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Reverse Logistics: The Complete Back-Story

Reverse-Logistics
Reverse Logistics agents at WDSrx connect directly with manufacturers to ensure that the returns process is handled according to cGMP guidelines.

Introduction

The Reverse Logistics process affects products that are removed from commercial sale or prevented from entering the market. The Reverse Logistics Department at WDSrx performs these services for manufacturers of medications, dietary supplements, and medical devices.

Purpose

two large garbage bins in front of warehouse

Warehouse Technicians prep recycle and waste bins for pick up.

Reverse Logistics involves receiving drug products and returning them to the manufacturer or selecting them for regulatory-compliant product disposition based on the returns policy of the manufacturer or directives by regulatory authorities. Reasons for pharmaceutical returns range from expired product to R&D product-failed batches, recalls, withdrawals, damages, or short-dated products. 

1) Expired Product Products that are past their expiration date cannot be sold. In 1979, the Federal Food and Drug Administration (FDA) 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 products 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.

2) 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 ensure 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.

3) Recalls The Food and Drug Administration (FDA) has jurisdiction over pharmaceutical 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 through regulatory compliant destruction or on the manufacturer’s own voluntary initiative.

The main causes of recalls are failed specifications, sterility issues, and product mislabeling. Federal regulations detailed in the DSCSA (Drug Supply Chain Security Act) are increasing the safety of pharmaceutical distribution by requiring detailed tracking down to each individual sales unit.

Future pharmaceutical recalls will be less disruptive to the reverse logistics supply chain because serialization technology makes it possible to remove only affected products from shelves.

4) Withdrawals Post-market pharmaceutical withdrawals are rare and occur in cases where previously approved products are shown to cause adverse patient reactions.  Pharmaceutical withdrawals are initiated by The Food and Drug Administration (FDA) for voluntary action by the manufacturer or by an FDA order when required.

close up of warehouse technician opening box

Warehouse Technician opens a returned package to begin the Reverse Logistics process on a damaged product.

5) Damages Primary and secondary packaging protects pharmaceuticals 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 pharmaceutical warehouse or if handled improperly. Damage to exterior packaging is 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 pharmaceutical goods will be re-packaged for sale or consigned for destruction.

6) 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 that older inventory is moved first and also creates an efficient stock rotation system. Distributors normally ship products with at least six months remaining until the expiration date.

There is a second option for short-dated pharmaceutical 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 identical product in retail pharmacies is the expiration date.

The preference for medications in retail environments to have a longer time frame 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.

Extreme accuracy and precise record-keeping are of vital importance for the reverse logistics process. Manufacturers must demonstrate that they have a reverse logistics program in place for regulatory compliance. Several states, cities, and municipalities hold manufacturers financially responsible for their products that are not disposed of properly. 

The Reverse Logistics process exists to maintain the safe distribution of legitimate medications to ensure patient health. According to WDSrx president Adam Runsdorf, “The reverse logistics process within the pharmaceutical supply chain is equally as precise as requirements for proper forward logistics.” Manufacturers require an experienced and trusted pharmaceutical returns partner for correct product disposition.

Program Benefits

warehouse technician breaking down cardboard boxes

Warehouse Technician breaks down corrugate for recycling.

Reverse logistics programs at WDSrx provide peace-of-mind for manufacturers that appreciate that the entire process is administered by trained WDSrx professionals. Reverse logistics requires significant investments in time, labor, and regulatory compliance. Manufacturers value the benefits received from reputable reverse logistics companies, which support their business operations..

The WDSrx reverse logistics team controls costs for manufacturers by ensuring that returns policies and guidelines are respected. Where possible, additional steps are taken to assure credit is provided and properly applied to client accounts. 

Diversions are reduced as medications are properly monitored once removed from commercial channels. This is important because it removes potentially harmful products from distribution and increases patient safety.

Quality Assurance and Regulatory Compliance 

warehouse technician with handheld scanner

All returned product is tracked with handheld DSCSA compliant scanners.

WDSrx conforms to regulatory requirements to maintain compliance with Federal, State, and Local legal authorities. WDSrx is registered by the U.S. Drug Enforcement Administration (DEA),the Environmental Protection Agency (EPA), and relevant state authorities as a Reverse Distributor enabling regulatory-compliant product disposition.

