MANUFACTURER
DISTRIBUTOR
DISPENSER
Executive Summary
NAVIGATING THE DRUG SUPPLY CHAIN
SECURITY ACT: A GUIDE FOR PHARMACEUTICAL
MANUFACTURERS
The Drug Supply Chain Security Act (DSCSA) represents a significant shift in pharmaceutical supply chain management, aimed at enhancing security, combating counterfeit medications, and improving product traceability. This white paper provides a comprehensive overview of the DSCSA, its requirements, and strategies for compliance, specifically tailored for SMB & virtual manufacturers of pharmaceuticals.
What is the DSCSA?
LEGISLATIVE BACKGROUND AND GOALS
The DSCSA, enacted in 2013 as part of the Drug Quality and Security Act (DQSA), is a federal law designed to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States. This legislation aims to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful.
KEY PROVISIONS AND THEIR IMPLICATIONS
The DSCSA outlines critical steps to build an electronic, interoperable system to identify and trace prescription drugs distributed in the United States. Key provisions include:
- Product identification
- Product tracing
- Product verification
- Detection and response to suspect and illegitimate products
- Notification of illegitimate products to trading partners
and FDA - Wholesaler licensing
- Third-party logistics provider licensing
These provisions have far-reaching implications for all participants in the pharmaceutical supply chain, including manufacturers, repackagers, wholesale distributors, and dispensers.
Objectives of the DSCSA
ENHANCING SECURITY WITHIN THE DRUG SUPPLY CHAIN
The DSCSA aims to create a closed system where drug products can be tracked from the point of manufacture to the point of dispensing. This enhanced security helps to prevent the introduction and distribution of counterfeit, diverted, or otherwise harmful drugs.
COMBATING COUNTERFEIT MEDICATIONS
By implementing stringent tracing and verification requirements, the DSCSA makes it significantly more difficult for counterfeit medications to enter the legitimate supply chain. This protects patients from potentially harmful or ineffective treatments.
IMPROVING PRODUCT TRACEABILITY AND ACCOUNTABILITY
The act mandates the creation of an electronic, interoperable system to track and trace prescription drugs. This improves the efficiency of drug recalls and returns, enhances the detection of illegitimate products, and facilitates the verification of drug product legitimacy.
Challenges for Small Virtual Pharmaceutical Manufacturers
Compliance with the DSCSA presents significant challenges for virtual pharmaceutical manufacturers, but it also offers opportunities for enhancing operational efficiency and building trust with partners and consumers. By understanding the requirements, leveraging technology, and implementing robust strategies, virtual manufacturers can not only meet regulatory demands but also position themselves for long-term success in an increasingly secure and transparent pharmaceutical supply chain.
IDENTIFYING RESOURCE LIMITATIONS AND EXPERTISE GAPS
Small virtual manufacturers often face:
- Limited in-house technical expertise for implementing serialization systems
- Insufficient staff dedicated to compliance and quality assurance
- Lack of established processes for managing complex regulatory requirements
MANAGING IMPLEMENTATION COSTS WHILE ENSURING COMPLIANCE
Challenges include:
- High initial investment in serialization technology and software
- Ongoing costs for system maintenance and upgrades
- Potential production delays during implementation
ADDRESSING COMPLEXITIES IN NAVIGATING REGULATIONS
Small manufacturers may struggle with:
- Interpreting and applying complex regulatory requirements
- Keeping up with evolving standards and deadlines
- Coordinating compliance efforts across multiple contract manufacturing organizations (CMOs)
STRATEGIES TO MAINTAIN COMPETITIVENESS AMIDST COMPLIANCE DEMANDS
To remain competitive, consider:
- Leveraging compliance as a differentiator in the market
- Exploring partnerships or shared services to distribute costs
- Implementing scalable solutions that can grow with your business
Key DSCSA Requirements
Contact usSERIALIZATION REQUIREMENTS
1. Importance of Unique Device Identification (UDI)
Unique Device Identification is crucial for tracking individual units of prescription drugs
through the supply chain. It enables:
- Rapid identification of suspect an/or counterfeit products
- Enhanced patient safety through improved product recalls
- Better inventory control and supply chain efficiency
2. Barcoding and Serialization Standards Explained
