On this significant day, November 27, 2023, I find myself thinking about our slow and steady (emphasis on slow) march toward DSCSA compliance over the past 10 years. Introduced to serialization in 2015 as an LSS Black Belt at a pharma repackaging facility, little did I anticipate that discussions about barcodes would persist in my life for eight years! The evolution of track and trace has become a significant facet of my career, contributing to an unprecedented collaborative effort in the pharma supply chain.
Despite the FDA’s recent one-year reprieve of enforcement discretion, emotions regarding the delay linger. The industry’s exhaustive efforts were supposed to be visible after November 27, 2023. This change in the “roll-out” of the DSCSA track and trace prompts crucial questions about the path forward, preparation strategies, and the implications of the extended timeline through 2024.
Before diving into the intricacies of this delay, let me share insights from the discussions at the
HDA Traceability Seminar in Washington, D.C., which served as a timely convention for those eager to discuss the delay. Stakeholders were cautioned against interpreting this as a reason to delay implementation efforts. Instead, the emphasis lies on utilizing this time judiciously to troubleshoot, refine systems, and ensure continued product availability for patients. This extension is not a halt but an opportunity to enhance the development of interoperable systems and processes, emphasizing the importance of using this time for constructive advancements in readiness and collaboration within the industry.
So, what kind of conversations are we having now? How do we predict this next year will unfold? Will we experience another delay next year? Below, I dive into some common themes (mostly questions!) that I’ve noticed floating around the industry with clients, service providers, and industry thought leaders.
Conversation #1 with clients:
Some conversations we have been addressing with clients since the announcement are...
Do we still need to meet the 11/27/23 deadline?YES! The enforcement discretion was intended for companies to continue to pass serialized data amongst trading partners. However, the serialized transaction information is not the “legal document” for the transfer between seller and buyer (the Lot Level T3 data will still be used to demonstrate ownership changes). In essence, the serialized data is an extra piece of information that should be transferred and promoted to production so the industry can learn about defects and issues now. In several forums, the FDA has commented that they still expect companies to act “as if” the November deadlines are in full effect by passing serialized data amongst trading partners. The other key requirement for serialized tracing (which is dependent on serialized data exchange) has essentially been pushed out until November 27, 2024.
Will errors/exceptions cause products to be quarantined in 2024?Yes and no. Since the legal document is not with the EPCIS data during the stabilization period, errors in the EPCIS data should not prevent companies downstream in the supply chain from distributing the product. The reality is, given how inventories work in the industry, we do expect that in advance of November 2024 (HDA even published a letter that recommended that the industry pushes for data accuracy from manufacturers in the spring of 2024 timeframe), companies will want to shield themselves from having large amounts of inventory classified as “product no data” because, operationally, that is challenging and puts potential risks on the business.
How can we stay agile and ready for potential changes?This question is difficult as “budget fatigue” exists around DSCSA compliance. What we are encouraging companies to do is invest the time and resources in setting up processes to proactively monitor (as best you can) the data exchanges for errors and to treat exceptions as if they were causing products to be quarantined. Cross-functional engagement will be critical, so now is the time to use case studies and real-life examples to get teams to understand their roles and responsibilities. It is also an excellent time to do a deep dive and potential rewrites on your SOPs. Also, attending industry forums and participating in pilots is another great way to stay connected.
Conversation #2 with service providers / technology solutions:
As we continue to work with our peers, here are some discussions about optimizing and improving systems next year and beyond.
Master Data Management is still a challengeThe industry still needs to be centralized with this information, so a reliance on spreadsheets and manual entry is still the norm. Most service providers see value in sharing information more automatedly, but it comes down to building consensus and trust.
Exceptions, Exceptions, ExceptionsIt is no longer as important to staff for implementations, but what about ongoing issue support? Service providers are considering changing staffing models and processes for handling issues, especially with the industry’s resource constraint. Many service providers have or are launching new exception management tools to assist clients in identifying and managing exceptions. It will be interesting to see what advancements and improvements can happen in this space. Especially as many of them want to allow the fixing of exceptions to be more straightforward and “self-service.”
