Selecting A Serialization-Ready Third Party Logistics Provider Can Generate DSCSA Benefits Today
With the imminent arrival of the November 2017 deadline for DSCSA compliance, pharmaceutical manufacturers must take immediate action to secure their supply chain and continue efficient operations.
Under the law, brand owners that do not confirm their supply chain is DSCSA compliant before the deadline risk affecting patient health and may face regulatory penalties. According to a recent survey released in 2016 by TraceLink, a leading IT provider of DSCSA compliance solutions, 54% of pharmaceutical companies stated they are ‘well-prepared’ for serialization requirements.
The remaining 46% of unprepared manufacturers should follow these four steps to jump-start DSCSA compliance requirements.
Categorize Inventory – Only pharmaceutical drug products that the FDA considers “Prescription Only” requiring an “Rx” symbol are currently subject to DSCSA. Over-the-Counter products are not subject to the new laws. This includes drug products where certain States require a physician-issued prescription in order to dispense them. If the drug is not classified by the FDA as a prescription drug then it is not subject to the DSCSA. Another area of confusion involves drug products that did not go through the New Drug Application (NDA) or Abbreviated New Drug Application (ANDA) approval process. The FDA states that these products do not fall under DSCSA guidelines.
“Disreputable companies prey on ill-prepared manufacturers by assuring a ‘one-size-fits-all’ solution for DSCSA compliance that doesn’t exist,” states Riya Cao, CEO of LSPediA, a consulting firm specializing in DSCSA compliance solutions and products. “There is still time to achieve compliance before the November 2017 deadline with careful thought and decisive action.”
Brand owners and generic owners feeling time slip away may not be aware of the serialization requirements for each product in their portfolio. According to Adam Runsdorf, President of WDSrx, a third party logistics company specializing in life sciences, reputable pharmaceutical 3PL companies are prepared now to evaluate compliance requirements for different products and to manage serialized and non-serialized inventory effectively. “We are making substantial investments in financial and human resources to assist new and current clients with the receipt, storage and fulfillment of serialized and non-serialized products simultaneously,” states Runsdorf.
Upgrade Information Exchange – An important objective of the DSCSA is to minimize the prevalence of counterfeit and diverted pharmaceutical drug products in order to provide a higher degree of confidence and safety to patients taking prescription drugs. While the emphasis on serialization may seem to be focused on the labeling and packaging of pharmaceuticals, equal importance is placed on the exchange of data about prescription drug products from manufacturer to third party logistics service providers and at every point along the supply chain.
Brand owners that have completed the serialization process are transmitting additional information to third party logistics partners prior to shipment that was not previously required. To comply with DSCSA regulations, all shipments to third party logistics providers must be accompanied by commission, aggregation and ship events. The 3PL then updates brand owners with receipt events generated from their computer systems. According to John McLachlan, VP Consulting Services at ROC IT Solutions, “Serialization requires increased levels of communication and coordination between often different computer hardware and software systems at all points in the supply chain, including at the manufacturer and their third party logistics provider. This interaction generates comprehensive records of the history and location of prescription medications down to the smallest saleable unit, whether in transit from the manufacturer or safely stored at the warehouse facility.”
Manufacturers unprepared for serialization are at a disadvantage because their Information Technology backbone may not be upgraded to provide the additional information required for compliance. This situation is compounded if their third party logistics provider also does not have a strategy for serialization readiness. “For practical purposes, manufacturers should be concerned at this point in time if they or any other party along their pharmaceutical supply chain is not DSCSA compliant,” asserts Runsdorf.
Reputable 3PL providers that have achieved DSCSA compliance are prepared to work closely with new and existing clients to bridge the technology gap and apply their expertise to assist with gaining proper and approved shipping information.
Streamline Packaging and Labeling – The enhanced shipping information sent from manufacturers to meet DSCSA compliance also requires significant changes to current label standards. The DSCSA mandates that manufacturers must utilize a standardized method to individually identify the Smallest Salable Unit (SSU) available for purchase by authorized pharmacies or other dispensers.
The serialization method involves placing 2-D barcodes that contains the product ID, a serial number, expiration date and lot number on each SSU. Each pallet, case and individual unit must have their own unique 2D barcodes for improved tracking at every point within the supply chain. Once the various packaging levels are identified with unique serial numbers, the next step leading to track and trace is called aggregation. The aggregation consists of recording the relationship of the serial numbers of the items packed together with the serial number of their parent container. This allows any stakeholder within the supply chain to track every item with a single scan of the parent container barcode. According to Rick Bollinger, VP Sales North America for Optel Vision, a leader in development and installation of serialization technologies, “The transition to 2D vision systems and aggregation inspection for pharmaceutical manufacturers and their third-party logistics providers is the foundation for achieving DSCSA compliance requirements.”