The DSCSA requires manufacturers to serialize prescription drug products at the smallest saleable unit level. This involves:
- Assigning a unique, product identifier
- Encoding the identifier in both human-readable format and machine-readable 2D data matrix barcode
- Including the product's National Drug Code (NDC), serial number, lot number, and expiration date
PRODUCT IDENTIFICATION AND VERIFICATION
1. Essential Requirements for Product Identification
Manufacturers must ensure that each package and homogenous case of product contains:
- A unique product identifier
- A standardized numerical identifier
- Lot number
- Expiration date
2. How to Implement Verification Processes Effectively
Effective verification processes should include:
- Systems to authenticate the product identifier of suspect products
- Quarantine and investigation procedures for suspect products
- Clear protocols for notifying the FDA and trading partners about illegitimate products
- Mechanisms to respond promptly to verification requests from authorized trading partners
RECORD KEEPING AND REPORTING
1. Best Practices for Documenting Transactions
Maintain comprehensive records of:
- Transaction information (TI): Product name, strength, dosage form, NDC, container size, number of containers, lot number, transaction date, shipment date, and name and address of trading partners
- Transaction statement (TS): A statement that the entity transferring ownership is authorized and did not knowingly ship illegitimate product
2. Understanding Reporting Requirements to the FDA
Be prepared to:
- Report suspect or illegitimate products within 24 hours of determination
- Respond to FDA requests for information
- Maintain records of investigations and notifications
- Submit annual reports on pilot projects or other strategies to enhance the safety and security of the drug supply chain
Strategies for Compliance
Step-by-Step Guidance Tailored for Small Manufacturers
BEST PRACTICES FOR IMPLEMENTING DSCSA REQUIREMENTS
1
Conduct a thorough gap analysis of current systems and processes
2
Develop a phased implementation plan with clear milestones
3
Start with pilot projects to test and refine your approach
4
Engage early and often with contract partners to ensure alignment
5
Invest in staff training and development to build in-house expertise
TOOLS AND PLATFORMS WE RECOMMEND
- Cloud-based serialization solutions for flexibility and scalability
- Integrated Enterprise Resource Planning (ERP) systems with DSCSA compliance modules
- Blockchain technology for enhanced traceability and security
- Mobile scanning applications for easy verification and authentication
COLLABORATING WITH THIRD-PARTY LOGISTICS PROVIDERS
- Select 3PLs with demonstrated DSCSA compliance expertise
- Establish clear communication channels and data sharing protocols
- Conduct regular audits and performance reviews
- Collaborate on continuous improvement initiatives
TRAINING AND EDUCATION. RESOURCES WE PROVIDE FOR STAFF DEVELOPMENT
- Comprehensive DSCSA compliance manuals and standard operating procedures
- Regular webinars and workshops on regulatory updates and best practices
- Access to industry forums and networking events
- Personalized consulting services for specific compliance challenges
Stay Ahead of Compliance:
A Guide to DSCSA for
Wholesalers & Distributors
Ensure your business is protected and efficient with our expert insights and Level 4 solution for the Drug Supply Chain Security Act.
DSCSA...|
Executive Summary
In response to growing concerns about counterfeit and
substandard drugs, the Drug Supply Chain Security Act
(DSCSA) was enacted in 2013 as part of the Drug Quality and
Security Act. The DSCSA outlines critical steps for building an
electronic system to identify and trace certain prescription
drugs as they are distributed across the United States. By
enhancing the ability to track each package’s origin and
movements, the act aims to prevent harmful drugs from
reaching consumers, thus safeguarding public health. For
wholesalers and distributors, comprehending the DSCSA's
requirements is not just about compliance; it’s about playing a
pivotal role in ensuring drug safety on a national scale.
Key Compliance Requirements for Wholesalers & Distributors
PRODUCT TRACING:
Under the DSCSA, all prescription drug transactions require documentation that identifies both the drug and its previous handlers. This includes Transaction Information (TI), and Transaction Statements (TS) — collectively known as "two (2) T's." Wholesalers and distributors need robust systems to document and store this data accurately, sharing it with partners downstream.)
