Valerie Bandy, PharmD

Drug Supply Chain Security Act (DSCSA) compliance requirements took effect on November 27, 2023. The clock is now ticking on a one-year stabilization period (November 2023-November 2024) during which trading partners must work to achieve fully interoperable, electronic tracing of drug products at the package level and verification of saleable returns.

With its aims to protect healthcare consumers against the dangers of counterfeit, contaminated, stolen or otherwise harmful drugs, the DSCSA represents a significant step forward in securing the pharmaceutical supply chain.

Defined as “dispensers” by the FDA, hospital pharmacies are expected to play a central role in facilitating DSCSA requirements. However, many hospital pharmacy leaders and staff members don’t understand what it takes to become “DSCSA-ready” to keep their patients safe.

Collaboration for compliance and efficiency

For a hospital pharmacy team to define steps they should take to support the DSCSA, and in turn protect the integrity of their supply chains and safety of their patients, it is helpful to start by understanding the broader work of their pharmaceutical trading partners.

Success of the DSCSA is highly dependent on the collaboration of all pharmaceutical supply chain stakeholders, including drug manufacturers, wholesalers, healthcare organizations and their pharmacy teams. Another key collaborator category encompasses the technology providers with enabling solutions for trading partners to provide, receive and maintain documentation about products and ownership electronically.

Communication of drug custody data from one trading partner to the next requires the integration of systems and data. Manufacturers and wholesalers have been working with technology solution providers to facilitate this level of comprehensive information.

The objective is to establish a digital history (aka e-pedigree) for prescription drug products in compliance with the DSCSA. This pedigree must accompany the delivery of drugs at a healthcare organization so that the pharmacy team can confirm the legitimacy of the drugs’ chain of custody.

Adapting pharmacy operations for DSCSA compliance

While pharmaceutical manufacturers and wholesalers are partnering with technology providers to align their systems and processes for DSCSA compliance, hospital pharmacy teams should also be working to meet the November 2024 DSCSA deadline with workflow adaptations of their own. For those teams still heavily reliant on disjointed legacy systems and manual processes for drug procurement and inventory management, achieving seamless electronic tracking and tracing of drugs can seem like an insurmountable task as the clock clicks down.

Hospital pharmacy teams with outdated supply chain processes will face challenges with key DSCSA requirement, including:

Confirming that prescription drug products arrive with their transaction history (TH), transaction information (TI), transaction statements (TS), and package identifier (PI) to identify the prescription pharmaceutical product down to the package level.

Storing product tracing information in a secure format for six years.

Generating and providing product tracing documentation with the transaction when selling a prescription drug to a trading partner.

To overcome these challenges and support the patient safety objectives of the DSCSA, pharmacies are turning to end-to-end, digital supply chain management (SCM) solutions. With automated package level data capture, verification and tracking from time of drug product receipt through dispensing, pharmacy teams can document the information they need to satisfy DSCSA requirements.

When evaluating a SCM solution for the pharmacy supply chain, be sure to select one that integrates DSCSA software, to simplify and streamline compliance. Additionally, comprehensive pharmacy staff training on the chosen solution is critical to successful implementation and use.

Future trends in pharmaceutical supply chain management

Facing continued prescription drug cost increases, drug product shortages, and global supply chain disruptions, on top of demands for electronic tracking and tracing under the DSCSA, the future of pharmaceutical supply chain management will feature greater modernization, centralization, innovation, and a patient-first focus on safety.

Advancements in track-and-trace technologies will help bridge current gaps in pharmaceutical supply chain visibility and control that are fundamental to DSCSA success. Today, the transition from manually documenting the movement of drug products within a healthcare organization to automated data capture via barcode and RFID scanning supports greater accuracy and completeness in documentation. Automation also drives improved efficiency and productivity, which is critical at a time of ongoing pharmacy staff shortages.

To maintain drug supply continuity for patients, hospital pharmacy teams are also engaging in predictive analytics for better inventory control. The automation of supply chain processes and real-time digital data capture required for DSCSA compliance simultaneously supports advanced analytics by generating an accurate and complete data set. Analytics tools are only as good as the data feeding them. Data quality is becoming even more critical with the transition toward artificial intelligence (AI) for insights generation.

The evolution of pharmacy supply chain, with the integration of SCM solutions with electronic health record (EHR) systems, supports a patient-first focus by tracking and tracing drug products down to the individual patient. If a pharmacy team identifies an illegitimate drug in its supply chain, it can quickly determine whether the drug was dispensed, and to whom.

While some pharmaceutical supply chain stakeholders might view their work around the DSCSA as checking a regulatory compliance box, the patient safety implications of end-to-end, electronic tracing of drug products are significant.