 The experienced WDSrx Quality Assurance and Regulatory Compliance department actively monitors operations to assure proper training according to cGMP guidelines. The reverse logistics departments at our Boca Raton, FL headquarters and our Sugar Land, TX location are both separated from normal operations at WDSrx and are only accessible by select employees. 

Reverse Distribution Channels

The Reverse Logistics department acts as an agent for manufacturers. Bulk and commercial returns are accepted from pharmaceutical distributors and manufacturers.

1) Bulk Returns To accommodate the growing need for regulatory-compliant reverse distribution, WDSrx processes bulk pharmaceutical returns at their Sugar Land, Texas and Boca Raton, Florida locations. The Sugar Land pharmaceutical warehouse is approved as a Large Quantity Generator (LQG) for pharmaceutical waste by the Texas Commission on Environmental Quality and by the federal Environmental Protection Agency. The WDSrx facility in Boca Raton currently manages reverse logistics and received approval from the Florida Department of Environmental Protection to operate as a Large Quantity Handler to fulfill requests for bulk returns and destruction.

Bulk returns are large-volume return orders. When manufacturers notify WDSrx about a bulk waste order, WDSrx arranges transport if required. Upon arrival at WDSrx, reverse logistics technicians inventory each item and clients are notified of any discrepancies between the documentation and the physical inventory. With client approval, products enter the pharmaceutical destruction process and a Certificate of Destruction is issued. Hazardous or non-hazardous destruction logs and manifests are issued and for Controlled Substances, DEA Form 41 is issued after destruction, including witness statements.

warehouse technician empties box

Warehouse Technician separates product from packaging for regulatory compliant destruction.

2) Commercial Returns Commercial returns occur when WDSrx partners with manufacturers for complete returns administration. The WDSrx reverse logistics team connects directly with client retail accounts to manage the entire process, from receiving return orders to shipping, disposition, and documentation in compliance with government and regulatory authorities. Specialized solutions are created according to manufacturer return policies and reimbursement is distributed accordingly. The benefit of commercial returns is that it enables the client to concentrate on core competencies and reduces the cost of in-house administration. 

Serialization/DSCSA

By 2023, the law requires having the ability to document product recall data to item-level detail. WDSrx already tracks all products throughout the reverse logistics process and is in compliance with DSCSA, which creates savings in time, labor, and cost. Pharmaceutical recalls were originally managed by lot level, but are now being targeted to involve the precise individual units affected. WDSrx offers track-and-trace capability to access records from date and location of the original sale.

Environmental Protection

two large bins with damaged product and recycled materials

Damaged product (left) was sent to an environmentally safe destruction site while the corrugate (right) was sent to a recycling center.

Sustainable business practices are a priority for WDSrx and for partner vendors in order to minimize the environmental impact from destruction of pharmaceutical drug products. WDSrx is licensed by the State of Florida Department of Business and Professional Regulation, the Texas Commission on Environmental Quality, the federal Environmental Protection Agency, and the U.S. Drug Enforcement Agency (DEA) for this purpose. These procedures are designed to minimize environmental impact and to make sure that potentially dangerous drugs cannot re-enter the marketplace. Several WDSrx locations are certified with Drug Distributor Accreditation by the National Association of Boards of Pharmacy (NABP DDA) verifying warehouse processes that minimize diversion and reduce counterfeiting.

WDSrx partners with specialized facilities for incineration of pharmaceutical drug products, including Controlled Substances (Schedules CII-CV). Some facilities convert waste into clean electric power that preserves the environment, generates clean energy, and prevents diversion of pharmaceutical drug products. 

Conclusion

Pharmaceutical and dietary supplement manufacturers can choose to take advantage of third-party, regulatory-compliant product disposition and returns. At WDSrx, reverse logistics capabilities provide Confidence Beyond Compliance maintaining high satisfaction levels with clients and their patients. 

Are any Controlled Substances (CII) included in your return? If so, please press "Yes" and complete the DEA 222 Request Form. You can also contact Jason Solomon at jsolomon@wdsrx.com or (561) 998-3885 x316.