VERIFICATION SYSTEMS:
A crucial aspect of DSCSA compliance is maintaining protocols to verify that prescription drugs are legitimate and fit for distribution. Verification involves checking product identifiers such as the National Drug Code (NDC), lot number, and expiration date. Additionally, having the ability to respond to verification requests from authorities within a specific time frame is essential for compliance.
RECORDKEEPING:
To ensure traceability, all transaction records must be retained for a
minimum of six years. Effective recordkeeping not only assists in regulatory inspections but also supports operational transparency and traceability, making it easier to manage recalls and investigations swiftly.
Implementation Tips for Effective Compliance
LEVERAGE TECHNOLOGY
Implement advanced 2D barcode systems that integrate with
your ERP and supply chain management software. These technologies facilitate automated tracking, reduce manual errors, and enhance overall efficiency in data handling and sharing.
STAFF TRAINING AND EDUCATION
Regularly update your team on DSCSA requirements
and provide training on recognizing suspicious activities. Empowering your staff with knowledge ensures they are prepared to maintain compliance during day-to-day
operations.
COLLABORATE WITH TRUSTED PARTNERS
Work closely with technology vendors and regulatory consultants who are well-versed in DSCSA compliance. Their expertise can offer valuable insights and technological solutions tailored to your business’s specific needs.
INTERNAL AUDITS AND REVIEWS
Establish periodic audits to evaluate your compliance
strategies. Regular audits help identify gaps, assess the effectiveness of current practices, and implement necessary adjustments proactively.
The Benefits of Being Compliant
Contact usAchieving DSCSA compliance does more than just fulfill legal obligations; it positions your business as a trusted leader in the pharmaceutical supply chain. Compliance ensures your ability to prevent and address drug recalls effectively, minimizing potential disruptions and maintaining a steady supply flow. Furthermore, it builds confidence among consumers and stakeholders, enhancing your brand’s reputation for safety and reliability. By leading in compliance, you differentiate your business as a resilient, forward-thinking partner, fostering lasting relationships and gaining competitive advantage.
Contact usTimelines and Tools
ENGAGE AND EQUIP: INTERACTIVE RESOURCES FOR EVERY STEP.
TIMELINE
Unless you have been granted a Wee (Wavier, Exception, or Exemption) you need to adhere to the DSCSA interoperability enforcement requirement by November 27, 2024
COMPLIANCE CHECKLIST QUIZ
Evaluate your company’s readiness by reaching out to us for a brief 30 min call to discuss your companies’ situation.
MIGRATION PROCESS AND PROCEDURES
If you currently use another system/platform for your DSCSA compliance needs but feel there could be a better alternative out there, please reach out. We have a detailed migration process in place to eliminate risk and increase user acceptance.
Need assistance with DSCSA implementation? Our expert compliance specialists are here to support you with personalized advice and solutions. Reach out to our team today.
Book a callNavigating the Drug Supply
Chain Security Act: A Guide
for US Dispensers
DSCSA
Executive Summary
The Drug Supply Chain Security Act (DSCSA), enacted in
November 2013, aims to enhance the security of the
pharmaceutical distribution supply chain in the United States.
It introduces strict requirements to allow for better tracking
and tracing of prescription drugs as they move through the
supply chain. Pharmacies and dispensers have a crucial role in
this process.
Here’s how DSCSA requirements affect pharmacies and dispensers.
PRODUCT VERIFI CATION: PHARMACIES MUST
- Pharmacies must verify the legitimacy of the prescription drugs they receive. This means they need to ensure that drugs have come from authorized trading partners who are registered and compliant with FDA standards.
- Retail and health system pharmacies must authenticate serialized product identifiers for products in the event of a suspect product or an investigation into illegitimate products.
TRACEABILITY AND PRODUCT TRACING:
- Pharmacies are required to receive and store Transaction Information (TI), and
- Transaction Statements (TS) from their suppliers for each drug product received. This information should be maintained for at least six years. Transaction Information includes details such as the proprietary or established name or names of the product, the strength and dosage form, the National Drug Code (NDC) number, container size, number of containers, lot number, transaction date, shipment date (ifdifferent from the transaction date), and the business name and address of the person from whom and to whom ownership is being transferred.
