A version of this story was published on DC Velocity in July 2017 – View it here.
Companies within the pharmaceutical supply chain must consistently deliver the correct product at the right time to the proper person. Patient lives depend on the efficient collaboration between manufacturers, wholesalers, logistics service providers and dispensers. Stakes are equally high when products are removed from sale or prevented from entering the commercial market. There is no room for error when manufacturers designate goods for the reverse distribution pipeline as bulk pharmaceutical returns.
STRICT RULES FOR PHARMACEUTICAL RETURNS
The pharmaceutical industry adheres to strict guidelines imposed by government and other regulatory authorities. To maintain operations, warehouses and distribution centers are regularly audited for compliance. Reverse logistics procedures and forward logistics procedures are equally stringent, with constant monitoring and reporting to assure accuracy.
According to Jason Solomon, Reverse Logistics Manager at WDSrx, a pharmaceutical logistics service provider, “Manufacturers invest heavily in bringing product to market, so when items are flagged for the reverse logistics process, each step is highly scrutinized.”
SIX REASONS WHY
There are six primary reasons manufacturers take medications out of regular distribution channels:
Out-Dated Product – Products that are past their expiration date cannot be sold. In 1979, the Federal Food and Drug Administration required an expiration date on all prescription and over-the-counter medicines. Expired medical products can be less effective or risky.
Certain drugs may experience a change in their chemical composition. Others are at risk of acquiring bacterial growth which may lead to serious illness.
Expired product cannot be sold and must be destroyed to neutralize any possibility of entering the commercial market. In the warehouse, expired product situations can be minimized with improved record-keeping to identify the cause of the problem.
R&D Product-Failed Batches – Laboratory testing of medications is regularly conducted for the entire product life cycle from formulation and development through manufacturing and periodically after production. These tests are conducted to assure the effectiveness of the product according to label specifications.
When results indicate a failed test, the manufactured lot is isolated in the warehouse and marked for destruction.
Recalls – The Food and Drug Administration (FDA) has jurisdiction over recalls involving drugs, medical devices, blood and plasma products, vaccines, other biologics and veterinary products. Recalls are actions that remove a product from the market. They may be initiated by FDA request or on the manufacturer’s own voluntary initiative.
The main causes of recalls are failed specifications, sterility issues and product mislabeling.
New Federal regulations being implemented during the next six years as part of the DSCSA (Drug Supply Chain Security Act) are increasing the safety of medications by requiring detailed tracking down to each individual sales unit which is currently not required.
Recalls in the future will be less disruptive to the supply chain because the technology will make it possible to remove only affected products from shelves.
Withdrawals – The Food and Drug Administration is recognized internationally for their industry-leading practices designed to assure the safety of drug products for Americans.
Post-market withdrawals of medications are rare and occur in cases where previously-approved products are shown to cause adverse patient reactions. Withdrawals are initiated by the FDA for voluntary action by the manufacturer or by an FDA order when required.
During a ten-year period from 2001-2010, three drugs were withdrawn out of 222 prescription drugs approved by the FDA during that time.
Damages – The wrapping is as important as the present in the pharmaceutical industry. Primary and secondary packaging protects medications on their journey within the supply chain. Rules vary by manufacturer, however damages to packaging may result in the affected goods being flagged for destruction.
Goods may be damaged during transit, while conveying from one location to another within the warehouse or if handled improperly. According to WDSrx Reverse Logistics Manager Jason Solomon, “Damage we can see is visually archived and noted in shipping documents before notifying the product owner who determines how to move forward.”
In some instances, damages are not visible and result from transport mix-ups. When pharmaceutical drug products are stored with fruits and vegetables or other potential contaminants, they may be adversely affected by transfer of odors and impurities.
Although packaging is intact, the stock is accepted at the dock but does not enter active inventory. The manufacturer determines whether the goods are re-packaged for sale or consigned for destruction.
Short-Dated Product – Medications nearing their expiration date and are not yet consigned to a buyer are often marked for reverse logistics services. The process may begin anywhere from less than six months to eighteen months from expiration date, depending on manufacturer requirements for the specific drug.
Warehouses that handle pharmaceuticals operate on a First-Expiration-First-Out schedule, with products shipped according to the proximity of their expiration dates. This assures older inventory is moved first and also creates an efficient stock rotation system. Distributors normally ship product with at least six months remaining until the expiration date.
There is a second option for short-dated products in addition to destruction.
Charitable organizations collect and distribute short-dated pharmaceuticals donated by manufacturers to low income, uninsured patients. The only difference between short-dated product and the identical product in retail pharmacies is the expiration date.
The preference for medications in retail environments to have a longer timeframe before expiration is a benefit to many in the most vulnerable communities who can receive treatment. The Dispensary of Hope, a prominent charitable medication distributor, helps thousands of patients with treatment made possible by corporate donations.
