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Stakeholders face challenges and benefits from a more secure pharmaceutical supply chain.
Beginning Jan. 1, 2015, manufacturers and distributors will need to have in place systems able to transmit information on prescription drug movement in the United States from plant, to packagers and various wholesalers and distributors, and ultimately to dispensers. FDA is charged by the Drug Supply Chain Security Act (DSCSA), a key component of the Drug Quality and Security Act (DQSA) of 2013, to issue guidance and rules for establishing such a process and is consulting with all stakeholders on viable approaches and policies (1).
FDA held a public workshop in May 2014 (2) to gain input from manufacturers and other supply-chain parties on developing standards for what eventually will be an interoperable tracking system for prescription drugs. FDA officials and industry leaders further reviewed DSCSA requirements, along with broader supply-chain security issues, at a June conference in Washington, D.C. sponsored by the Parenteral Drug Association (PDA).
The larger aim of drug tracking is to prevent drug diversion and to keep counterfeit and substandard products out of the US supply chain, observed Janet Woodcock, director of the Center for Drug Evaluation and Research (CDER), in opening the FDA workshop (2). Woodcock cited the recent discovery in the US of counterfeit drugs to treat cancer, hypoglycemia, and hormone replacement, and noted the dangers of stolen or diverted products entering the distribution system. Electronic tracking, Woodcock noted, also would help manage product recalls, prevent shortages, and deter criminal elements from introducing substandard drugs into the US market.
FDA is working with supply-chain parties to tackle its multiple assignments under DSCSA, starting with guidance on how manufacturers and distributors should identify suspect products and then notify other parties that such products are not legitimate. More challenging is a November 2014 deadline for draft guidance that sets standards for interoperable exchange of required information. That includes transaction information (TI), transaction history (TH), and transaction statements (TS)--the “3Ts”--every time a product changes hands. Initially, data will apply to drug lots, as opposed to individual packages, and can be provided via paper or electronic systems. Supply-chain participants have to maintain data records for six years, and they have to be able to provide drug transaction information fairly quickly when requested by FDA or other agencies or is needed to notify trading partners when illegitimate products are detected. By 2017, manufacturers will need unique identifiers on drug packages and electronic data transmission. A fully electronic package-level tracing system is set for 2023, most likely based on the Electronic Product Code Information Services standard.
There is broad agreement among supply-chain parties that clear standards are crucial to success, but considerable debate about crafting the specifics. Woodcock noted at the FDA workshop that it’s difficult to reach agreement on standards, formats, and practices because that usually requires some parties to change what they’re doing. Workshop participants indicated a need for clearer definitions of basic concepts, such as “efficient interoperability” and “electronic data interchange.” There was discussion about use of packing slips to identify the contents in shipments, which is common practice for manufacturers, but raised objections from wholesalers that reliance on packing slip information would slow down the distribution process.
There also was debate over using email to send transaction information, an approach that seems simple and direct to some parties, but raises concerns about security and data control for others. Similarly, participants considered whether transmission of a PDF document constitutes dissemination of an electronic or paper document. Electronic transactions that disclose product prices are a concern for manufacturers, who fear that such information could encourage pilferage or theft and undermine rate negotiations.
Some stakeholders questioned the viability of the envisioned step-wise data transmission system called for by the legislation. An alternative suggestion was for all parties to submit information to a centralized data hub, which could provide records to determine if the product is legitimate when a problem arises, instead of each supply-chain partner passing and accepting thousands of product transaction reports. There also was a proposal that FDA limit its standards to what information has to be transmitted, and leave it to trading partners to figure out how to send data and messages. FDA officials agreed on the need for flexibility but also noted that the legislation requires the agency to issue standards for the program. Overall, stakeholders expressed strong interested in seeing FDA’s policy earlier than November to help them meet the January 2015 implementation deadline.
Costs and benefits
While FDA crafts further guidance, manufacturers are preparing for both short-term and long-term changes, which are laid out in a DSCSA implementation timeline prepared by The Pew Charitable Trusts (3). Manufacturers already have spent millions of dollars on technology to implement drug serialization systems and anticipate that it will be costly and challenging to integrate new technologies with existing operations, according to stakeholder perspectives on drug serialization and traceability, prepared for the Pew by Booz Allen Hamilton (4).
Pharmaceutical companies report that off-the-shelf software often is suitable to support databases and communication systems, although customization is needed to meet individual business needs. Most pharma companies plan to outsource systems development and implementation, and a host of IT consultants and vendors have emerged to tackle such projects.
Despite notable costs associated with serialization and tracking, there is optimism that such initiatives will translate into important gains for the industry. Not only will improved supply-chain visibility help block distribution of counterfeit or compromised pharmaceuticals, there is the potential for added business benefits, according to respondents to the Pew/Booz Allen study (3). In addition to facilitating drug recalls and enhancing cargo security, manufacturers anticipate gaining more timely and accurate production and shipping information. This information could help reduce production lead times, enhance inventory control, process returns more efficiently, prevent distribution of expired goods, help manage supplies for clinical trials, and improve tracking of drug samples. More detailed information on product movement through the supply chain, moreover, could help manufacturers ensure the accuracy of sales and chargebacks and support drug rebate reconciliation. Future gains might extend to improved accuracy in drug-reimbursement systems, better medication adherence by patients, and support for FDA reporting requirements for high-risk products. All together, these developments could support efforts to prevent drug shortages.
As standards emerge for a drug-tracking system in the US, policy makers are looking to facilitate policy harmonization with the European Union, China, and other nations. A broad goal is to agree on barcodes on pharmaceuticals that are acceptable in all markets. European governments are establishing unit-level tracking policies, with requirements for anti-tampering features on packages and guidelines for serialization and authentication. Most countries are adopting two-dimensional barcodes, although China may opt for a linear barcode requirement. Different requirements and implementation timelines in other regions, unfortunately, would add to the complexity of establishing pharmaceutical traceability systems that gain international acceptance.
1. J. Wechsler, Pharm. Tech., 38 (4) (2014) p. 1416.
2. FDA, FDA DSCSA Public Workshop Summary-May 8–9, 2014, accessed June 3, 2014.
3. The Pew Charitable Trusts, Timeline for the Drug Supply Chain and Security Act, accessed June 1, 2014.
4. The Pew Charitable Trusts, Implementing a Pharmaceutical Serialization and Traceability System in the U.S.
About the Author
Jill Wechsler is
Washington editor, tel. 301.656.4634, firstname.lastname@example.org. Read Jill’s blogs at