Can we build more proactive vs. reactive ways to identify counterfeit drugs?With the potential focus on basic compliance behind the industry after 2024, many of the service providers want to enable the industry to not only react to counterfeit medicines but also to implement tools to prevent an issue from occurring in the first place. While doing business with trusted partners is important (and no technology solution can replace that), providers are looking at other ways. Items like alerts; in theory, many of these could work, but it depends on companies either sharing information or instituting an operational process (like additional scanning) that may not be required in the statute.
What other insights does the serialization data provide to the industry?Predictive analytics is a hot topic across multiple industries right now, and many see the serialized transactional data as a gold mine for opportunities to allow companies to understand better inventory usage across the channel, which can help companies better forecast supply, which impacts the bottom line by reducing product waste. In particular, data around returns and chargebacks with more granularity can aid in dispute processes and reduce write-offs.
Conversation #3 with industry thought leaders:
Some conversations I've had with various industry thought leaders include...
Frustration with lack of responsivenessOngoing struggles persist in what many view as the fundamental aspects involving the basics and blocking/tackling of DSCSA. Issues such as barcode formatting, absence of aggregation, failures in EPCIS file formatting, and the ongoing battle to secure funding remain prevalent. Despite these challenges, companies seem to lack visible progress, with many maintaining a “silent” stance.
A delay helps but also causes issuesThe operational challenge of supporting both lot-level and serialized environments hinders the comprehensive testing of systems, as there is a reluctance to quarantine products before the necessity for a demonstrable need arises. The absence of upstream data further complicates the transmission of data downstream. Looking ahead to 2024, the industry anticipates continued emphasis on data exchange, with concerns that tracing initiatives may be relegated to the “back burner” due to perceived challenges and a potential lack of progress, potentially leading to delays in meeting tracing requirements.
Starting to see the benefits. The “Value Beyond Compliance” tagline might start being a realityDistribution facilities have observed improved picking accuracy metrics through rigorous enforcement of serialized scanning, as it compels team members to scan rather than count. A leading manufacturer achieved substantial savings by implementing serialized barcode scanning in reverse logistics, linking it to their serialization/ERP system to identify actual sales prices for return claims. The focus on returns and chargeback adjudications remains significant, as the current system’s reliance on tying pricing adjustments to NDC/LOT is perceived as susceptible to potential discrepancies. Knowing the precise purchase date on an invoice helps address uncertainties associated with price changes, offering a more robust solution.
It is up to us & we can’t give up nowSustained engagement with groups such as PDG, GS1, and HDA is imperative for developing standards and fostering collaborative efforts within the industry. As companies increase their data exchange activities during the stabilization period, a wealth of learning remains to be uncovered, with unforeseen scenarios unfolding. Despite progress being made, a significant portion of the industry still requires education on evolving practices, and we must work together to promote ongoing dialogue with the FDA and State Regulators, enabling the crafting of enforcement policies that align with industry initiatives while encouraging companies to comply with evolving standards.
2024 and beyond
As we navigate the extended deadline at Two Labs, our commitment is to leverage this opportunity for positive progress. We emphasize the transition to action by passing and analyzing serialized data. Shaping the trajectory of our collective response for 2024 requires moving from hypothetical discussions to execution. This shift will yield tangible insights and case studies, enabling strategic adaptations in our approach. Despite the perception of having “one more year,” we are essentially embarking on a new day-to-day in an enhanced drug distribution system. Adopting a “2024 and beyond” mentality is crucial, ensuring that FDA discretion or future reprieves do not hinder investing in the improved system and maintaining diligence in error tracking.
While my initial hope for 2023 to be a decisive year was admirable, the more realistic expectation is a gradual improvement, with a continuous increase in serialized data exchange quality over several years. When I was first diving into what DSCSA was all about, 2023 felt like such a long time away, and the day has come. I am thankful for the dedication of my peers in the DSCSA circles, the professional and personal friendships that have formed, and, ultimately, the opportunity to work toward pharmaceutical supply chain security.
About the Author
Michael Rowe is the Director of Serialization at Two Labs. He is well known for his DSCSA expertise and has spoken at several industry conferences and events, and he is a Lean Six Sigma Black Belt. Prior to Two Labs, he spent time with a large wholesale distributor as a manager of their Track & Trace program, advising all their divisions, suppliers, and customers on DSCSA requirements.