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Despite delay in enforcement of Drug Supply Chain Security Act's new serialization requirement, getting compliant now is key.
A minority of pharmaceutical manufacturers are on track to meet the next big Drug Supply Chain Security Act (DSCSA) deadline-just around the corner. Although the FDA has announced it will delay enforcement until 2018, beginning November 27, 2017, pharma companies are required by law to serialize individual packages of drug products using a product identifier (a GS1 Global Trade Item Number® [GTIN®] or an FDA National
Drug Code [NDC]), serial number, lot number, and expiration date, and embed this information in a 2D barcode.
In May, GS1 US, McKesson, and AmerisourceBergen Corporation (ABC) conducted a barcode assessment to gain insight into the industry’s readiness for the November deadline. The assessment involved physical scanning over 16,000 actual products in two distribution center locations-and this snapshot in time showed that only a single-digit percentage of products were fully and accurately serialized to meet the upcoming DSCSA requirements. That leaves a majority of companies playing catch-up.
Recognizing that some manufacturers may need additional time to ensure that products are properly labeled with the required identifiers, the FDA issued a one-year reprieve in its June 30 draft guidance. That means that while the deadline remains in force, the agency will not take action against manufacturers who do not affix or imprint the product identifier to their packages and homogeneous cases until after November 26, 2018.
The FDA’s enforcement delay is intended to minimize possible disruptions in the distribution of prescription drugs in the US. The road to compliance takes time, and by starting now, drug manufacturers have an opportunity to put the necessary systems in place before they will incur any potential penalties. It also leaves time for collaboration with trading partners, system testing, and refinement to optimize results.
All the buzz about compliance deadlines shouldn’t eclipse the bigger picture, or the reasons behind the DSCSA law. It’s important to remember that the DSCSA was enacted to improve patient safety and care, and will also result in benefits to supply chain stakeholders. Compliance with serialization requirements helps move the industry forward with better traceability and accountability for the origin, chain of custody, delivery, and availability of authentic prescription drugs. Patients will benefit from improved access to the drugs they need and assurance that those medications are exactly what their physicians prescribed. The serialized identifiers will help ensure that the drugs delivered match what was ordered and have not been replaced with counterfeit products, which endanger patients and compromise the industry’s profile and profits. Patient safety will be enhanced by a granular chain of custody record that permits visibility into the location of the drugs at all times. That also enables quick, accurate recall of product in the event it is needed.
Manufacturers, wholesalers, and dispensers also will benefit from unit-level serialization. Inventory will be better tracked; traceability drives better efficiencies throughout the supply chain. Expedience in solving any supply issues can help prevent negative consequences downstream. Altogether, the work involved in meeting DSCSA requirements is going to benefit all of the legitimate stakeholders in the pharma industry and its customers.
Why are most companies behind schedule in meeting a federal regulation that promises improvements throughout the supply chain-from manufacturers all the way through to patients? Implementation challenges and uncertainties have caused some to adopt a wait-and-see approach. However, making the transition to unit-level serialization, and all the other data requirements specified, won’t happen overnight-so the time to “wait and see” is over.
In leading the GS1 Healthcare US Initiative, we have learned from discussions with member companies about challenges and solutions for DSCSA implementation. We’ll share some of these here.
While the DSCSA defines the “end game” requirements, the roadmap-procedures and best practices for arriving at the compliance destination-has mostly been left for industry to develop. Some companies have been reluctant to move forward without FDA-specified implementation guidelines to follow.
However, a few companies are leading the way in working out the details and best practices. For example, as reported in the April issue of Pharm Exec, Johnson & Johnson Supply Chain (JJSC), ABC, and GS1 US recently published a case study detailing the results of a pilot test they conducted, and offering suggestions for the industry based on their experience. Among other findings, conclusions emphasized the need for repeated testing to identify any potential problems and areas for improvement. The importance of top-level, company-wide commitment and collaboration between business partners were also highlighted.
The law specifies that manufacturers must serialize their products as of November 2017. Two years from then, wholesalers will only be allowed to receive and ship serialized product. (Pharmacists must meet the same requirements by November 2020). Does that mean the manufacturer cannot produce a product today that is lot-based and has an expiration date after November 2019?
Clarity on this issue will help. Meanwhile, the best solution remains to make the transition to serialized production sooner, rather than later.
When the November 2019 wholesaler deadline kicks in, saleable returns will have to go through a verification process that is yet to be fully defined. Some industry members have been voicing concern that the verification conditions could change parameters for their implementation of Phase II unit-level serialization requirements. As a result, they may be disinclined to invest in changes that might need to be reengineered in a few years.
