Born from the urgent need to protect consumers from unsafe medications and a push from legislatures, the US Drug Supply Chain Security Act (DSCSA) is almost here, in full. The DSCSA strives to bring secure, interoperable, electronic data exchange to the pharma supply chain, providing product tracing and verification, security, licensure check and patient safety.

Yet, pharmaceutical manufacturers and distributors are becoming increasingly concerned about their ability to track medical drugs throughout the entire supply chain, from distribution to delivery.

In August 2023, the US Food and Drug Administration (FDA) introduced a compliance policy guidance, establishing a one-year stabilisation period to give the pharma supply chain more time to adhere to DSCSA requirements and implement electronic drug tracing in packaging. Violations are sanctioned until 27 November 2024, but with the deadline fast approaching, pharma companies need to ensure compliance quickly.

Addressing the illegal drug crisis

Counterfeit medications are part of an interconnected criminal enterprise, with drug diversion operations amounting to $431bn in global fraud, according to the World Health Organization (WHO). Drug counterfeiting, theft, and illegal diversion cases increased to an all-time global high of 4,405 in 2019, the Pharmaceutical Technology Institute (PSI) reported, double the number five years prior. The largest number of apprehensions occurred in North America, where authorities seized 1,750 drugs.

Pharmacies are actively preparing their teams, becoming familiar with the law, and working with their trading partners to ensure DSCSA compliance. They are also tasked with providing tracing and licensing information and learning how to manage suspect and illegitimate products.

“It is their responsibility to ensure their trading partners are ready to deliver safe, compliant products that do not pose a risk to their workflows or patients,” Valerie Bandy, Senior Director of Pharmacy Solutions at Tecsys, told Pharmaceutical Technology.

Pharma companies are seeking ways to become and remain DSCSA compliant so that the November 2024 item-level reporting deadline doesn’t result in the FDA halting and interrupting the distribution of needed medications to retailers and end users.

Track-and-trace provides the answer

The US DSCSA strives to “adhere to a global standard of tracking and tracing prescription drugs from manufacturing to distribution in the various supply chain points until they reach the end consumer”, Shyam Krishna, Vice President of Healthcare Solutions at Softeon, told Pharmaceutical Technology.

“The steps outlined in the DSCSA are designed to safeguard the US pharma supply chain by addressing the dangers posed by counterfeit, harmful, contaminated and stolen drugs,” Bandy says. The law aims to improve patient safety and supply chain efficiency by monitoring medications’ identifiers such as batch codes (or Lots), expiration dates, temperatures and storage conditions.

The pharma industry can ensure traceability via Global GS1 standards in ‘serialisation processes’, tracking every product or National Drug Code’s (NDC) Lot, serial number, and expiration date, and reporting the life cycle of the serial numbers associated with the packages throughout the lifecycle.

Traceability data attributes for each product are transmitted and reported as electronic messages to entities in the supply chains. These messages, called Electronic Product Code and Information Services (EPCIS), are associated with the appropriate Global Location Numbers (GLN), Global Company Prefixes (GCP) and other unique attributes.

Software vendors must conform to processing and handling these messages universally as they are routed nationally or globally. The DSCSA also ensures licence verification regimes at the federal and state levels for receiving, storing and distributing drugs.

Compliance-led technology approaches

The FDA mandates the implementation of a fully interoperable, enhanced electronic unit-level drug traceability system, including a serialised identifier and verification of saleable returns for manufacturers and trading partners.

Pharma companies are working to adopt an integrated technological approach to ensure a seamless switch to the new regulation. “Companies should establish systems to respond to verification requests, conduct investigations, and notify the FDA when a suspect product is identified through any avenue,” Bandy shares.

Technological adaptations can help avoid supply chain disruptions, which can lower a pharma business’s earnings before interest, taxes, and amortization (EBITA) by 25%,  McKinsey & Company estimates.

Collaborative robots, or ‘cobots’, can ease the transition from pre-DSCSA to the bolstered tracking era. Cobots can assist with research and development (R&D) and quality control during production. They can connect with end-to-end traceability and upstream serialisation software to track and trace drugs.

Labeling software and modern inventory management systems can identify and trace drugs. Shared record databases and integrating blockchain technology can support secure drug processing. Integrating data analytics and visualisation solutions can help companies improve their data-sharing capabilities.

As patient safety is the ultimate goal of the DSCSA and all medication management within the industry, Bandy says, “The future of pharmacy logistics should consider centralisation, modernisation, strategic use of technology, supply chain innovation, and adopting a patient-first approach”.

Beyond implementation

Current challenges revolve around medication management, drug shortages, and global supply chain disruptions. “The DSCSA will allow for better control over what enters the pharma supply chain and enforce strict guidelines on managing suspicious or illegitimate items,” says Bandy.

However, all stakeholders must be fully educated and prepared with a compliance plan. “Partners not in compliance will struggle to remain in the market as dispensers or trading partners as their trust and capabilities erode,” Bandy adds.

Stakeholders need to become authorised trading partners, report annual licensure, maintain transaction information, and add the required traceable and trackable information to their packaging. Ultimately, the measures “help mitigate risks, prevent financial damages, and build reputable trust relationships”, Bandy continues.

However, the DSCSA requirements exclude numerous medicines, including non-prescription or over-the-counter (OTC) drugs, animal drugs, blood or blood components intended for transfusion, radioactive drugs or biologic products, imaging drugs, certain IV products, medical gases, certain homoeopathic drugs, and lawfully compounded drugs—raising questions over whether the DSCSA can manage their counterfeit risk and subsequently, the global illegal drug crisis, fully.