- The Transaction Statement includes a statement by the seller that they are authorized, received the product from an authorized trading partner, received transaction information and transaction statement from the prior owner, did not knowingly ship a suspect or illegitimate product, and has systems and processes in place to comply with verification requirements under the law.
SUSPECT AND ILLEGITIMATE PRODUCTS:
- Pharmacies must have processes in place to identify, investigate, and report suspect and illegitimate products to the Food and Drug Administration (FDA) and communicate such findings with trading partners ifnecessary.
- They are required to quarantine and investigate any product they have reason to believe is suspect, including verifying the product identifier.
LICENSING:
- Pharmacies must engage with trading partners that are properly licensed. Dispensers need to ensure that they only transact with entities that are authorized under DSCSA guidelines.
RECORD KEEPING:
All documentation related to product tracing must be retained in either electronic or paper format for at least six years from the date of the transaction. This requirement ensures that there is accountability and transparency within the supply chain.
ELECTRONIC SYSTEMS AND INTEROPERABILITY:
- By 2023, the act aimed to implement an interoperable electronic system for product tracing across the drug supply chain. Pharmacies need to be prepared to integrate such systems to comply with future standards.
- The FDA delayed enforcement of the DSCSA until November 27, 2024. The FDA also announced exemptions for specific dispensers and, in certain cases, their trading partners, from particular mandates outlined in section 582 of the Food Drug and Cosmetic Act (FD&C Act), See section Understanding the FDA’s Small Dispenser Exemption
Compliance with DSCSA requirements is crucial for maintaining the integrity of the drug supply chain. Pharmacies and other dispensers must apply these regulations to help prevent counterfeit, stolen, or contaminated drugs from entering the market, thereby ensuring patient safety and maintaining the quality of drugs within the pharmaceutical distribution network. The integration of these practices not only meets legal obligations but also contributes to higher industry standards and patient trust.
Major check points
Your business needs a trustworthy solution provider that will navigate your through complexities of the regulation and mitigate the risks. Here are the the major check points you need to consider choosing a partner:
DSCSA EXPERTISE:
Choose a provider with a comprehensive understanding of the DSCSA regulations and a track record of success fully helping pharmacies comply with them.
END-TO-END TRACEABILITY:
Ensure the provider offers systems capable of managing Transaction Information (TI), and Transaction Statements (TS), essential for compliance.
INTEROPERABILITY:
Possibly consider a solution that is fully interoperable with existing pharmacy systems and other supply chain partner systems, facilitating seamless data exchange.
AUTOMATED VERIFI CATION PROCESSES:
Look for solutions with automated suspect product verification and notification processes, making it easier to identify and handle suspicious or illegitimate drugs.
SECURE AND EFFI CIENT RECORD-KEEPING:
Ensure the solution provides robust record-keeping capabilities to store necessary compliance data securely for at least six years.
SUSPECT PRODUCT MANAGEMENT:
Choose a provider offering comprehensive tools for the identification, quarantine, and investigation of suspect and illegitimate products, along with reporting capabilities to the FDA.
REGULATORY REPORTING AND ALERTS:
Select a provider that offers real-time regulatory updates and alerts to keep your pharmacy informed of any changes to the DSCSA requirements.
TRAINING AND SUPPORT:
Look for a provider that offers comprehensive training for your staff and ongoing support to ensure all team members are well-equipped to use the compliance tools effectively.
FLEXIBLE AND SCALABLE SOLUTIONS:
Ensure that the solution can grow with your pharmacy, allowing for scalability as your needs evolve and as regulatory requirements become more stringent.
By taking these steps, your pharmacy can confidently choose a solution provider equipped to ensure compliance with the DSCSA, maintaining the integrity of your operations and safeguarding your patients.
SMALL DISPENSER
EXEMPTION!
Understanding the FDA’s Small Dispenser Exemption
On June 12, 2024, the Food and Drug Administration (FDA) announced exemptions for specific dispensers and, in certain cases, their trading partners, from particular mandates outlined in section 582 of the Food Drug and Cosmetic Act (FD&C Act) until November 27, 2026.