As in any operational transition, converting manufacturing lines from lot-based to unit-based serialization represents an investment in software, hardware, and temporary reductions in productivity while the changes are being implemented. The lead time to install a production line averages six to eight months. Purchasing scanners and inline or label printers to print a clear and concise GS1 DataMatrix, engaging a third-party solution provider to manage the serial numbers, and simple production line efficiencies all contribute to the time and cost of conversion. Some companies are simply waiting to flip the switch-even if they have the machinery all ready to go-until the clock runs out.
Presumably, manufacturers will regain any losses in productivity when the transition is complete. Service providers can help navigate the logistical infrastructure and setup to maximize efficiencies. The best way to optimize the transition process is to stay abreast of guidelines as they develop, and learn from those who have gone before. Stay tuned in to the industry’s progress in identifying best practices.
Time and money always top the list of resources needed to implement changes. Another resource that is in increasingly short supply is the solution providers that manage the transition and serial numbers. There are so many companies just beginning the process that demand for solution provider services is tight.
Thanks to the FDA, there’s still time to meet requirements before noncompliance is enforced. The best advice offered by those companies who are ready now is:
The scope of changes needed to serialize packages with robust data codes may seem daunting for companies that aren’t there yet. Recently, a collaborative group of drug manufacturers, distributors, and providers compiled an extensive reservoir of information to help the industry address the DSCSA requirements. The result is a 42-page document available for download on the GS1 US website.
To begin, manufacturers will need a GS1 Company Prefix in order to obtain and assign the required product identifiers. The prefix is easily acquired by filling out an online application on the GS1 US website.
Once the Company Prefix is assigned, individual products can be identified with a GTIN to meet the requirements of the law. As a best practice, an FDA NDC number may also be embedded in a GTIN.
The GTIN uniquely identifies not only the individual sale unit of packaging, but also higher-level groupings such as homogeneous cases, homogeneous pallets, etc. So, for example, a 30-tablet bottle of Drug XYZ will have one GTIN, and a 12-bottle case of the same drug will have a different GTIN. The NDC only identifies the drug itself, and does not distinguish between the individual sale unit and higher-level groupings.
DSCSA requires manufacturers, distributors, and dispensers to capture and share information, using standards for interoperable exchange of information, about transactions in the supply chain in which ownership of pharma products is transferred.
The pharma industry is already using GTINs for product identification, to comply with the first phase of DSCSA requirements. Many companies are also leveraging Electronic Product Code Information Services (EPCIS) to facilitate the exchange and synchronization of data with products’ movement through the chain.
EPCIS provides a standard language to express this information in an interoperable manner. Although EPICS is not specifically required, it was selected by FDA as a method that can be used to comply with DSCSA data exchange requirements. Hence, many companies will adopt EPCIS as the preferred method for doing so.
EPCIS is designed to support full track and trace of products for many different purposes. Using EPCIS to meet the requirements of DSCSA lays the foundation not only for compliance, but also for using supply chain data for a myriad of purposes, including tracking and tracing recalled product, anti-counterfeiting, product authentication at point of use, optimization of supply chain routes, and more.
In the JJSC/ABC pilot, the EPCIS data allowed ABC to confirm receipt of every item shipped from JJSC without even opening the boxes. Using EPCIS message standards streamlined the process by establishing similar data file expectations across the supply chain and between the two trading partners.
EPCIS provides visibility to pinpoint a product’s location at any time and place in the supply chain, and the possible uses of this data for business benefit are limitless. In this respect, EPCIS is far superior to siloed approaches such as devising a single-purpose data model exclusively for DSCSA compliance. The EPCIS approach allows all companies to maximize the return on the investment made in gathering the data in the first place.
Many of the leading companies in the US pharma market have stated their desire to standardize on EPCIS and the GS1 US Implementation Guideline: Applying GS1 Standards for DSCSA and Traceability, Release 1.2 as the preferred means to meet DSCSA data requirements. Using EPCIS helps assure best practice for DSCSA data reporting and the greatest degree of interoperability with other trading partners.
Some companies will make the November 2017 deadline-some will not. The one-year delay in enforcement gives the rest of the industry time to catch up, and to learn from the experience of those who have gone before. Start now, and you’ll be ready when FDA enforcement begins.
Keep in mind while tackling each of the challenges and steps that ultimately, serialization will convey huge benefits beyond compliance. It will ensure continued product access for patients and customers while helping enable investigation of counterfeit and diverted products-adding integrity and security to the supply chain and to brand owners. End-to-end visibility means that recalls, where necessary, can be executed efficiently. The automation of processes and resulting minimization of errors will ultimately increase patient safety, on top of all the brand and supply-chain benefits it holds.
Start now, if you’re not already on your way. Manage the transformation from the top down in your organization and make sure all functions and departments are collaborating and communicating. Reach out to engage solution providers and trading partners in your process, and run tests when you’re ready. Take advantage of available information resources, including the experiences of companies that are farther along in the process, and GS1 US Implementation Guidelines. The benefits will be worth it.
Peter Sturtevant is Senior Director, Industry Development, GS1 US