One in ten medicines worldwide are counterfeit, according to the Pharmaceutical Research and Manufacturer’s Association.1 Routine testing of drugs purchased online by the U.S. FDA has revealed that more than 50% are fake.2 In 2015 alone, FDA and Interpol seized illegal medicines and medical devices from more than 1,050 websites.1 Meanwhile, the World Health Organization estimates that 10% of drugs in the global marketplace are counterfeit, with much higher levels (30%-40%) in developing countries and approximately 1% in developed nations.2 Counterfeiting of medicines is clearly big business — $200 billion annually, according to the World Customs Organization.2
The objectives of the DSCSA are to enable tracking of drug product down to the individual unit of sale, improve detection and removal of counterfeit products in the drug supply chain, and facilitate more efficient drug recalls.
Verification requirements start in 2017 for manufacturers, 2018 for repackagers, 2019 for wholesale distributors and 2020 for dispensers. Following these dates, products can only be transferred between authorized trade partners. It is essential that all participants in the pharmaceutical drug supply chain become familiar with the law and its implementation over the next six years, and work with partners that understand and comply with the regulation.
The next deadline of November 27, 2017, applies to manufacturers, which are defined as application holders. There are several requirements that manufacturers must meet, including:
It is important to note that while the DSCSA does not explicitly require aggregation (tracking of parent/child relationships from unit level to case, and case to pallet), statements such as “…enable secure tracing of product at the package level, including allowing for the use of verification, inferences, and aggregation as necessary...” are present in the language of the Act.
In addition, because wholesalers and third-party logistics providers (3PL) need the capability to infer contents of pallets and cases to conduct their business efficiently, they are requiring serialized product to be aggregated. Without aggregation and inference, wholesalers and 3PLs would need to break down all packaging levels to the smallest saleable unit to determine which unit-level serial numbers are involved in a transaction. Therefore, while aggregation is not legally required per DSCSA, it is required by many trading partners and is becoming the industry standard.
The DSCSA was signed by the president and was an act of Congress, meaning that noncompliance will be penalized through legal action. More specifically, the DSCSA (Section 585 (b)(4)(C)) modifies Federal Law 21 U.S.C. 331 to include noncompliance with aspects of the DSCSA as a “Prohibited Act.” In addition to compliance dates and requirements for T3 documentation (Transaction History, Transaction Information and Transaction Statement) and serialization, prohibited acts will include reselling or misbranding a product and failing to report issues with shipments and/or suspect or illegitimate product (within 48 hours).
“Failure to comply with DSCSA can lead to fines, suspension or revocation of license, and even potential imprisonment or civil penalties,” according to FDA.3 While the DSCSA does not specify what the penalties will be, Federal Law 21 U.S.C. 333 specifies penalties for a prohibited act to include:
The DSCSA also establishes the primacy of the FDA in regulating the pharmaceutical supply chain; the state will not control what penalties are faced under the DSCSA.
Implementation of the requirements in the DSCSA poses many challenges. Operational bottlenecks can be expected for several years as additional requirements are implemented through 2024. As each system goes online, it will be necessary to “work out the bugs” and provide additional training for production and warehouse personnel.
Implementation costs may be a further obstacle for smaller companies. Although the up-front costs will be fairly well defined (i.e., the purchase of software and hardware to create a serialization system), costs to upgrade IT infrastructure remain ill defined. The setup of a serialization system and associated databases, ensuring compatibility between the serialization system software and other software management systems in a facility and long-term maintenance of databases, may stress already stretched IT and production departments.
Serialization efforts must be scalable to support increasing DSCSA tracking requirements. A tremendous amount of tracking data will be generated at many levels. Serial numbers for unit-level serialization must be FDA’s SNI guidance, with 2D barcodes expected to be most widely used, but GTIN barcodes are another option. Local data management systems must allocate, store and communicate assigned serial numbers and associated data.
Systems must also be in place for tracking at the pallet or case level to allow traceability back to the manufacturer in case of an investigation or damage. Software services will need to identify individual numbers in an aggregate, if necessary. In addition, supply chain partners will need to share product location and transaction information throughout the distribution process, which may be difficult if partners use different software systems.
There is, however, currently no agreement on how the data and databases generated as the result of track/trace activities will be managed. In the distributed model, each organization stores and transmits its own data as required. In the semi-centralized model, organizations transmit data to one of several databases managed by third parties. In the centralized model, traceability data would be transmitted to a single repository managed by the government or an industry consortium.
In fact, at this point in the implementation of DSCSA requirements, the greatest challenge appears to be data management. A standard data format has not been mandated by FDA but will be essential if data is to be easily shared among supply chain partners.
With deadlines quickly approaching for serialization requirements, a strong cross-functional team is crucial to implementing new serialization systems and processes.
Alcami is prepared. We provide proactive project management and technical expertise to streamline customer onboarding and ensure continuity of supply. Our packaging lines have been upgraded for full serialization and aggregation capability and will be fully compliant with the new regulations. Furthermore, Alcami offers its customers a universal connection point for the exchange of serialized data via an enterprise serial number management platform. This universal connection point minimizes onboarding efforts and gives customers access to any Alcami packaging line and packaging format.
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