The dangers of counterfeit drug products to public health are real; as evidenced by the FDA’s recent seizure of thousands of counterfeit Ozempic (semaglutide) injections from the legitimate U.S. drug supply chain.

 When fully implemented, the DSCSA will allow pharmaceutical supply chain stakeholders to more quickly identify illicit drugs to keep them out of the hands of clinicians and patients.

When a manufacturer or wholesaler arrives at the hospital with a drug product delivery, the pharmacy team can quickly identify suspect products (e.g., missing required documentation) and quarantine them until their legitimacy has been validated. This quarantine process is a fundamental DSCSA requirement for hospitals.

If suspect or recalled drugs have already been received into the healthcare organization’s pharmacy supply chain, the pharmacy team can quickly identify their storage location and remove them - in the consolidated pharmacy distribution center, automated dispensing machines, storage carousels, robotics, outpatient facilities, satellite pharmacies, etc.

. When electronic tracking and tracing of drugs is implemented down to the point of dispensing, the hospital’s SCM solution can alert the pharmacy team to suspect or recalled drugs with the scan of the product’s barcode, preventing administration of the drug to a patient.

DSCSA compliance is fundamental to the evolving landscape of pharmaceutical safety and integrity and the future of pharmaceutical supply chain management. Hospital pharmacies that implement technologies and processes to quickly identify and address risks throughout their supply chains and train their teams to be vigilant of the threats can protect their patients and prevent harm. They can also protect their healthcare organizations from the noncompliance and legal ramifications of dispensing illicit drugs.

The first step in DSCSA compliance is to become familiar with the Act and the responsibilities of hospitals as dispensers. From there the pharmacy team can assess its supply chain workflows, identify compliance gaps, and implement technology solutions to address them.

Hospital pharmacies that place the DSCSA at the core of their overall supply chain modernization and centralization efforts can not only achieve a patient-first focus on safety, but also gain visibility, efficiencies, and insights to improve overall operational and financial performance.

1. FDA warns consumers not to use counterfeit Ozempic (semaglutide) found in U.S. drug supply chain, FDA, December 21, 2023, 

https://www.fda.gov/drugs/drug-safety-and-availability/fda-warns-consumers-not-use-counterfeit-ozempic-semaglutide-found-us-drug-supply-chain

Valerie Bandy, PharmD, is Senior Director of Pharmacy Solutions at Tecsys.

Articles

With its aims to protect healthcare consumers against the dangers of counterfeit, contaminated, stolen or otherwise harmful drugs, the DSCSA represents a significant step forward in securing the pharmaceutical supply chain. 

Streamlining for Safety: Navigating Changes and Trends in the Pharmaceutical Supply Chain Post-DSCSA

In the ever-evolving landscape of healthcare supply chain management, the Drug Supply Chain Security Act (DSCSA) looms large. With the November 2023 DSCSA compliance requirements officially taking effect the 27th of this month and a one-year stabilization period following that, there is an added urgency to ensure traceability and transparency in the pharmaceutical supply chain. The need for efficient and streamlined pharmacy operations has never been more critical given shifting regulations and compliance requirements.

While traditional pharmacy logistics have been effective, they now face new challenges in the modern pharmaceutical landscape. The DSCSA mandates fully interoperable, enhanced electronic unit-level drug traceability requiring a serialized identifier, as well as verification of saleable returns for manufacturers and trading partners. With the complexities of medication management, drug shortages and global supply chain disruptions, there is a pressing need to adapt and innovate in pharmacy logistics.

Against the backdrop of these DSCSA compliance requirements, the future of pharmacy logistics lies in centralization, modernization, and strategic use of technology. By adopting a patient-first approach that harnesses supply chain innovation, healthcare systems can ensure timely, affordable, and efficient access to essential medications while ensuring full compliance with regulatory standards. As the healthcare landscape continues to evolve, centralized pharmacy distribution, combined with modern systems and automation, will play an essential role in shaping the future of medication management and patient care.

After becoming authorized and licensed, all trading partners have an obligation to familiarize themselves with the law and communicate their plan for compliance to their customers. They must provide, capture, and maintain information about transactions involving products distributed within the United States and the trading partners who engaged in such transactions of products. Manufacturers and repackagers are required to include a product identifier with standardized graphics, an encompassing NDC (national drug code), a serial and lot number, and an expiration date. These details must be available in both human and machine-readable formats using 2D data matrix barcodes for packages, and either linear or 2D data matrix barcodes for homogenous cases.

