DSCSA: What Phase II Implementation Means For You

Since the Drug Supply Chain Security Act (DSCSA) came into force there has been no shortage of teething problems and the stakeholders have learned a number of lessons about working together to develop systems and processes that are both effective and acceptable to all.

It’s worth remembering that the Drug Supply Chain Security Act (DSCSA) was not passed into law simply because Barack Obama has a liking for carefully mapped processes. The Act exists to ensure the safety and genuineness of all prescription drugs supplied to American consumers in America. That is the background against which the next big DSCSA milestone is coming.

Anyone who does not understand the challenges facing the pharmaceutical industry might have felt when the act was passed that 2017 was a long way in the future and that waiting till then was generous towards drugmakers. It wasn’t, and it isn’t. Even when the target date was set, 2017 did not allow more time than was needed; and now 2017 is almost here. Anyone in the drug supply chain, but especially any manufacturer, who has not made solid progress in the introduction of full drug serialization had better give it their complete attention RIGHT NOW.

By the end of last year, four targets had to be met:

  • All supply chain participants must work only with registered or licensed trading partners
  • Companies must pass, capture and maintain information about each product transaction
  • Companies must have in place processes and procedures that will allow them to respond promptly when asked for information by federal and/or state officials
  • Companies must have in place systems and processes allowing them to investigate, verify and respond promptly to suspect and illegitimate products as defined by FDA.

All of that has been done. So far so good; Phase 1 can now be said to be fully implemented and working satisfactorily.

Lot-level traceability deadline is passed. That caused difficulty in some quarters, but it’s done and it’s now possible to trace each batch of drugs from manufacture to final destinations. What is tracked is now to be broken down further, from batch or lot level to individual package. Lest there be any doubt about what that means, let us make it clear: there may be a hundred thousand individual saleable items in a batch, but every one of those individual saleable items needs its own serial number and its own traceability.

And now we turn to Phase II.

Every single saleable item to be marked with a product identifier, a serial number, a lot number and the expiration date. It is not a simple requirement. Packaging has to change. Documentation has to change – and that means that IT systems have to change.

At present, products must be traceable at the lot level. In other words, each lot must have its own unique serial number and it must be possible to follow that lot all the way to the end of the process (the point at which it is split up) and all the way back to the manufacturer, should that prove necessary. But a lot is a batch; it may include a large number of individual product packages and those will be split – sometimes by the dispenser but sometimes as far back in the chain as the wholesaler.

Not all of the responsibility lies with the manufacturer. Wholesale distributors and third-party logistics companies (3PLs) will have to work closely with the manufacturers to make sure that whatever process is introduced actually works. Since a good general rule is that no new process actually works properly until it’s been tweaked a few times, the testing and feedback should have started by now. If it hasn’t, there’s no time to waste.

Pharmacists, too, (and we include in that term dispensers in any guise) must look at their T3 Transaction History processing and archival systems. Right now, they can expect at any time to be called on to produce the documentation that shows exactly what happened to every batch of pharmaceuticals with which they have been involved at every stage from manufacture until it reached them. From next year, they have to go deeper than that and produce the documentation for a single item, even though the batch or lot may have consisted of thousands of items. It would be too easy to simply assume that everything will work as it should. That will only happen if the systems in place are robust enough and go to a sufficient level of detail, and if document storage is adequate.

Changes like those that have already been carried out under DSCSA and those that remain to be completed would be difficult enough if they concerned only one company, but that is not the case; perhaps the greatest challenge has been the need for all companies in the chain to communicate with each other and to arrive at a system acceptable to all. The FDA could have helped by setting out in law the format in which data should be recorded and passed on, but it did not do that. The result is that different companies have developed different ways of recording what needs to be recorded and a single 3PL, wholesale distributor or pharmacist may receive documentation in a variety of different formats. They all have to be understood, they all have to be processed, they all have to be stored and they all have to be capable of production on request.

It’s only when the numbers involved are considered that the full scale of the challenge faced by everyone in the supply chain becomes clear. Establishing clear and foolproof processing systems between two parties is a challenge in itself, but it doesn’t stop there. For even a small dispenser, there may be millions of transactions with hundreds of partners, and the dispenser may be given only 48 hours (everyone else in the chain has only half of that) to produce the comprehensive documentation relating to a single one of those transactions. It can never be simple but with good systems in place it can be done. Without good systems, it would be a nightmare – and failure can mean the end of the business.

Phase 2 involves carrying that serialization down to package level so that the traceability at present extended to individual batches will by that date extend all the way down to each individual package in the batch. For manufacturers, full serialization has to be in place by November 2017. It’s 19 months away and getting closer every day. After that, the requirement is extended annually: by November 2018, repackagers must comply; by November 2019 wholesale distributors must be meeting the requirements and by November 2020 dispensers will be covered.

So part of Phase II is converting from lot-level serialization to batch-level serialization. There is another significant change, though, which is in transaction reporting. At the moment, whenever a product moves, its transaction history must move with it. What we have is a T3 Transaction History that lists every step in the journey a lot makes from the moment it leaves the manufacturer. Each time it moves on, it takes with it an updated T3.

In Phase II, that changes. The model that comes into effect in Phase II is described as “one up, one back” which means that every entity in the supply chain captures the transaction information for its own receipt of the product and its own subsequent distribution. Instead of there being a single T3 Transaction History that travels everywhere with the product and says everything that has happened and names everyone involved, it will now be possible to put together the equivalent of that history by aggregating each piece of transaction information along the way. Since by that time everything must be electronic and electronically transferable, that aggregation will be – or should be – simple. It’s important to note that information passed on must facilitate saleable returns in a way that’s easy to understand and easy to implement.

Running alongside this is the establishment of uniform standards for licensing wholesale distributors and third-party logistics providers. At present, licensing is a state matter; the Act transfers the responsibility to federal agencies but leaves FDA to specify exactly what those standards should be. It will still be open to individual states to license distributors and logistics providers but they will have to use the federal standards. The Act created seven categories of licensing standards and required that these be in place by 27th November 2015.

In 2017, FDA must begin an assessment of the feasibility of small dispensers being able to conduct drug tracing at the package level. This assessment is to include the availability and practicality of software available to small dispensers. The assessment must be completed by 2020.

Before the end of 2022, FDA must release final guidance on standards for interoperable data exchange and by the end of 2023, the agency is required to have developed a complete package of regulations covering all aspects of drug security and traceability.

At that point, the process begun with the passage of the Act will finally be complete.

Free DSCSA Evaluation

Contact TrackTraceRx today to receive a free evaluation of your DSCSA current policy and procedures. This free consultation will allow you to have a piece of mind that you are following the correct procedures in order to meet ALL DSCSA requirements. TrackTraceRx will also provide you with a FREE Standard Operating Procedure (SOP) template which is required by the DSCSA during a FDA inspection.

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