which were utilising serialisation solutions yielding poor results.
The same scenario was raised by another distributor during the HDA's annual Traceability Seminar in 2021. Here, the distributor indicated that at that time, less than 50% of manufacturers had the means to correct errors on their EPCIS files and data matrix barcodes. Additionally, low supplier onboarding activity and steady decrease in the engagement between manufacturers and distributors for data interoperability was a cause of grave concern.
Ongoing challenges in the dispenser community
As mentioned, the Covid-19 pandemic forced thesupply chain to temporarily shift its efforts from compliance towards vaccination. Dispensers were placed at the forefront of this battle and were naturally induced to focus on this matter as highest priority. This change in focus was clearly visible as only 9% of the participants during the HDA's 2021 Traceability Seminar were organisations from the dispenser community.
As well as diminished engagement around DSCSA compliance, budget constraints are an important factor which dispensers must consider, especially amongst independent pharmacies. It is anticipated that once dispensers are obligated to acquire their own serialisation solution, expenditures could amount to over $20,000 yearly. Assuming there are over 67,000 dispensers nationwide, the average cost of this requirement would be over $1 billion annually for this sector of the pharmaceutical industry.
With cost as a primary determinant, the industry is likely to see the continuing trend in which distributors act as the data repository for their respective dispenser clients. During the first phase of DSCSA compliance, which required trading partners to exchange lot level data in the form of EDI Advanced Shipping Notifications (ASNs), this was an easier task to achieve. However, when dealing with serialised data and the ability for a dispenser to reconcile received products against EPCIS files, additional challenges are likely to arise. The burden will be placed on the distributor to host the serialisation data and facilitate how their dispenser customers can access and utilise this data as part of a daily workflow.
Challenges and opportunities beyond 2023
Once DSCSA is in full effect, the pharmaceutical industry will be well equipped with a wealth of data pertaining to pharmaceutical products flowing through the supply chain. This complex data network will provide many added benefits extending beyond the obvious compliance requirements.
Improvements in internal processes will occur organically, including enhancements around product verification and visibility within the supply chain -and eventually down to the patient level. Natural enhancements are likely to occur in the drug recall process, including more accurate chargeback and rebate processes. Also, pharmaceutical suppliers will benefit from a granular view of inventory movement through the supply chain, thus having access to data to better direct sales and manufacturing operations.
The outlined benefits are not immune to potential challenges imposed by the pharmaceutical industry and its governing federal regulators. As an example, the FDA's Enhanced Drug Distribution Security at the Package Level draft, a concept introduced by the FDA in June of 2021. This guidance provided insights pertaining to aspirations of implementing a semi-centralised data repository, managed by the FDA, in which all trading partners would have to report to - an effort not well received by key stakeholders in the pharmaceutical industry and is highly improbable to take place soon. Further improvements in DSCSA compliance are only likely to happen if it adheres to the legislation's original draft.