As the pharmaceutical supply chain transitions into full compliance with the Drug Supply Chain Security Act (DSCSA), one issue that has been simmering below the surface for years is now starting to boil over: exception handling. While much of the attention has focused on barcodes, serialization data feeds, and SOP enforcement, the day-to-day disruptions caused by data and product mismatches are becoming a defining challenge, especially as dispensers have now moved into full compliance as of November 27, 2025.
Here’s what manufacturers, wholesalers, and pharmacies need to understand and address before exceptions become disruptions.
What is Exception Handling?
The FDA clarifies that a DSCSA exception constitutes a “clerical error” when serialized product data doesn’t match the physical shipment or when there is a problem with the data, but there is no inherent issue indicating that the product is counterfeit, stolen, or diverted. For example, the product arrives without a corresponding data file, the data arrives after the product hits the dock, or is incomplete, inconsistent, or formatted in a way that the receiver can’t use.
In pre-DSCSA supply chains, these scenarios were burdensome. Under DSCSA, they’re showstoppers. While issues such as damage, shortages, and overages are common supply-chain pain points, the industry has spent decades developing standard procedures to manage them. Now that the transaction data must be accurate down to the unit level, making these corrections requires a lot more coordination and updates to multiple systems.
To ensure data integrity and immutability of the track and trace data, the serialization systems don’t naturally allow users to modify data. Over the past decade, as the industry has implemented increasingly precise product-transfer requirements, we’ve reached a point where even non-suspect, physically sound pharmaceuticals may be held due to a data discrepancy. Now that dispensers are subject to these same standards, the impact extends beyond the manufacturers and distributors – product flow interruptions are being felt across the entire supply chain. And because of the compliance implications, downstream partners operating under strict regulatory guidelines cannot deviate from protocol or release quarantined product, even when the issue is purely data-related.
What’s the real cost of exceptions?
What makes exception handling urgent isn’t just the risk of fines or warning letters, especially as the FDA and state boards shift from policy development to active enforcement, but the ripple effect on patient access and supply chain efficiency. More importantly, exceptions introduce vulnerabilities and inconsistent or delayed data, which can make it more difficult to detect counterfeit products.
The final DSCSA enforcement wave is now complete, with dispensers on the hook for the entirety of their DSCSA requirements (except small dispensers with 25 employees or less, which will be in November 2026), and while manufacturers and wholesalers have had years to prepare, many pharmacies are only now beginning to grapple with the reality of serialized product intake.
While wholesaler networks are equipped to handle high volumes of inventory across multiple sites and formats, pharmacies often operate under just-in-time inventory models. This means exceptions — whether due to data mismatches or product availability — can be even more disruptive. Every hour spent managing exceptions is an hour diverted from patient care.
For example, a retail pharmacy may receive a shipment of oncology drugs with an unreadable 2D barcode on one of the packages. Without access to the correct transaction data, that product must be quarantined, which will delay treatment for a patient scheduled for same-day administration.
In another scenario, a health system pharmacy receives serialized products from three different manufacturers, each using a different data portal and format. When one shipment’s transaction data fails to arrive, staff must pause intake, notify procurement, and potentially delay downstream fulfillment.
Alternatively, there could have been a full shipper case packaged by the manufacturer, passed through the supply chain, and it isn’t until the product is being prepared for dispensing that a manufacturing error is identified (known in the industry as a hidden aggregation error).
This makes exception handling not just a supply chain issue, but a pharmacy operations issue, and ultimately a patient safety issue.
What Needs to Happen Now
Now that the DSCSA’s phased approach has culminated in full enforcement, requiring all trading partners — from manufacturers to dispensers — to be able to send, receive, and verify serialized product data electronically using a standardized and interoperable format.
This final phase isn’t just a technical milestone, but a foundational shift aimed at safeguarding the legitimacy of the drug supply chain and preventing counterfeit or illegitimate products from reaching patients’ hands.
To meet that goal, stakeholders must take proactive steps now.
Here’s where to start:
- SOPs need to be more than documents.
Exception handling procedures must be embedded into operations—regularly trained on, tested, and updated as new exception types emerge. There also needs to be flexibility for users to make decisions about how to resolve certain exceptions without 100% certainty, provided that proper oversight and documentation are in place, without hindering patient care. - Data must be treated as product-critical.
If your quality team tests packaging materials, they should also validate barcode integrity and ensure clean, consistent data transmission. - Packaging must align with operational realities.
“Right-sizing” packaging that reflects how customers order, receive, and dispense product can reduce mismatches and lower the risk of exception triggers. - Technology must enable, not hinder, resolution.
Exception handling requires systems that are not only compliant but also interoperable, scalable, and capable of resolving exceptions quickly as volumes grow. This includes working with your partners to understand how to correct data failures easily, while doing it in a controlled manner. Submitting an IT ticket with a serialization vendor that takes days for someone to address is not sustainable; more power (but with the right oversight) needs to be given to users. - Documentation is not a nice-to-have; it is a necessity.
In the finalized guidance from the FDA regarding the expectations for industry compliance with the enhanced drug traceability requirements, commonly referred to as the “EDDS”, it is noted that companies, when working through exceptions, should maintain proper documentation of what occurred and how the issue was resolved. “The documentation should include the nature of the error, a description of how the error was resolved, the names of the persons involved, and the date of resolution.” It will be crucial to demonstrate to the regulator that these clerical errors are being promptly addressed and assessed to ensure that there is no larger issue with diverted counterfeit products entering the supply chain. Performing an email search isn’t enough.
Ready for 2026? Let’s Make Sure
With full DSCSA enforcement on the horizon, now is the time to strengthen your exception handling procedures and ensure your systems are ready for interoperable data exchange. We also highly encourage stakeholders to reference some great public resources from HDA and PDG. Click to jump to those resources.
Two Labs can help
From SOP audits and exception process mapping to pharmacy-readiness assessments and packaging optimization, we’re helping clients turn DSCSA compliance into operational confidence.
Let’s discuss where you are and how to get you where you need to be, not only to avoid compliance risks but also to enhance your operational efficiency.
Ready to learn how Two Labs can ensure your supply chain is running efficiently?