Will you Be Ready for the November 2019 Deadline?
The purpose of the Drug Supply Chain Security Act (DSCSA) is to ensure the safety of drug products as they pass through the supply chain and end up in the hands of consumers. But there are so many provisions to the act that people in the pharmaceutical industry sometimes have a hard time figuring out how to handle certain situations.
For example, one of the biggest challenges for pharmaceutical distributors is the process involved in handling saleable drug product returns.
The issue is that distributors must properly process returned drug products before they can sell them again.
This is especially important for public safety because pharmacists and drug manufacturers have no way of knowing what happened to a drug product while it was out of their possession.
Let’s see what the DSCSA rules say about saleable returns, and also take a look at several pilot programs that may help distributors understand exactly how to handle these returns in compliance with the new regulations.
What Are Saleable Returns and Non-saleable Returns?
Before diving into the law, it’s important to first explain the definition of a saleable return and a non-saleable return.
Saleable returns are defined as drug products that are returned to the original supplier. In many cases, pharmacies and other drug dispensers return these products because they are over-stocked and want to get a refund.
Non-saleable returns are defined as drug products that are damaged, or drug products that have expired, or that are going to expire before they are sold.
Dispensers have three choices when it comes to handling non-saleable drug products:
- Return them to the original supplier
- Return them to the manufacturer
- Return them to a returns processor that disposes of non-saleable drug products
Any of these three options will provide dispensers with some type of refund, though it won’t be comparable to what they could get for saleable returns.
“ the DSCSA requires organizations that process saleable returns to identify returned products with the T3 transaction information and transaction statement, and verify serial number, lot number and expiration date.”
Starting in November 2019, the DSCSA requires organizations that process saleable returns to identify returned products with the T3 transaction information and transaction statement, and verify serial number, lot number and expiration date.
How a Major Pilot Study for Saleable Returns Can Help
Recently, the Healthcare Distribution Alliance (HDA) published the results of a pilot study for saleable returns with two proposals to help pharmaceutical manufacturers and distributors.
The first proposal is to have manufacturers send drug product identifier information to each distributor for only the products they purchased. After the distributor handles a saleable return, it would access a database to verify product identifier information listed by the manufacturer.
The second proposal is to use a verification router system, in which manufacturers store all product identifier information in a local database that is linked to a third-party routing service.
When a distributor handles a saleable return, it sends product data to the third-party routing service, which delivers the information to the database of the appropriate manufacturer.
Both options require manufacturers and distributors to work together to ensure that they overcome the challenges of saleable returns.
What Are Some Best Practices for Handling Saleable Returns Prior to 2019?
Although the DSCSA only requires T3 documentation when a saleable product is not returned to the original supplier, there are still some best practices to follow when handling this situation, including:
- Notate every saleable return in all compliance documentation, including which supplier or wholesaler received the product.
- Reconcile all overages as either saleable returns or voidances. This means that dispensers that receive an excess shipment of a product must decide whether they will categorize the overstock as a saleable return or categorize it as a voided transaction, which would require T3 documentation. If that decision isn’t made, the dispenser’s T3 records will not match their physical inventory.
A Work in Progress
For dispensers, distributors, manufacturers, and wholesalers, processing saleable returns has one purpose: to ensure that drug products are safe for the end buyer.
Methods such as maintaining a central repository that aggregates all relevant data, providing each manufacturer with their own verification database, and having distributors scan outbound products have all been suggested. Not all suggested verification systems suggested are created equal though, and one system stands out as being more workable than the others.
At the end of last year, the Healthcare Distribution Alliance (HDA) completed an analysis of nine potential ways to ensure drug companies meet verification requirements. The HDA then held a workshop where they presented pilot versions of two of the most promising verification systems.
One approach was to have manufacturers aggregate product identifying information and send it to individual distributors, when the distributor needs to process a saleable return they simply reference an internal database to verify the identifier information. The other tactic discussed for was the use of a verification router service (VRS), where a third-party routing service stores all product identifier data locally.
