Sep 06, 2020
The Drug Supply Chain Security Act (DSCSA), signed into law in November of 2013, contained a number of deadlines and requirements applicable to pharmaceutical manufacturers, repackagers, wholesale distributors, dispensers, and 3rd party logistics providers (also known as trading partners).
The purpose of the DSCSA is to create a system for tracking and tracing certain types of prescription drugs through the supply chain from manufacturer to dispensing. According to the FDA, some requirements began in November 2014 and several key requirements began at various stages in 2015. The requirements, development of standards, and the system for product tracing will continue to be phased in until 2023.
The primary provision of the DSCSA is to create a traceable record of pharmaceutical drugs from where the drug was produced to the entities who have handled it. This includes lot-level tracing and transaction information.
To accomplish this, the DSCSA includes a second provision requiring product verification ensuring that specific drugs are legitimate and unaltered. This includes serialization requirements for prescription drugs as well as tracking specific transactional data.
Under the requirements all trade partners must be “authorized trading partners” and entities must be able to verify the validity of products and be able to uniformly identify illegitimate products. Partners must also have a system to quarantine, investigate and report on suspect or illegitimate products.
The law includes the final provision that addresses this detection and response, mandating the requirements to quarantine suspect drugs and report promptly to the FDA.
Wholesaler licensing and third-party logistics provider (trade partner) licensing are also a component of the DSCSA. The DSCSA requires authorized trading partners to be actively licensed through the state (individual databases for each state), the FDA and other Federal Agencies. Atlas Certified provides instant and continuous status of represented credentials for 250+ primary certifying organizations, including all relevant licensing databases to the DSCSA.
Together the provisions are designed to focus on patient safety with the intent to dramatically reduce the number of counterfeit/illegitimate and adulterated products on the market over a 10-year rollout beginning at the signing of the act in 2013 through final provisions taking effect in 2023.
Initially drugs will be traced and tracked at the lot level, switching to unit-level tracking after the first 10 years of the act have passed. Up to this point the logging and record maintenance around drug change-of-ownership was permitted via paper maintenance. As of November 2017, the act required the “Three T’s” of data to be transmitted via electronic format.
The Three T’s are transaction information specific to the pharmaceutical products as they change ownership. As of January 2015, manufacturers, repackagers, and wholesale distributors are required to provide any entity that receives products with all relevant transaction data including:
Pharmacies and dispensers who receive this information are required to accept and keep that information on file for at least 6 years.
Transaction Information includes the following:
The Transaction History is an electronic statement including transaction information for each prior transaction tracing product handling back to the original manufacturer
The Transaction Statement is an electronic attestation by the entity transferring ownership of the product that states it:
Companies within the Pharmaceutical and Healthcare industries are required to “accept ownership of product with applicable transaction information, transaction history, and transaction statements,” in order to avoid noncompliance and potential government penalties, including fines and increased industry regulation. provides verification history with primary source screenshots, monitoring and custom alerts notifying of critical events (Renewal, Expiration, Change in Status, Adverse Action, etc.). This allows for proactive decision-making and increased regulatory compliance to reduce human error, revenue delays, fines, operating and public relations risk.
The legal mandate of the DSCSA identifies all prescription products as “in scope” unless a manufacturer notifies its trading partners that a product is considered to be exempt. Any products flagged as being exempt from the act will be made available through customer-facing portals.
Under the act the following products are exempt:
Even if products are not already on the list of exemptions they may still be exempt from following many of the provisions of the DSCSA if they fall within certain types of transactions. In most cases, products not within the exempt list would need to follow the provisions of the DSCSA, but in the case of these transaction types they are exempt. This is a list of transactions that are not considered “DSCSA transactions” and are therefore exempt but only as long as the products fall within the specific transaction:
“Medical convenience kits” refers to a collection of finished medical devices, which may include a drug product or biological product, assembled in kit form strictly for the convenience of the purchaser or user, if:
Furthermore, the drug or biologic product contained in the kit is:
Trade partners must still be notified of product exemptions. Wholesale distributors, 3PLs, repackagers and dispensers may choose whether or not to accept the exemption and may still require transaction documentation in order to remain compliant with the DSCSA. As such, they can choose not to accept products despite falling within exempt transactions.
The transition to electronic tracking is a leading compliance concern. In order to reduce the risks and costs associated with compliance, new software and IT resources will need to be adopted by businesses. Businesses will also need to perform due diligence with logistic partners to verify licensure and certifications as well accurately identify and address gaps in onboarding and compliance.
The November 2017 serialization requirements of the DSCSA are particularly relevant here since each product needs to be marked with product identifiers, lot numbers, expiration dates and serial numbers.
Supply chain partners at every level need to be capable of sharing, processing and storing all that pharmaceutical serialization data. Likewise, brand owners need to able to verify that supply chain partners are compliant, or they face penalties under the roll out of the DSCSA.
Because of the need to adopt serialization on product packaging (first at the lot level and then at the unit level) as well as the need to exchange information around the movement and change of ownership of these products at every step of the supply chain, there could be a significant cost to organizations both in production and packaging as well as at the IT level for tracking and verification.
According to data shared by Packaging Digest, the cost impact of product serialization, label changes, and tracking could be as much as $500,000 per packaging line. These costs and changes include considerations for:
Organizations along the supply chain will require significant planning and implementation efforts, especially when you consider existing changes to current contractual obligations as well as the negotiation of commercial responsibility.
For example: where does financial responsibility fall for dedicated lines since pharma companies will likely have individual perspectives about whether to contribute to these costs or if financial responsibility can be split between contract firms and other pharma customers.
Expect there to be an impact on relationships as the legislation raises the bar on national distributor licensing standards.
Furthermore, pharmaceutical companies will have to factor compliance requirements (packaging and labeling for example) into contracts so responsibilities and accountability are clearly identified which could also impact existing relationships.
The law will certainly have a massive impact at the consumer level and daily requirements of the pharmacist. The Pew Charitable Trusts stated in a recent article that, “pharmacies are the last stop in the distribution supply chain before medicines reach patients, so their participation is an essential component of the new DSCSA system.” With the correct action plan, the law could positively affect patient care and the pharmaceutical market for many years to come.
The new regulations are clearly meant to benefit the consumer, but compliance with the DSCSA has numerous benefits for businesses in the supply chain beyond avoiding regulatory fines. Benefits come in the form of compliance ROI that are the result of improving work flow and streamlining operations.
There’s the initial cost of investment to deal with, but there is a measurable return one can expect from compliance. Potential benefits of DSCSA compliance include:
The DSCSA rollout has dates in place creating a measurable timeline to help businesses forecast changes and plan accordingly.
Key timeline events include:
Based on these dates and the information covered in this guide there are specific benchmarks that can be used to grade DSCSA compliance and measure preparedness.
Today’s manual pre-qualification and monitoring process is inefficient, expensive, and ultimately provides static data. Through automation, Atlas eliminates costs associated with the manual process, including: wasted labor resources, third-party background check services, human error, expired data, legal liability and time-to-market. With the help of for license data, pharmaceutical companies can pre-qualify and manage represented and critical licenses to make proactive decisions and ensure timely compliance.
Now is the best time to prepare for global serialization regulation, such as upcoming regulations in the European Union. Work with Atlas Certified for verification compliance as well as scalable solution partners capable of uploading data to the EU hub so that your business is ready for compliance with the EU’s Falsified Medicines Directive.
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