Last November, after much anticipation, the U.S. pharmaceutical industry saw the enactment of the Drug Quality and Security Act (DQSA), which includes in Title II theDrug Supply Chain Security Act (DSCSA). The DSCSA addresses national pharmaceutical track and trace requirements, and industry stakeholders must now prepare themselves for the first round of deadlines for lot-level traceability starting January 1, 2015. The DSCSA supersedes previous state e-pedigree laws and provides additional time for companies to start preparing for item-level serialization, which will not be required to begin until 2017. The expectation for a full e-pedigree system to be implemented is in 2023.
In preparation for these guidelines, it is important for companies to follow a framework as they assess their organizations’ readiness to meet DSCSA compliance. A successful program will do so by evaluating the impacts to their business processes and governance, technical solutions, and trading partner relationships.
- How Do Current Business Processes Align With DQSA?
The first step in setting up a successful serialization program is assessing the current state of business processes, including the impacted functional roles and related responsibilities. Organizations must analyze their operations against the requirements of the DSCSA, and align on process execution and governance to achieve the desired, future state of compliance. This will set the foundation of the program and is a crucial entry gate for subsequent implementation of process and technology changes.
The main requirements of the DSCSA are aimed to promote traceability of product movement, verification and reporting, and trading partner oversight. Organizations will have to look at how meeting these requirements will affect processes across various functional areas, including distribution (shipping and receiving), quality, and procurement (supplier relationship management), and customer service. To do so, organizations should consider the following practices.
- Collaborate Across Internal Functional Areas
Although much discussion on e-pedigree in previous years has surrounded the technology that will support it, any serialization program that solely focuses or makes decisions in a siloed manner will not succeed. For instance, when it comes to gathering transaction data to meet the transaction information / history / statement (TI/TH/TS) requirements, solely looking at the options from an IT or enterprise resource planning (ERP) system lens may cause a company to overlook the impacts to physical tasks and activities occurring within its distribution center operations. Similarly, in tackling the serialization requirements, packaging functions cannot begin serializing product with GS1 data matrix codes without discussion and alignment with all key stakeholders around aspects, such as master data discovery and management, integration with sales and operations planning (S&OP) processes, and alignment to production schedule and execution.
- Define Standard Operating Procedures (SOPs) Per Requirements In Law
How stakeholders will meet the requirements of the DSCSA is up for interpretation. Stakeholders should leverage guidance provided by FDA and other industry organizations, such as GS1, Healthcare Distribution Management Association (HDMA), and Pharmaceutical Distribution Security Alliance (PDSA). They can then make updates to existing SOPs where possible, taking into consideration the FDA’s definitions of key terms. Companies will need to assess the processes impacted by the sections within the DSCSA on tracing, verification and reporting, and trading partner management.
For tracing requirements, companies will want to consider not only the information that is transferred downstream in the supply chain but also the reverse logistics processes, an area that is often overlooked in the supply chain. The DSCSA has defined sections on returns, and organizations will need to consider how their current processes of handling claims will need to be modified to meet the lot level requirements.
Organizations will benefit from anticipation of exception cases in the verification process and deciding the manner to address them outside of their normal processes. No doubt, when the first deadline hits in January 2015, inconsistencies between the data and material sent and received is bound to take place, and a period of adjusting to unforeseen issues and exception cases will be needed.
Ultimately, patient safety is the most important consideration of the DSCSA and so organizations will need to find ways to avoid creating operational burden over minor errors while still maintaining compliance. Industry stakeholders have already begun voicing their concerns on this issue to the FDA and asking that the focus be on meeting the intent of the law while transactional stabilization and exception management processes are stabilized.
- Maintain Flexibility To Meet Future Guidance
The FDA has put out a time line of its implementation plan, which includes deadlines for when additional guidance, regulations, and other deliverables are expected to be published. Organizations must allow flexibility in the way they govern their processes in order to react to future standards, especially given some of the short lead times between the guidance release deadlines and the compliance dates.
- What Technical Solution Should Be Used for DQSA?
The FDA currently does not mandate in the DSCSA what technical solution pharmaceutical stakeholders should use to meet the requirements. From mid-February through mid-April, a public docket was opened for submission of comments and feedback on current practices and feasibility. A public industry workshop was also held on May 8th and 9th, 2014. Additional guidance will be released per the FDA time line that addresses the feedback raised during these public forums. In the meantime, industry stakeholders must assess the various technical mechanisms available to meet these requirements, and consider these factors:
- Ease of implementation
- Wide-spread adoption by trading partners
- Cost effectiveness
- Long-term sustainability
For example, consider the ways to meet the TI/TH/TS requirements. Currently, stakeholders have multiple ways of exchanging transaction data, including the use of Advance Shipment Notice (ASN), Electronic Product Code Information Service (EPCIS), Drug Pedigree Messaging Standard (DPMS), invoices (paper and electronic), and packing slips. When it comes to ease of implementation, the tempting choice is to stick with the current system the organization is using, thus reducing the need for investment or training. The current practice may not prove to be the best though when long-term sustainability is factored in. Supply chain stakeholders are also starting out at different levels of maturity on the supply chain security curve and will not likely be able to adopt methods on the same time lines.
