Overview
The Drug Supply Chain Security Act (DSCSA) is a federal law intended to enhance the security and traceability of prescription drugs throughout the supply chain. Signed into law in 2013, it was given a ten-year implementation timeline. However, in November 2023, the FDA delayed the final enforcement deadline by a year to to November 27, 2024. Now, anyone who creates, packages, distributes, or dispenses prescription drugs has one more year to comply with the final phase of the rollout.
Is your operation DSCSA-ready?
In this piece, we’ll examine the evolution of the act and why it’s vitally important. We’ll also give you tips for choosing a third-party partner to help you achieve DSCSA compliance. Read on to ensure your team is prepared for the enforcement deadline.
A Refresh: What is the DSCSA?
The legislation outlines a series of rules that manufacturers, distributors, dispensers, and traders of prescription drugs must follow to ensure the safety of the drugs they handle. The goal is noble—to protect consumers from counterfeit, adulterated, or otherwise harmful drugs by establishing a standardized system for tracking and tracing pharmaceutical products. Ultimately, the intention is that these mechanisms will identify and handle suspect or illegitimate products, thus ensuring a more secure supply chain.
General requirements include:
Product tracing: The DSCSA requires that each prescription drug product be traced from the manufacturer all the way through to the dispenser. This means that manufacturers, distributors, and dispensers must keep detailed records of each transaction involving a drug, including the name of the product, the quantity, and the date of the transaction.
Serialization: The DSCSA requires that prescription drug products be serialized, or assigned a unique identifier, at the unit level. This allows each product to be tracked and traced throughout the supply chain.
Verification: The DSCSA requires that distributors and dispensers verify the authenticity of prescription drug products before they are distributed or dispensed. This helps to prevent the distribution of counterfeit or adulterated drugs.
Notification: The DSCSA requires that manufacturers, distributors, and dispensers notify the FDA and other stakeholders in the event of a suspect or illegitimate product.
Repository: The DSCSA will require that a product tracing system be established to enable the exchange of information about prescription drug products among trading partners in the supply chain. This system will be called the “enhanced drug distribution security system” (EDDSS), and it will serve as a repository for the information required by the DSCSA.
DSCSA: A Brief History
When you account for the grand scale at which the FDA sought to build an interoperable system to track and trace drugs in the U.S., it makes sense that the execution of the DSCSA would be complicated.
It also makes sense that it would need to be phased out over a long period to allow stakeholders (including repackagers) to comply with requirements gradually.
Picture the scope. There are more than:
- 44,900 pharmacies and drug store businesses [1]
- 20,000 prescription drug products approved for marketing [2]
- 6,700 different medical device product categories [3]
- 2,655 pharmaceutical companies in the U.S. [4]
2015 marked the first major milestone in the rollout, commonly called the Lot-Level Management phase. [5]
This required manufacturers, wholesalers, repackagers, and eventually pharmacy dispensers to share chain-of-ownership data for transactions at the lot/batch level.
2017 marked the second major milestone, commonly called the Item Serialization phase. [6]
This required affixing unique identifiers like barcodes onto every prescription drug package intended for sale in the U.S. Pharmaceutical distributors and dispensers also had to verify and authenticate product legitimacy, confirm the product identifier, and check for any signs of tampering or counterfeiting. They were required to provide a statement verifying all transaction information and history when transferring ownership of prescription drugs. If stakeholders suspected any instances of illegitimate products, they were required to promptly investigate and report them.
Why Is the November 2024 Enforcement Deadline Important?
In 2024 the DSCSA will fully enforce requirements to improve the safety and security of the U.S. pharmaceutical supply chain. Counterfeit, adulterated, and stolen drugs still pose significant risks to patients and the healthcare system. By implementing stricter requirements, the DSCSA aims to reduce the likelihood of these risks occurring.
