FDA Provides More Clarity on DSCSA

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The weeks preceding the US Drug Supply Chain Security Act’s (DSCSA’s) Nov. 27, 2018 serialization deadline were full of new developments. In September, FDA issued final guidance on grandfathering (1), which exempts pharmaceutical products that were packaged before Nov. 27, 2018 from serialization requirements. In September, the agency also published final guidance on use of the National Drug Code (NDC) (2), as well as draft guidance in the form of a Q&A document on product identifiers (3). FDA now requires that the NDC be placed on each package, rather than embedded in GS-1’s Global Trade Item Number (GTIN). This means that manufacturers who assign GTINs to product packages will now also need to include the NDC, assigned by FDA to identify drugs and to submit registration and listing information (4), separately on each package. 

In July 2018, according to an October report (5), FDA began enforcing DSCSA traceability requirements, issuing its first DSCSA-related form 483 to the US pharmaceutical distributor McKesson (6). The 483 cited inadequate tracing, quarantine, and communication systems for responding to counterfeit product. 

A progress report from GS-1 

On October 18, the standards-setting group, GS-1, released its status report on how well US manufacturers are handling serialization. The report is based on research that the group conducted in May 2018, scanning product barcodes at AmerisourceBergen, McKesson, and Cardinal Health’s distribution facilities (7). GS-1 studies in 2017 had only involved AmerisourceBergen and McKesson. This year’s number fell short of the 30–40% expected, but still reached 20.7%, up significantly from 6.6% in 2017. For Cardinal Health, the figure was 15.1%. 

Observers see these results as positive. They definitely reflect the grandfathering policy, which allayed manufacturers’ concerns about having to maintain two supply chains and raised specters of possible shortages. “We probably won’t see 100% serialization for another two to three years,”says Julien Faury, vice-president of operations at Adents. 

The product identifier guidance means that manufacturers will have to keep the product’s NDC on the package, with the bar code on the side, says Faury, instead of only using the GITN with embedded NDC on the package. 

“Manufacturers are reviewing labels, and some may have to reduce the size of the artwork,” he says. Bob Celeste, founder of the Center for Supply Chain Studies, also sees the results as a sign of progress. For one thing, he says, the barcode scans were performed in May, so things may be quite different now. “There are a number of manufacturers who are ready to go with serialization now, but aren’t doing it until they absolutely have [to],” he says, due to grandfathering but also some issues with line speeds. 

“Many of the manufacturers that we have talked with had spent significant time over the summer continuing to test lines, troubleshoot data issues, and validate systems, and there has been a significant amount of knowledge sharing going on among manufacturers, contract manufacturing organizations (CMOs), and third-party logistics providers during this time,” says Brian Daleiden, vice-president of industry marketing at TraceLink, who agrees that results are encouraging. 

Grandfathering will provide some buffer for manufacturers. Initially, it was expected to apply at the point of shipping, and manufacturers were looking at scenarios where they might have to thin down supply, says Celeste. 

“Having it apply at the point of manufacturing will allow them to continue to manufacture product as usual, and then cut over to serialized lines at the end of the month,” he says. 

However, it will also add complexity, because hybrid inventory will exist in the supply chain, says Daleiden. Distributors, dispensers, and healthcare organizations will need to prepare for an environment in which serialized, non-serialized but grandfathered, and non-serialized but exempt medicines will all co-exist for an extended period of time across the supply chain, he says. 

No more give on deadlines 

One thing is certain, Celeste says, and that is that there won’t be any more ‘give’ on US enforcement deadlines. “Some companies already have lines serialized but don’t have them turned on yet, and moving enforcement dates around a lot can make things difficult. It’s like box cars on a train, after you’ve hit hard on the brakes,” he says. 

Despite progress, challenges remain around data quality, data formatting, and artwork adjustments, says Daleiden, particularly when there is a disconnect between a manufacturer’s assumptions and plans and those of their trade partners. He expects these problems to get worse as the 2020 deadline approaches, because most hospitals and pharmacies do not have direct trade or communication connections with original manufacturers. There isn’t as much collaborative conversation and testing between manufacturers and distributors as there should be, he says. The key will be communication and education, says Daleiden, because compliance 

with DSCSA is a shared responsibility. “If a manufacturer affixes a serialized product identifier on a pack, but it isn’t correctly readable by a member of the supply chain, it immediately raises all kinds of questions about error correction, exception management, and potential suspect product procedures,” he says. Manufacturers can implement their own version of supplier letters to downstream trading partners, informing them of their serialization and grandfathering plans, decisions on data fields like GTIN and expiration data, and testing protocols that they would like to execute, Daleiden suggests. 

“It will take some time to work out all of the quality and misaligned expectations, but the grandfathering buffer will be critical in enabling manufacturers and trade partners to work out remaining technology and business process issues post-November 2018,” says Daleiden. In the meantime, he says, “The focus has to move from putting a barcode on a package, to considering the challenges of ensuring that someone else can make sense of the information in that barcode.” Overall, standards will be hugely important, he says.

Progress in Europe 

Progress in Europe has been affected by the fact that requirements for master data changed in 2018, requiring updates, says Faury. In addition, individual countries such as Portugal are asking companies to download data to national hubs, so manufacturers must now send serialization data to both the central hub and national hubs. 

“In Europe today, the level of serialized product is similar to what it is in the US at around 20% or 25%, but I don’t think even 5% of hospitals and pharmacies can handle serialized product. It will take another two or three years for them to be ready and fully operational,” Faury says. “A lot of this is just growing pains and trying to get a huge supply chain to move forward in step,” says Celeste. 

Blockchain projects flourish 

Another noticeable trend is pharma’s increased acceptance and interest in evaluating blockchain for supply chain traceability and other applications. Adents and Microsoft are working on three pharma blockchain initiatives using the Novatrak platform. They plan to launch a pilot program after FDA guidance on DSCSA pilot testing is finalized, as expected in December. 

In October, in Europe, the contract packaging company Tjoapack and the data management specialist, Veratrak, launched Epoch to explore the use of blockchain in life sciences. The venture will also share and extend a blockchain-based data exchange tool for product master data that the two companies have developed and are now launching at Tjoapack, says program manager Dexter Tjoa. The Center for Supply Chain Management is also progressing to the next stage of its blockchain research and pilot program, with more news expected by the end of 2018. 

References 

1. FDA, Grandfathering Policy for Packages and Homogenous Cases of Product Without a Product Identifier (CDER, CBER, ORA, September 2018), fda.gov
2. FDA, Product Identifier Requirements Under the DSCSA Compliance, Guidance for Industry (CDER, CBER, ORA, September 2018), fda.gov
3. FDA, Product Identifier Requirements Under DSCSA Q&A, Draft Guidance, (CDER, CBER, September 2018), fda.gov
4. GS-1, “FAQs by the Pharmaceutical Industry in Preparing for the US DSCSA,” gs1us.org, May 23, 2017.
5. D. Kracor and A. Gitterman, “FDA Issues Guidance Documents and Begins DSCSA Enforcement,”arnoldporter.com, October 15, 2018.
6. FDA, Form 483 to McKesson Corporation, fda.gov, July 23, 2018.
7. GS-1, “2018 Update, Impelemntation of DSCSA Serialization Requirements,” gs1us.org, October 19, 2018.

Article Details

Pharmaceutical Technology
Vol. 42, No. 11
November 2018
Pages: 50–51

Citation

When referring to this article, please cite it as A. Shanley, "FDA Provides More Clarity on DSCSA," Pharmaceutical Technology 42 (11) 2018.