They are also required to establish systems and processes to:

Respond to verification requests of the product identifier on certain packages or homogenous cases of product (for manufacturers, repackagers, wholesalers), and the product identifier on saleable return product to determine whether the product is suspect (applicable to manufacturers, repackagers, wholesalers, and distributors).

Conduct investigations to determine if a product is illegitimate after identifying a product as suspect, or upon receiving a verification request from the FDA. They must also quarantine suspect product as a potential counterfeit, unfit for distribution, and potentially dangerous (applicable to manufacturers, repackagers, wholesalers, and distributors).

Promptly notify the FDA when suspect product is confirmed as legitimate, quarantine, and disposition illegitimate product, and notify the FDA and other stakeholders if an illegitimate drug is found or if product with an elevated risk of illegitimacy is identified (applicable to manufacturers, repackagers, wholesalers and distributors).

Much of this is achieved via modern software applications that offer more than just operational efficiency. These applications are pivotal in ensuring compliance with regulatory frameworks like the DSCSA. They enable real-time tracking to ensure traceability, a core requirement of the Act. With predictive analytics to anticipate medication needs, they ensure that patient care is not compromised even with the added layers of regulatory compliance. And with the potential integration of automation in centralized pharmacy operations, they can significantly reduce human errors, ensuring more accurate and efficient drug distribution, which is paramount in the face of strict regulatory requirements.

Compliance from a health system’s perspective

Pharmacy supply chain management at the health system level is going through a period of innovation and maturation. As healthcare providers adopt emerging best practices like consolidated pharmacy service centers (CPSC), they are paying greater attention to logistics optimization, traceability, system modernization, and regulatory compliance. As this awareness grows, they are increasingly expecting the same level of sophistication from their pharmacy distribution counterparts.

With DSCSA requirements in full effect, health systems must now ensure they become familiar with the law and ensure their trading partners do the same. Their teams must be trained on handling suspect or illegitimate products, on verifying that trading partners are authorized, and on the timely reporting concerning licensing or quarantined product. If they are delivering to non-owned facilities or customers, they must also provide product tracing information.

While the specific impacts and compliance requirements may vary between the pharma industry and the health systems that rely on those pharmaceuticals, one undeniable truth remains: the importance of accurate DSCSA compliance is a shared imperative. Central to this is harnessing the transformative potential of centralized pharmacy distribution, the role of modern systems, automation integration, and the importance of all partners adhering to the stringent regulatory frameworks.

As we enter an era where DSCSA compliance is non-negotiable, there are many reasons why health systems care that pharma companies and their distributors are DSCSA ready now, including:

 At its core, the DSCSA aims to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. If pharmaceutical companies and their distributors are not DSCSA compliant, it could compromise the safety and efficacy of the drugs that pharmacies dispense to patients, causing illegitimate products to enter the market.

 The DSCSA mandates enhanced drug traceability throughout the supply chain. Pharmacies rely on this traceability to ensure they are receiving legitimate products. If pharmaceutical companies or distributors are not compliant, it could disrupt the integrity of the entire supply chain.

 Health system pharmacies operate more efficiently when they can trust the provenance of their products. Delays or uncertainties in verifying the authenticity of drugs can disrupt pharmacy operations, leading to potential delays in patient care.

 Pharmacies also have their own set of DSCSA requirements to adhere to. Working with DSCSA-compliant pharmaceutical companies and distributors makes it easier for pharmacies to meet compliance obligations.

 Non-compliance with DSCSA can result in significant penalties and fines for pharmaceutical companies and distributors, which could indirectly impact their business relationships and pricing structures with pharmacies, and in turn affect their downstream customers, the health system pharmacies and others.

 Pharmacies want to work with reputable suppliers. If a pharmaceutical company or distributor is not DSCSA compliant, it could raise questions about their overall commitment to quality, safety, and regulatory adherence. This could erode trust with the health system’s downstream patients and customers, as well as with its trading partners.

 Non-compliance by any pharmaceutical trading partner could expose pharmacies to potential legal and reputational risks, especially if counterfeit or compromised drugs enter the supply chain.

 The DSCSA requirements have been phased in, with more stringent requirements set to roll out. Pharmacies want to align themselves with forward-thinking pharmaceutical companies and distributors that are both compliant now and prepared for future regulations.

The interconnected roles of pharmacy-related trading partners highlight the critical need for alignment in the supply chain. As we move forward, it is imperative that all stakeholders recognize that DSCSA readiness is not just a regulatory necessity, but a fundamental commitment to patient safety, supply chain integrity, and the future of healthcare. By forging strong partnerships, staying proactive in compliance efforts, and embracing innovation, we can ensure a safer, more efficient and resilient supply chain.

With new mandates right around the corner, there is an unwavering demand for pharma operations to perform at peak efficiency.