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Supply chain shortages have led to frustration at the pharmacy counter for many this year. With critical cancer drug shortages in May and ADHD medication shortages continuing even into Fall 2023, it has been difficult for many to get the pharmaceuticals they need. Now, a new threat may throw a wrench in the already precarious pharma supply chain.
By November 27, 2023, pharmaceutical supply chains must comply with the Drug Supply Chain Security Act (DSCSA) by providing increased supply chain visibility at the item level. If they don’t—it may mean more shortages and more patients without their prescriptions. In this blog, we’ll look at the biggest challenges companies face, the consequences of non-compliance on the industry, and potential next steps for pharmaceutical supply chains.
What is the Drug Supply Chain Security Act (DSCSA)?
In 2013, The Drug Quality and Security Act (DQSA) was enacted to give the FDA more power to regulate the manufacturing of pharmaceuticals. The Drug Supply Chain Security Act (DSCSA) is part of this act. It outlines steps to enhance the security and traceability of pharmaceutical products within the United States supply chain, from the point of production to distribution to health systems and beyond.
The DSCSA aims to help protect patient safety and improve traceability by removing exposure to counterfeit, stolen, contaminated, or otherwise harmful drugs. Illegitimate drugs can enter the pharmaceutical supply chain anytime, making them hard to track down. However, counterfeit drugs often do not provide a realistic flow of information about the original source. That’s where the DSCSA comes in. By requiring data and more in-depth tracking, finding touchpoints where bad actors enter the supply chain becomes easier.
How can pharmaceutical companies comply with the DSCSA?
Since the act was passed in 2013, companies have had ten years to ensure compliance with the DSCSA come the November 27, 2023, deadline. To comply, companies must provide unit-level serialized products to distributors in an electronic, interoperable, and secure manner. Paper-based tracking will no longer be allowed.
This means connecting trading partners via GS1 Electronic Product Code Information Services (EPCIS), a global standard of sharing supply chain information about the movement and status of goods. EPCIS allows supply chain managers to share information about the flow of any product—from production to sale. It provides the “what, when, where, why, and how” of products and other assets and is increasingly used in the food and healthcare industries.
It’s not just pharmacies who need to comply, either. The pharmaceutical supply chain relies on many steps along the way: manufacturing, repackaging, wholesale distributors, logistics providers, and hospitals—all must comply with the DSCSA.
What will happen if companies cannot comply?
After the deadline, all drugs not tracked electronically on the unit level cannot be distributed or dispensed to patients legally. Many companies and stakeholders are worried they will not be ready for the November deadline. In August, a bipartisan group of 28 members of Congress sent a letter expressing drugmakers’ concerns about compliance.
Major US supply chain and pharmacy associations endorsed this letter, including the Healthcare Distribution Alliance, American Pharmacists Association, National Association of Boards of Pharmacy, National Community Pharmacists Association, and National Association of Chain Drug Stores.
Members worry that if the law is strictly enforced (without any changes), it will lead to further drug shortages. There are also concerns about small businesses not having the tools necessary to comply.
Potential Grace Period and Exemptions
Setting up EPCIS with trade partners can be an intricate, challenging process for manufacturers and distributors. Other problems, such as labeling issues and gaps in FDA guidance, could also hinder the implementation of these new processes. According to a Healthcare Distribution Alliance (HAD) study, companies surveyed cited “collaborating with trade partners” as the top obstacle to compliance.
As a solution, members suggest a grace period for implementing the law to minimize supply chain disruptions and avoid shortages. This approach aligns with the Healthcare Distribution Alliance’s (HAD) request for a two-year enforcement delay of the DSCSA tracking.
Currently, there is also a process for stakeholders to request an exemption from the act’s requirements. As of May 11, this exemption has been offered for some COVID-19 products.
Pharmaceutical Companies Must Map Supply Chains
The goals of the DSCSA could have an incredible, positive impact on the pharmaceutical supply chain as it moves into a new era of data management. However, given the current challenges for companies, supply chain disruptions and shortages could likely occur after the November deadline.
On top of this looming deadline, pharmaceutical supply chains are already under enormous pressure to improve agility and responsiveness, provide visibility, increase consumer confidence, and reduce the costs of integrating with trade partners. As we wait to see whether the FDA will grant a grace period, there are steps pharmaceutical companies can take now to comply with the Drug Supply Chain Security Act.
Drugmakers must start by mapping their supply chains beyond the first tier to gain crucial visibility. Resilinc’s Multi-Tier Mapping solution allows pharmaceutical companies to see suppliers in the indirect tiers of their supply chain—were 85% of supply chain disruptions originate.
To learn more about how Resilinc helps pharmaceutical companies deal with complex products and unknown local suppliers—all while patient health and wellness are at stake, check out Resilinc’s supply chain solutions for the pharmaceutical industry.