VRS has the potential to make meeting verification requirements easy and convenient, regardless of how many companies it has to serve.
Verification router service systems are a major component of this next milestone for the DSCSA. According to the Drug Supply Chain Security Act, after the November 2019 deadline, no product may be resold until the wholesale distributor is able to accurately verify each products identifiers.
Sounds simple enough, until you take into consideration that pharmaceutical wholesalers receive 60 million or more returned packages each year. This represents a tremendous amount of data that must be verified and managed by trading partners. Verification router service (VRS) systems present an interoperable solution that accommodates the verification requirements of the DSCSA.
Without an interoperable solution in place, wholesalers run the risk of suffering maximized negative effects of saleable returns – a cost that is sure to be passed on to the rest of the industry. Therefore, while the next phase of the DSCSA pertains primarily to wholesalers, all members of the drug supply chain have a vested interest in the industries ability to develop an effective, interoperable system. Think of the potential financial impact if those 60 million plus returns had to be disposed of rather than put back into the drug supply chain. The cost to the industry would be more than significant.
About Verification Router Services
In order to minimize the potential financial impact of saleable returns, a verification router service takes requests and processes the information in real time, or as close as possible to it. A verification router service is an interoperable model that is capable of automating response to wholesaler verification requests. In a perfect world, this makes the verification of saleable returns basically a non-issue.
If a wholesaler stumbles into an obstacle with saleable returns, such as a manufacturer failing to provide crucial data, a VRS would eliminate any delay in processing. Likewise, a VRS would help the wholesaler identify whether the shipment was the target of any suspect investigation.
The VRS model has three main components – the source of the request, the router where the request is processed and connected to the appropriate source, and finally the responder where the request is received, typically by a manufacture, and then responded to. Considering that wholesaler and manufactures maybe using different solutions, the interoperability of the VRS is crucial to its effectiveness.
VRS Solutions on the Horizon
In October of last year, the FDA released a draft guidance titled “Verification Systems under the Drug Supply Chain Security Act for Certain Prescription Drugs” that outlines the entire scope of verification requirements for wholesalers according to the DSCSA which will go into effect in November of this year.
According to the draft guidance, wholesalers, along with manufacturers and repackagers, are required to have a system in place that allows them to thoroughly process any saleable returns that will reenter the drug supply chain for distribution. Data of salable returns to be verified include the product identifier and standardized numerical identifiers on sealed homogenous cases. Until these data points can be verified, a product should be handled as suspect and not redistributed.
In response to the impending 2019 deadline for wholesalers. We are starting to see an emergence of VRS solutions making their way to the surface. At this point in the game, VRS is still a major buzzword and point of focus. VRS -focused companies such as TrackTraceRx, collaborated with the HDA and its pilot to develop a network based VRS. The highlight of this VRS network is to allow network compatibility for every level 4 serialization solution, making it accessible to all drug supply chain trading partners regardless of their internal serialization solutions.
The VRS solution will allow pharmaceutical supply chain members to easily meet any and all requirements under law with peak efficiency. The solution is proposed to streamline the processes involved in regulation requirements and allow customers to spend less time and resources on product tracking.
Looking Ahead to Wholesaler Requirements in November 2019
Once the November deadline hits, the goal is to have all wholesalers capable of scanning all saleable returns and sending a verification request to the VRS network, which in turn would use a master data set to route the inquiry and produce a near real time response. If the product identifier is found and verified, then redistribution can proceed. If not, the VRS signals that a red flag has just been raised on this product and that a quarantine and investigation are in order.
One challenge the industry is looking at is not just that there are VRS systems that can be put in place, but also that they’re completely interoperable and that they can handle the tens of millions of saleable returns that wholesalers must verify and process in any given year. Current solutions look promising, but we have yet to see what actual large-scale implementation will look like.
What Is Verification Router Service?
As defined by the HDA, verification router service refers to using a third-party routing system to send product information back and forth between distributors and manufacturers.