The goal is to make it more difficult for counterfeit or adulterated drugs to enter the supply chain undetected. In this last phase, known as the Serialized Item-Level Traceability phase, all trading partners will need to share chain-of-ownership data back to the product’s origin in a serialized way.7
Serialization of all prescription drug products will have to happen at the package level, with products needing enhanced unit-level tracking of serial number, lot or batch number, and expiration date, The latest saleable returns requirements will also require distributors to verify these product identifiers before any returned products can be reintroduced to the market. This also aims to reduce the likelihood of legitimate products being diverted or stolen and then returned to the manufacturer for credit.
In addition, the enhanced information exchange requirements (part of the EDDS discussed above) will provide greater visibility into the movement of prescription drug products through the supply chain. This will enable stakeholders to quickly identify and address potential issues, such as suspicious products or instances of diversion.
Ultimately, enforcement of all DSCSA is important because it fosters an environment for a more secure and transparent pharmaceutical supply chain in the United States. This helps protect patients and improve public health.
What to Know to Prepare for DSCSA
If your operation supports the pharmaceutical supply chain, the first step toward DSCSA-readiness is to familiarize yourself with the specific requirements due by November 27, 2024 and take proactive measures to ensure compliance before then.
Likely, you have already begun this process. If not, we suggest consulting with legal and regulatory experts or a third-party partner who has already established compliant measures to navigate the complexities of the DSCSA implementation and examine if you have any gaps in your system.
You’ll need to follow these key requirements to achieve compliance:
1. Verification Requirement: As discussed above, wholesale distributors will be required to verify the product identifiers of certain prescription drugs in their possession. Healthcare manufacturers should ensure that they have implemented the necessary systems and processes to provide accurate and verifiable product identifiers for their products.
2. Enhanced Drug Distribution Security: Manufacturers should review their existing security procedures and make any necessary enhancements to prevent the distribution of suspect or illegitimate products. This may include implementing improved quarantine, investigation, and notification processes.
3. Collaboration with Trading Partners: Manufacturers should maintain open lines of communication and collaborate closely with their trading partners, including wholesale distributors and dispensers. This will help ensure smooth compliance with the DSCSA requirements, including the exchange of transaction information, history, and statements during product transfers.
4. Serialization and Unique Product Identifiers: Manufacturers should already have implemented product serialization and assigned unique identifiers, such as barcodes, to their prescription drug packages. If any adjustments or improvements are needed to meet the DSCSA requirements, manufacturers should address them promptly to ensure compliance by the deadline.
5. Training and Education: It is crucial for manufacturers to educate their employees about the DSCSA requirements and provide appropriate training on compliance procedures. This will help ensure that all staff members are aware of their responsibilities and can effectively contribute to meeting the DSCSA obligations.
6. Regulatory Updates: Manufacturers should stay updated on any regulatory guidance or changes related to the DSCSA. The FDA and other relevant regulatory bodies may provide additional information or clarification leading up to the November 2024 deadline. Staying informed will help manufacturers adapt their processes accordingly.
Bottom line: If you are a healthcare pharmaceutical manufacturer, dispenser, or any adjacent partner, it will serve you to prepare for these changes, which will have a significant impact on the way prescription drugs are handled and traced through the pharmaceutical supply chain in the United States.
How Non-Compliance Could Impact Your Business
In the previous section, we discussed how important DSCSA-readiness is for the pharmaceutical supply chain industry, as well as the patients ultimately served. Beyond those benefits, DSCSA-readiness has real business implications. Want to build a supply chain that is well lubricated to help get your product to the market or keep it there—without disruption? Read on.
The truth is that certain enforcement actions and penalties could follow if a healthcare supply chain partner is not compliant with the DSCSA after the upcoming deadline. These could vary based on the regulatory authority’s discretion and the severity of the non-compliance.
Here are some potential outcomes:
Regulatory Actions: Regulatory agencies, such as the FDA, may take enforcement actions against non-compliant operators in the pharmaceutical supply chain . These actions can include warning letters, fines, or other regulatory measures.
Loss of Business Opportunities: Non-compliance with the DSCSA may result in the loss of business opportunities. For example, trading partners, including wholesale distributors and dispensers, may refuse to work with manufacturers who do not meet the DSCSA requirements. This could lead to a loss of market access and potential customers.