PREPARING FOR THE END
When items are designated for reverse distribution, the warehouse technician accesses the warehouse management system (“WMS”) to re-classify the product status from an active picking location to ‘non-active’ status in preparation for disposition. When in ‘non-active’ status the system will not allocate those items for active order picking.
Pharmaceutical warehouses operate according to strict regulatory requirements mandating specific temperature control, security protocols, vaults and cages for Controlled Substances, heightened cleaning and maintenance procedures and monitoring for temperature, humidity, motion and vibration.
These circumstances sometimes trigger additional steps in order to properly handle products in the reverse distribution channel.
The affected product is then collected and moved to a segregated location within the warehouse which can be a dedicated space reserved for product disposition or an area that is clearly separated from active product aisles.
With final approval, the inventory is either held for donation if it is short-dated, or enters the destruction process.
Stringent regulations are in place to monitor pharmaceutical drug products throughout the disposition process. Items for destruction are accompanied to a facility where they are incinerated. Some logistics providers utilize special recycling operations that convert waste into electric power that may be returned to the surrounding community.
Items set for destruction at WDSrx are accompanied to a special facility run by Covanta Environmental Solutions that is authorized by the DEA to convert pharmaceutical drug products and Controlled Substances (Schedules I-V) from waste into energy. The Covanta Lake County Resource Recovery Facility functions as a power plant producing clean electric power generated from waste.
The WDSrx headquarters facility in Boca Raton, FL recycled 378,380 pounds of pharmaceutical drug products with Covanta in 2016 creating 368 megawatt hours of electricity able to power 33 homes for an entire year. “The pharmaceutical reverse logistics process is environmentally conscious and socially responsible. Our team and our supply chain partners including Covanta take our responsibilities seriously, helping maintain the integrity of the entire pharmaceutical supply chain,” asserts Solomon.
A Certificate of Destruction is issued after the product is destroyed. The procedures for destruction of Controlled Substances require an additional document, called a DEA Form 41. This form includes a witness statement to corroborate the product was destroyed according to proper procedures.
Manufacturers and other companies that handle large quantities of pharmaceutical drug products may outsource disposition to a Logistics Services Provider.
Pharmaceutical logistics services providers hold special licensing from the FDA and DEA to perform this special function. When contacted, these specialists will determine whether the product includes any Controlled Substances or hazardous materials.
When specific product details are received, arrangements are made to transport the goods directly to the logistics services provider facility. After arrival, the cargo is delivered to the reverse logistics department where each item is carefully inventoried to verify quantities and products.
Once inventory is confirmed, the items are incinerated on site or transported to a destruction facility for final disposal, where a Certificate of Destruction and, if required, a DEA Form 222 is completed and registered.
RECOMMENDATIONS ASSURING COMPLIANCE
Disposing of pharmaceutical drug products is a complex task involving multiple steps to conform to regulatory requirements. When circumstances call for product disposal, pay attention to three important situations in order to avoid unnecessary delay.
First, pay close attention to packaging and labeling of goods marked for destruction. Mislabeled boxes, pallets or drums will be flagged during the inventory process when every item is checked for accuracy.
Jason Solomon, from WDSrx, recalls one instance when drums that were labeled “Biohazard” were withheld from destruction, delaying the job even though the contents did not contain hazardous material. According to Solomon, “The drums marked as biohazardous materials were removed from the area and quarantined until the situation was resolved later in the day.”
Second, because products and their packaging are incinerated, consider using packaging materials that burn more effectively. For example, plastic or fiber drums are more easily disposed than stainless or other steel drums.
Third, maintain an accurate inventory of all products to be destroyed. Details about product description, strength, delivery form and package size are required prior to delivery and are confirmed before destruction. Diversion from procedures or incorrect inventory documentation will result in potential costly delays.
BULK DESTRUCTION MADE EASY
Under certain situations, pharmaceutical drug products must be removed from the commercial market or taken out of active inventory from warehouses prior to distribution. In most cases, these products are destroyed to keep them out of the supply chain.
The reverse logistics process for bulk pharmaceuticals is conducted under strict regulations to assure patient safety. Specialized procedures handled by expert technicians move goods through multiple steps until their ultimate destruction.
Manufacturers can avoid potential delays by following guidelines and contracting with a reputable logistics services provider authorized to handle and familiar with regulations surrounding pharmaceutical drug products.
For further information contact: Larry Hotz, WDSrx Marketing Manager at firstname.lastname@example.org
 Press, Associated. “The Odds of a Drug Having a Significant Safety Issue after Winning FDA Approval Are Nearly 1 in 3, Study Finds.” Los Angeles Times. N.p., 09 May 2017. Web. <http://www.latimes.com/science/sciencenow/la-sci-sn-fda-drugs-safety-20170509-story.html>.