Big Three Wholesalers Outline Their Requirements on DSCSA Compliance to Manufacturers

In the 80s Metallica, Anthrax, Slayer and Megadeth were referred to as the “The Big 4” and “The Four Horsemen”. In the Internet world today, Facebook, Google, Apple and Amazon dominate the Internet and are also crowned “The Four Horsemen”. I’m sure in every industry you can certainly pick four big companies that monopolizes and you can easily token them as the “The Four Horsemen”. In the pharmaceutical world though, it’s the “Three Horsemen” or as they are famously coined “The Big Three”…Amerisource Bergen, Cardinal and McKesson.

But here is the problem – decades of acquisitions and mergers have shaped the patchwork quilt of an industry that is highly fragmented. The Big Three actors – McKesson, AmerisourceBergen and Cardinal Health – account for up to 85-90% of total sales for many U.S. drug manufacturers. The rest are smaller distributors that mostly follow suit, so when we talk about a unified, more streamlined approach we want to know where the Big Three stand on serialization and aggregation requirements. What they decide, is that we will follow. Like the the 80s rock bands that rocked the nation, and how Facebook, Google, Apple and Amazon command the Internet.

As the Drug Supply Chain Security Act deadlines approach, serialization and aggregation coordination efforts come to the fore. Manufacturers need to know if they will be required to develop different processes to meet unique wholesaler DSCSA compliance guidelines, or if there is a path towards a more streamlined and unified approach. The one that will let manufacturers develop once and then scale out. Again they turn to the Big 3 for guidance.

Further fragmentation is ensured by the fact that each wholesale distributor dictates its own requirements for the manufacturers to follow so that the wholesaler can comply with their DSCSA requirements.

There is hope…

Earlier this year, all three major drug wholesalers communicated their serialization and aggregation guidelines to manufacturers.


McKesson sent a letter to its suppliers, outlining its requirements for drug manufacturers. Here are its highlights:

GS1 EPCIS format is to be used for the serialized DSCSA information exchange.
Aggregating product from item to pack/bundle level, when applicable.
Pack/bundle level to case level, case to pallet/container level utilizing the GTIN and SSCC labeling formats.
HDMA Advance Ship Notice (ASN 865) is to be used unchanged until the Lot Level Traceability is due in 2023.

McKesson makes it clear it’s time to plan for and implement aggregation. While some manufacturers are already working on serialization, aggregation could be a more difficult task. Unlike serialization that has been a buzzing word for quite some time now, aggregation has been an unexplored territory. Based on serial number packaging hierarchy, aggregation might already be partially in place with some manufacturers, though. If your company has serial numbers on some package levels or shipping containers, you have aggregation data, at least partially.


Cardinal Health published its Technical Requirements for Serialization (requirements for barcodes, EPCIS serialized data exchange and master data), Upcoming Drug Supply Chain Security Act manufacturer requirements, and sent two communications earlier this year. Here are some key highlights from Cardinal serialization requirements:

Manufacturers must meet the serialization deadline in 2017, re-packagers in 2018, as wholesalers must meet the deadline in 2019 for verification of re-saleable products.
Serialized data exchange might be required by Cardinal as early as January 2019, as the company is waiting for the results of the HDA 2019 Saleable Returns Verification pilot.
Manufacturers must aggregate data from individual units to case level.
Manufacturers must use GS1 standards for product identifiers and adhere to HDMA guidelines. Manufacturers must use GTINs and GLNs in GS1 standard.

Cardinal 3PL clients will start testing serialized data exchange in June 2016.
Those Cardinal 3PL clients that seek a solution for data verification/retention requirements will be able to receive data reporting service starting September 2016.

The Technical Guide offers information for the companies interested in participating in pilot, and stresses one important detail – “Cardinal Health will not incorporate automated SGTIN validation as part of our Receiving process at this time <…> for piloting purposes our EPCIS system will be decoupled from our production receiving processes, and we will conduct pilots using our EPCIS repository in a manual and highly controlled fashion, providing feedback on labeling, aggregation quality and DSCSA content (if applicable) for each Manufacturer who participates.”

We can assume this means that during the testing Cardinal will accept your shipment even if your serialization information is not 100% accurate.