What/Who is a “small” dispenser
For the purpose of this exemption, a “small dispenser” is defined as one whose owning corporate entity employs 25 or fewer full-time pharmacists or certified pharmacy technicians. These exemptions pertain to certain aspects of section 582 of the FD&C Act, mainly focusing on enhanced distribution security requirements, as detailed in the FDA’s communication on this issue.
Recently, the FDA has clarified that they do not plan to extend the one-year Stabilization Period, which was originally introduced in August 2023. This period was meant to give trading partners additional time to adapt to, troubleshoot, and develop the necessary systems and procedures to comply with the Drug Supply Chain Security Act (DSCSA) enhanced security requirements. The FDA advises any trading partners, including manufacturers, repackagers, distributors, and dispensers, who might be concerned about meeting these demands to submit a waiver request using the WEER process by August 1, 2024.
Industry Recommendation
The industry strongly recommends that any dispensers not covered by the small pharmacy exemption and who are unsure about their compliance capability with DSCSA by November 27
should consider submitting a WEER request to the FDA as soon as possible. Large retail pharmacies and health systems across the U.S. report receiving only a fraction of the expected
serialization data files (GS1 EPCIS), sometimes as little as 20-30%. With less than four months remaining before the stabilization period ends on November 27, 2024, even the largest
dispensers might not be fully prepared.
ARE SMALL DISPENSERS EXEMPT FROM ALL DSCSA REQUIREMENTS?
No, the exemptions do not negate small dispensers’ existing commitments under DSCSA. For instance, small dispensers must still:
- Identify and verify their drug suppliers as authorized trading partners per Section 581 of the FD&C Act.
- Know where their product tracing data is stored and how to access it.
- Be equipped to identify potentially harmful products, with procedures in place to quarantine, investigate, and report as needed.
- Develop and adhere to comprehensive drug purchasing policies and procedures (P&Ps) that are accurate to their location’s operations.
WHAT ARE SMALL DISPENSERS ACTUALLY EXEMPT FROM?
Exemptions concern the enhanced drug distribution security requirements stated in sections 582(g)(1) and 582(d)(4) of the FD&C Act. Specifically, small dispensers are exempt from using electronic and interoperable methods to:
- Exchange transaction information and statements with trading partners.
- Conduct verifications of suspect and illegitimate products.
- Collect transaction data for package-level recalls.
- Gather information to respond to regulator inquiries about suspect or illegitimate products.
DISPENSERS ARE STILL LIABLE FOR THESE TASKS BUT CAN EMPLOY MANUAL OR EXISTING METHODS. HOW TO DETERMINE IF YOU ARE EXEMPT?
- Identify your parent company.
- Count the number of pharmacies under the parent company.
- Calculate the number of full-time pharmacists and technicians across all pharmacies owned by the parent company, based on November 2024 filings.
- Document this information and evaluate whether your company needs to apply for a waiver, exemption, or exception as suggested by the FDA if the total full-time employees exceed 25.
HOW TO INFORM TRADING PARTNERS ABOUT YOUR EXEMPTION?
Inform all direct trading partners if your organization qualifies for an exemption. The FDA does not publicly provide information on granted waivers or claimed exemptions. Organizations receiving a waiver or exemption should notify their trading partners, and NABPTM’s Pulse directory will include optional fields for this purpose.
WHAT IF I DON’T QUALIFY FOR THE EXEMPTION AND AM UNSURE ABOUT COMPLIANCE BY NOVEMBER 27, 2024?
NABP recommends submitting an FDA WEER promptly. The FDA advises all trading partners, including those not qualifying for the exemption, to submit waiver or exemption requests by August 1, following published guidelines on preparing these requests. The process involves detailing your current compliance efforts, why readiness may be unachievable, and your strategy for achieving compliance eventually. Although durations for WEERs vary, the FDA may request regular updates on compliance progress.
WHAT IF I HAVE SYSTEMS IN PLACE BUT ONLY RECEIVE PARTIAL DATA FROM SUPPLIERS?
Even if pharmacies have electronic and interoperable systems and connections with trading partners, incomplete data from upstream partners means non-compliance with DSCSA. Filing a WEER should be considered in these situations.