Product Recalls or Quarantine: In cases of serious non-compliance, regulatory authorities may order product recalls or quarantine of a manufacturer’s products. This can be costly, disruptive to operations, and may damage the manufacturer’s reputation.
Legal Consequences: Non-compliance with regulatory requirements can expose a healthcare manufacturer to legal liabilities. They may face lawsuits from affected parties, such as patients who have been harmed by non-compliant products or other stakeholders who have suffered financial losses.
Reputational Damage: Failing to comply with regulatory requirements like the DSCSA can lead to significant reputational damage for a healthcare manufacturer, distributor, or adjacent partner. Negative publicity, loss of trust from consumers and business partners, and damage to the brand’s image could have long-lasting effects on the company’s reputation.
Given the importance of patient safety and the integrity of the drug supply chain, regulatory authorities are likely to take non-compliance with the DSCSA seriously. But don’t worry. There is help to ensure you have what you need to implement the necessary systems and processes within this crucial timeline.
Helping Pharmaceutical Supply Chain Clients Prepare for the DSCSA
At LifeScience Logistics (LSL), we have been thinking deeply about the upcoming regulatory changes and what they will realistically entail. As noted above, if your company is looking for additional help to become DSCSA-compliant by November 2024 , it is crucial to work with a partner who has already been through the process themselves—and who can help you examine if you have any gaps in your system. This is why we’ve carefully taken the time to build a sophisticated warehouse management software system and a track and trace software solution to help LSL clients comply with the DSCSA requirements.
How we can help:
A key part of complying comes down to ensuring data interoperability with our various partners. Across our book of business, we have encountered various stages of readiness among our commercial partners, who are navigating variable data requirements and formats. We know that each partner has different standards and software systems internally. By customizing a DSCSA-compliant system with each of our partners, we bring the flexibility so many companies need.
In addition, there are two primary projects we implemented to prepare for the November 27, 2024 DSCSA compliance date. First, we made sure our warehouse software and systems are ready to receive and track client products. Second, we ensured that we are ready to exchange data with our clients and their customers’ software and systems. The second project required extensive time working hands-on with our client’s IT teams to understand each other’s data needs.
Today, we are prepared to track every individual case on every pallet that passes through our warehouse. We work closely with each customer’s electronic product code information services (EPCIS) information to process and track product information. We do this whether we’re shipping and/or storing a full pallet– or breaking a pallet down to ship partial components.
We also equip our clients with information to ask partner organizations. This way, they can facilitate the smoothest possible electronic delivery of crucial information needed for compliance with the DSCSA.
Going forward, we are prepared to consistently evolve. New exceptions and alterations are required in our process to support our client pharmaceutical product tracking and tracing needs, keep their product compliant in the market, and manage data exchange upstream and downstream for our clients.
Work With a DSCSA-Ready Partner to Keep Your Product Supply Chain Running Efficiently
To learn more about how LifeScience Logistics can help your business manufacture, repackage, distribute, or trade products in a DSCSA-compliant manner, contact us on our website or call 469-844-3700 and ask for our Vice President of Business Development, John Blackington.
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FOOTNOTES
[1] https://www.ibisworld.com/industry-statistics/number-of-businesses/pharmacies-drug-stores-united-states/#:~:text=There%20are%2044%2C900%20Pharmacies%20%26%20Drug,increase%20of%203.5%25%20from%202022.
[2] https://www.fda.gov/about-fda/fda-basics/fact-sheet-fda-glance
[3] https://www.fda.gov/about-fda/fda-basics/fact-sheet-fda-glance
[4] https://www.enterpriseappstoday.com/stats/us-pharmaceutical-industry-statistics.html#:~:text=US%20Pharmaceutical%20Industry%20Statistics%20by%20total%20numbers,pharma%20companies%20in%20the%20US.
[5,6,7] https://www.gs1us.org/supply-chain/standards-and-regulations/drug-supply-chain-security-act