The pharmaceutical industry will be hitting a major milestone of the Drug Supply Chain Security Act (DSCSA) in less than six months in the US. The industry could also hit a major obstacle, potentially costing drug manufacturers and wholesale distributors billions of dollars.
By 27 November, the regulations of the DSCSA require wholesale distributors of pharmaceuticals to verify the pedigree of returned drugs with drug manufacturers. The aim is to ensure that counterfeit, recalled, suspect or expired medicines do not slip into the supply chain from a dispenser’s shelf or warehouse and end up being resold as effective, safe and legitimate products.
This obviously worthy goal, while simple, is far from easy to implement.
So far, members of the pharma supply chain are doing everything they can to make the new regulations work. They have adopted serialised bar codes, established GS1 standard product identification and created methods to track and trace products.
However, now that new systems have been implemented to verify that returned saleable drugs are legitimate, a serious problem is emerging – one that could disrupt drug distribution, raise costs, create shortages and significantly hurt the $11bn annual market in saleable returned pharmaceuticals.
Recent research conducted by support engineers for serialisation software services found that one-third of all new DSCSA-compliant 2D barcodes fail to scan. As bad as that sounds, it is a significant improvement on the results of a 2018 barcode study conducted by GS1 that discovered that only 6.6 percent of 2D barcodes with all four required data elements could be correctly read – meaning 93.4 percent of the verifications conducted were negative.
Still, a 33 percent failure rate with less than half a year to go before the deadline to verify saleable returns should be a major concern for everyone in the drug supply chain. Handling saleable returns is already a costly and time-consuming activity, but failed barcodes will mean that a substantial amount of returned product will need to be manually verified with manufacturers before those drugs can be resold. The potential increase in time, cost and lost saleable product represents a real threat to the industry and the success of the DSCSA.
A surge in suspect products
The DSCSA’s main requirement for verification is simple: drugs returned to a wholesale distributor or warehouse cannot be resold unless they’ve been authenticated by verifying their product IDs with the manufacturer. There are just eight possible outcomes for each product:
Verified – can be resold
Verified – additional information "recall"
Verified – additional information "suspect"
Negative – no matching GTIN SN
Negative – no matching GTIN SN LOT
Negative – no matching GTIN SN Exp
Negative – no match GTIN SN Exp LOT
Directory not found/404 error.
Although only one response allows the drug to be immediately returned to saleable inventory, the good news is that – in typical situations – about 97-98 percent of all returned drugs are eligible to be resold.
Distributors manage as many as 75,000 stock keeping units (SKUs) in their warehouses and there are an estimated 1.13 million units returned every week across the industry – or 226,000 units every day. That volume demands an automated system of verification, which is why the industry has worked so extensively with the US Food and Drug Administration (FDA) and the Healthcare Distribution Alliance (HDA) to create standard approaches. Because the FDA guidance has been vague, the HDA conducted its own research and found two acceptable technologies, finally recommending the use of verification router service (VRS) systems.
Technology rises to the challenge
In response, several leading solutions providers have jumped on developing VRS systems that can handle verification requests for both wholesale distributors...
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