November 10, 2016
ARLINGTON, Va. — The Healthcare Distribution Alliance (HDA, formerly HDMA) today presented the results of its Pilot Study for Saleable Returns, which recommended two scenarios that would help pharmaceutical manufacturers and distributors comply with requirements set forth by the Drug Supply Chain Security Act (DSCSA). The recommendations were presented this morning at HDA’s Traceability Seminar in Washington, D.C.
Beginning in 2019, the DSCSA will significantly alter how distributors must process serialized saleable pharmaceutical returns from customers. According to an HDA member survey, saleable pharmaceutical returns comprise 2 to 3 percent — or nearly 59 million units — of total sales annually. Given the volume that distributors must process, HDA, working with Ernst & Young LLP (EY), conducted the pilot study with representatives from seven pharmaceutical manufacturers and six pharmaceutical distributors to review nine real-life scenarios that would allow stakeholders to achieve consensus on which solution would best work to comply with the 2019 requirements. Four of these scenarios were conducted as live pilots, two were completed as desktop pilots in working group sessions and three were analyzed through white papers.
Two of the live pilot scenarios were determined to be the most cost-effective and viable approaches to achieving compliance. In the first recommended option, a manufacturer sends aggregated product identifier information only for the products purchased to each individual distributor; when the distributor processes a saleable return, the distributor references an internal database to verify the product identifier information from the manufacturer.
The second option employs a verification router service. In this scenario, 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.
“One important lesson learned through the pilot is that manufacturers and distributors must work together, collaboratively, to cross the finish line for this DSCSA milestone,” said Perry Fri, Executive Vice President of Industry Relations, Membership and Education, HDA; and COO of the HDA Research Foundation, “This process has revealed the challenges and opportunities that the implementation process holds. We look forward to sharing our results and will continue to work with supply chain stakeholders and regulators to implement our findings.
Following the seminar, HDA will facilitate a work group to develop technology requirements for the verification router service outlined in the second recommended scenario, and make appropriate recommendations to regulators. The work group is open to manufacturers, distributors, dispensers, solution providers (both members and non-members of the organization). Those interested in participating may contact Justine Freisleben, Senior Director, Industry Relations, HDA, at email@example.com. Additionally, a full report on the pilots will be published by HDA and EY in December.
Summing up the pilot project, Fri noted, “While these are the two scenarios that the pilot group determined to be the best, it is important to remember that 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.”
DSCSA Readiness Survey Results: Majority of Manufacturers Ready to Send Serialized Products in 2017
In addition to presenting the pilot results, HDA announced the results of a “Manufacturer Serialization Readiness Survey,” which was conducted this summer by the HDA Research Foundation. A total of 73 pharmaceutical manufacturer companies were surveyed. The respondent companies yield 71 percent of the volume of medicine produced in the U.S. pharmaceutical industry.
Results show that a majority of manufacturers, 89 percent, indicated that distributors will start to receive serialized products before the DSCSA-mandated deadline of November 27, 2017. Additionally, two-thirds (67.1 percent) of surveyed manufacturers indicated that they will aggregate their products, with 27.4 percent noting that they are waiting for FDA guidance before they determine whether or not they will aggregate their products.
“We are pleased to report that overall, manufacturers are working diligently toward this major DSCSA milestone,” said Fri. “An important next step is for FDA to publish industry guidance that recognizes and recommends business practices, such as inference and aggregation; establishes state licensure requirements; and takes other measures to promote an efficient and secure supply chain as the industry continues to work toward full unit-level serialization in 2023.”
To view the full results of the manufacturers’ readiness survey, visit the HDA website.
The Healthcare Distribution Alliance (HDA) represents primary pharmaceutical distributors — the vital link between the nation’s pharmaceutical manufacturers and pharmacies, hospitals, long-term care facilities, clinics and others nationwide. Since 1876, HDA has helped members navigate regulations and innovations to get the right medicines to the right patients at the right time, safely and efficiently. The HDA Research Foundation, HDA’s nonprofit charitable foundation, serves the healthcare industry by providing research and education focused on priority healthcare supply chain issues.