AmerisourceBergen (ABC) published its Serialization Labeling Guidelines and Requirements, backed by a supplier letter:

Manufacturers must follow GS1 standards and HDA guidelines for labeling on case and unit level products.
Should there be any labeling issues, ABC will provide assistance on correcting them until November 2017.
ABC will receive lot-level data via electronic ASN or via GS1 EPCIS format.
Starting early 2018, manufacturers must provide “EPCIS electronic serialized transactions and a list of standardized product identifiers for the cases & units” to ensure returns verification database accuracy.
Manufacturers must aggregate “units to homogenous cases, units to non-homogenous cases, & cases to pallets” to “meet the 2019 saleable returns obligation.”
Manufacturers must convert the NDC (National Drug Code) number to GTIN (Global Trade Item Number).


The good news is the Big Three do have a few things in common in their serialization guidelines for manufacturers:

Use of ASN format for sending lot-level DSCSA information.
Serialization of units and cases.
Use of GS1 standards for product identifiers.
Use of GS1 standards to serialize prescription drug products before November 2017.
Cardinal requires manufacturers to aggregate units- to case-level while McKesson and AmerisourceBergen require all levels of aggregation.

McKesson did not provide a set date for serialized data exchange while AmerisourceBergen set a time frame at early-2018, and Cardinal at early-2019.

Aggregation and serialization are mandated by the DSCSA with the due date in 2023, but the Big Three deadlines are set earlier. Why? The 2019 saleable returns verification deadline must be the reason. Without aggregation and serialization from manufacturers, it is logistically über-challenging to verify saleable returns. Without aggregation and serialization, verifying saleable returns would require for the wholesalers to manually open all the returns and verify each serial number with the manufacturer via phone.

HDA Pilot Study for Saleable Returns and Manufacturer Serialization Readiness Survey

(TrackTraceRx was one of the sponsors at the HDA Traceability Education Seminar in November. If you get a chance, please read our recap of the Seminar Here.)

All three stress the importance of the HDA pilot (formerly HDMA), as they expect its final report to fine-tune their aggregation requirements and enable the verification of the serialized saleable returns by November 2019.

In early-November, 2016, HDA published the results of the Pilot Study for Saleable Returns and recommended two “cost-effective and viable” scenarios to help manufacturers and wholesalers comply with the DSCSA requirements.

The first scenario suggests “a manufacturer sends aggregated product identifier only for the products purchased to each individual distributor.” When the wholesaler needs to process a saleable return, it references an internal database to verify the product identifier information from the manufacturer.

The second scenario implies there is a third-party verification router service. The manufacturer, in this case, stores all its product identifier information locally, with the database synchronized with a third-party routing service. When a wholesaler receives a saleable return, it captures the product data, sends it to the third-party router service, which, in its turn, routes the query to the manufacturer’s database.

“There is no ‘one-size-fits-all-situation’ to meeting this compliance deadline. Each company is different and will need to determine, based on their needs, which scenario or combination of scenarios work best for their company,” said Perry Fri, Executive VP of Industry Relations, Membership and Education, HDA; and COO of the HDA Research Foundation.

HDA also announced the results of its Manufacturer Serialization Readiness Survey, which surveyed 73 manufacturers that account for 71% of drugs produced in the U.S. The survey found that 89% of manufacturers were ready to ship serialized products before the DSCSA-set deadline in November 2017. 67.1% expressed commitment to aggregate, and 27.4% are waiting for the FDA guidance to decide whether to aggregate. The next big event is for the FDA to publish its DSCSA aggregation guidance.

I know this is a lot to take in. For any further questions, please feel free to contact one of our DSCSA experts for a free evaluation of your process and procedures. To Book a free evaluation visit the TrackTraceRx web site.


About TrackTraceRx Suite

Other solutions on the market today are totally fragmented by only providing one piece of the puzzle. Pharmaceutical companies today are stuck subscribing to multiple services, accessing different companies for support and paying thousands of dollars to integrate different systems. The TrackTraceRx Suite is a game changer by combining the TrackTraceRx Traceability Solution, a ERP, and a Commerce Platform completely integrated out of the box. This eliminates having to deal with multiple support, feature services and integration costs.


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