Manufacturers or any of their supply chain partners that are not yet compliant must seek alternative means to comply with the regulations. Manufacturers that are compliant would benefit from a discussion with their third party logistics provider to confirm their completion deadline for serialization compliance. Site visits are recommended in order to view progress.
The transition to DSCSA compliance requires upgrades to handheld and desktop scanners that must read new 2D barcodes. Hardware and software upgrades to computers, WMS and ERP systems must be scheduled in order to process increased amounts of information and communicate efficiently with partners within the supply chain. Any doubt about completion deadlines conveyed by the third party logistics provider should raise serious concerns for serialized manufacturers and may prompt a search to select a 3PL with completed serialization compliance.
Manufacturers that are not yet serialized are faced with a more urgent need to work with a 3PL that is serialization-ready. As a pharmaceutical third party logistics provider with active on-site serialized packaging lines, WDSrx works with non-serialized manufacturers to serialize their products and assure uninterrupted flow within the supply chain.
The program is initiated when WDSrx receives non-serialized products from the manufacturer. Primary and secondary packaging are opened to break the shipment down to the smallest saleable units. While this process is underway, WDSrx acquires a range of DSCSA-compliant serial numbers associated with the pharmaceutical drug products. This is possible with the application of serialization technology provided by TraceLink which provided serialization solutions to WDSrx. According to Brian Daleiden, VP of Industry Marketing at TraceLink, which provides the world’s largest track and trace network, “Serialization requirements, from aggregation and serialization data exchange to verification of serialized identity and development of operational processes for managing serialized inventory, continue to evolve, making it crucial for manufacturers to work closely with their customers to understand emerging regulatory and business requirements, and partner with a 3PL that has a deep understanding of the implications for managing serialized product from production to distribution.“
With the serial numbers programmed into the system, the product is sent along the packaging line where labels received from the manufacturer are affixed to each bottle and where the 2D barcode, including the serialized information, is imprinted. The newly serialized items are re-packaged and stored on-site in the WDSrx warehouse for scheduled delivery to the manufacturer’s distribution network, where DSCSA-compliant shipping notifications and product details may be sent electronically to the final destinations.
Refine Reverse Logistics – The objective of the DSCSA is to increase the safety of pharmaceutical drug products within the supply chain. .New rules also affect pharmaceutical reverse logistics procedures for saleable returned products. Manufacturers working with third-party logistics providers that are not DSCSA compliant risk significant disruption to their business. After the November 27, 2017 compliance deadline, manufacturers involved with returned merchandise must verify the unique product identifier before further distribution occurs. Third party logistics providers must be DSCSA compliant in order to fulfill this service to manufacturer clients. This objective will have significant impact for product recalls initiated by the manufacturer or the FDA that are processed through the reverse logistics system.
Prior to serialization, products were generally recalled by lot number. Once the recall was issued, all products that comprised the entire lot were subject to the recall. For example, if a lot was produced on multiple days, every unit within that particular lot was returnable even if the problem occurred on a single production day. With implementation of serialization, the recalled items can be limited to the specific units produced on Saturday because of the unique identifiers imprinted on each item.
This development will reduce waste, maintain steady supply of unaffected medication and enable the recall process to proceed more efficiently. Efficient manufacturer processing of recalled pharmaceutical drug products will be severely compromised by non-compliant third party logistics providers.
Conclusion – The FDA set a ten-year implementation timeline for all requirements of the DSCSA ending in 2023. When the law was signed in 2013, the November, 2017 deadline for serialization seemed like a long time in the future to many manufacturers who delayed implementation strategies. Now that all eyes are fixed on the inevitability of DSCSA compliance, those manufacturers still have the opportunity to maintain their businesses by working with knowledgeable partners including serialization-ready third party logistics providers.
Business opportunities will completely shift to serialized companies. Reputable DSCSA-compliant third party logistics providers collaborate with serialized and non-serialized manufacturer clients to categorize inventory, upgrade shipping procedures, streamline packaging and labeling and refine reverse logistics programs, enabling them to thrive in the new regulatory environment within the pharmaceutical supply chain.