Paper invoices may meet the first three criteria for the bulk of stakeholders in the short-term, especially for smaller companies with limited resources that are getting started on their serialization programs late in the game. These smaller companies may not have the budget planned to invest in an electronic system, or expertise to integrate GS1 standards into their processes; therefore, they may default to paper invoices, which are easy to modify at relatively no cost. However, in the long-term, paper invoices will be more costly to maintain, especially with the DSCSA requiring a minimum of six-year retention on all transaction documentation. In addition, paper methods will be phased out by 2017 and are not a feasible mechanism for responding to the 48-hour deadline for verification requests. Several wholesalers have already put out communication indicating that electronic exchange will be the method of choice, and in some cases, deviations will result in fines.
Electronic methods, such as the EDI 856 ASN, which many stakeholders are indicating would be the preferred method moving forward, have their own issues in adoption. At the end of April, HDMA released guidance on applying the EDI 856 ASN under the requirements of the DSCSA. Many industry stakeholders will likely refer to this document in their planning activities, especially as they wait for FDA to publish draft guidance. While EDI 856 exchanges are commonly used from manufacturers to wholesalers, variability in the data mapping and usage across 3PLs, ship-to locations, and sold-to entities must be addressed. Additionally, while many look to the ASN for lot-level traceability, it is expected that the concept of a “serialized” ASN will be usurped by the emerging EPCIS standard for managing the tracking and posting of events impacting serialized product.
- How Should Trading Partner Relationships Be Managed for DQSA?
The beauty and the challenge of the DSCSA is that it addresses all stakeholders in the pharmaceutical supply chain with the exception of providers and patients. Since collaboration will be needed across the industry, this means that trading partner relationships are that much more critical. Amidst the complexity of the collaboration, here are ways for organizations to achieve success working with one another.
- Listen And Be Heard
The FDA has shown through its collaborative activities in the past several months that it recognizes the value of gathering feedback and comments from industry stakeholders in order to gauge how realistic the expectations set forth are. As expected, industry associations and consortiums have been proactive in voicing their support and concerns early on, while other stakeholders are taking more of a backseat. Though listening and taking a “follow-the-leader” approach has its benefits, it is important to stay engaged and involved in the discussion. Otherwise, companies risk letting others make decisions that could conflict with their organization’s current capabilities.
- Communicate And Align Plan With External Stakeholders
Any effective implementation of changes must come with a strong communication plan with trading partners. It is important to assess that the plan meets the requirements of the law, and also, where consistent with the law, the requirements of trading partners. Organizations cannot just align with the biggest few trading partners, but they must also pay attention to the long tail. Some major wholesalers and national retail pharmacy chains have issued communications to their suppliers to share their compliance plans using multiple mediums such as letters, conference calls, dedicated websites, vendor services, and videos and provided channels for trading partners to provide feedback as well.
- Test Adoption Of The Solution Early On
No matter how much planning and analysis is done, an organization will never know if the solution works until it is tried and tested, which is what many in the industry are already planning to do. With testing traceability, organizations will benefit from taking a “ramp-up” approach where they plan to onboard all trading partners in phases. This will allow them to adjust to feedback in between and be able to allocate resources accordingly. Responding to the requests to start sending TI/TH/TS information in the summer months allows several months to work out the kinks before the January 2015 deadline, which should benefit both manufacturers and wholesalers.
Testing solutions will be especially important with serialization as any decision made could result in costly expenditure and long-term implementation plans. Many big companies have already launched programs to test out technologies over the last several years, and their collaboration with trading partners is crucial to their success.
In addition to pilots initiated by stakeholders, FDA is also planning to establish at least one pilot plan to evaluate the effectiveness of methods taken to meet the DSCSA requirements, and will capture the diversity of supply chain stakeholders.
In summary, while what the future holds for U.S. pharmaceutical industry stakeholders is not completely clear at this time, there is only a path forward. A national system for interoperable electronic tracing of product at the package level will become a reality in the U.S. market, though there is still a long road ahead with many open questions to be answered. Global stakeholders also must have their eye on regulations and compliance time lines that have been published or are emerging around the world, and determine how they will strike the balance of meeting regional and global requirements. Establishing and following a framework of examining the business processes and governance, technical solutions, and trading partner relationships is what will position organizations well to sustain their serialization programs and create value for themselves and the industry as a whole.