“The manufacturer stores all of its product identifier information locally, which is connected to a third-party routing service. Upon receiving a saleable return, the distributor captures the product data and sends the data to this third-party router service, which then routes the query to the appropriate manufacturer’s database,” reads the HDA communication.
How Is Verification Router Service Structured?
HDA’s workshop on VRS did not specify a structure the VRS system would have, but it did provide an example of how a VRS system might operate.
The pilot example shared by the HDA consisted of five different steps, and was anchored by a GTIN-to-IP address table. A manufacturer would have to share their EPCIS repository IP address, as well as their GTINs (Global Trade Item Number), in order for the pilot VRS to function.
HDA’s proposed 5-step process is as follows:
- Step 1. A wholesale distributor receives a saleable return. They then scan the DSCSA product identifier on either the whole case or the first unit, and acquire the serial number and GTIN for the product.
- Step 2. The wholesale distributor sends both the serial number and the GTIN to the VRS. The VRS will then utilize the GTIN to look up the manufacturer’s EPCIS IP address.
- Step 3. The VRS sends the serial number and GTIN over to the EPCIS for the purposes of verification.
- Step 4. The manufacturer’s system responds to the request with the corresponding serial number and GTIN, or with the current status of the units in question.
- Step 5. The VRS system sends the relevant information to the wholesale distributor who needs it for saleable returns purposes.
This is only one possible way that a VRS system could function. In a webinar from TrackTraceRx, an alternative user interface managing VRS was proposed, which would see the VRS just providing a wholesale distributor with a easy to use interface which would let them directly communicate with a manufacturer. A first for the industry.
This is a less complex method of communication, rather than having the VRS itself communicate with the manufacturer’s using backend requests with no user interfaces.
Fewer backend requests involved in the communication process means better performance, management, security, and reporting. If the direct backend curtain method were to be used, it is likely that both wholesale distributors and manufacturers would need to be suffering by being blind in its VRS communications.
What Are the Challenges of Verification Router Service?
At the HDA workshop three major challenges were identified that must be overcome by a router service.
The first issue is that collaborating and communicating on a task is difficult in an environment that has many different organizations. There are logistical problems that inevitably arise when dealing with large amounts of people, and beyond that different companies in the supply chain will want to have their own frameworks in place that benefit them, meaning negotiation between companies might prove difficult.
The second challenge is that any issues with downtime, outages, or system connectivity issues must be dealt with in a timely and efficient manner. Any delays in the processing of one packet of information will have ripple effects and become amplified due to how interconnected the VRS system is. If a distributor cannot get information from a manufacturer in a timely manner, those who need the information from the distributor will also be inconvenienced.
There are also a variety of problems surrounding the proper scanning, encoding, and formatting of products and product information. It could be difficult to sync scanning equipment with VRS because of the inherent differences in the two forms of technology. A universal format for VRS related product information must also be established.
The pilot program was able to handle a verification request from a distributor to manufacturer in 0.7 seconds. It performed at sub-second speed, meaning that the program is probably able to handle requests in real world operating conditions, despite the fact that in 2019, operators will be required to scan a 2D matrix code before sending their verification request to a router service. This would further complicate the process, and if response times became longer than a second, the return transaction might cut off altogether.
The HDA decision to endorse verification router service as a possible solution to meeting verification requirements has implications for the entire industry. If VRS is successfully implemented, the transfer of verification data between wholesale distributors and manufacturers should be relatively painless and easy. For this to happen though, every company in the supply chain will have to collaborate in the creation of VRS.
Many different companies will be looking at the technology over the coming months and attempting to create their own VRS frameworks.
While settling on a specific framework could prove challenging, at least at the moment, despite all the complexities, VRS seems to present itself as a viable way to meet verification requirements.
Free VRS Evaluation
With the deadline fast approaching, contact TrackTraceRx today to receive a free evaluation of your VRS strategy to comply with the DSCSA Saleable Returns. 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.