Articles

2020 Pharma Traceability Vendor Directory

Hello readers! The editorials that have run on this page in every issue of 

 usually are cast as words from on high; this time it’s a little more personal.

After 15 years, I’m giving up the editorship of 

. The organization behind it, Healthcare Commerce Media, has been acquired by MJH Life Sciences, which bills itself as “the largest privately held, independent, full-service medical media company in North America.” MJH Life Sciences publications range from pharma research and manufacturing through to pharmacies, and with a large number of medical specialties. “The acquisition of 

 serves as a perfect complement to the publications already in our portfolio,” said Mike Hennessy Jr., president and CEO of MJH Life Sciences, and we couldn’t agree more.

Those 15 years have been an era of enormous change in the pharma industry: biologics and specialty pharmaceuticals were just hitting their stride in the early 2000s; likewise, drugs for rare diseases; while cellular and genetic therapies—generating so much excitement in today’s industry—were objects of curiosity in the deeper recesses of laboratories.

 shows how far the industry has come since then. Big topics at the time were the conversion to fee-for-service for wholesaler services (from what had been sometimes labeled as “speculative buying”); and FDA was trying to interest industry in a product-authentication scheme based on radio-frequency identification (RFID). Medicare Part D was still taking shape, the result of the Medicare Modernization Act of 2003.

RFID pops up in the June 2020 issue—it’s a successfully implemented component of the overarching regulatory framework known as DSCSA—the Drug Supply Chain Security Act of 2013. Our annual update of the topic is 

—then and now—has been analyzing the complete pharmaceutical supply chain: the flow of product, the flow of information, and the flow of funds from purchasers, all with the manufacturer at one end of the chain, the patient at the other, and multifarious intermediaries in between. With the upheaval caused by the current pandemic, the focus on supply chain activity has exploded; a large portion of the US population is now learning how the healthcare products they routinely pick up at the corner pharmacy get there (or don’t, as the case may be).

Big secret: this editor was learning many of those details of industry practices as each issue came out. That education was spurred along by a wide range of industry experts who took the time to explain what they were doing, and how it impacted the business of pharmaceutical distribution. For that I am profoundly grateful.

It was a cliché when the publication started, but it is still more or less true: the role of distribution and supply chain management in pharmaceuticals is woefully under-recognized, even as its importance rises in today’s world. Under new leadership, 

 will continue this educational and informational role.

One door closes; another one opens…

There are centrifugal and centripetal forces carrying along the drive toward pharma traceability today: forces that bring the pharma supply chain into a more united and cohesive effort (centripetal); forces that are sending supply chain participants in different directions (centrifugal). And while much of the US industry is continuing a drive toward compliance with the Drug Supply Chain Security Act (DSCSA), passed in 2013 with a highly unusual 10-year implementation schedule, technology—and the vendors advancing technology—have continued to evolve, creating new opportunities for tracking the movement of pharmaceuticals throughout healthcare, or for preventing counterfeiting of drugs (one of the original objectives of creating DSCSA).

Industry progress had been advancing, if by fits and starts, when the global pandemic hit. Now, many industry experts expect that deadlines for various compliance milestones will be delayed by a year or more; the 2023 deadline for full DSCSA compliance is already expected to move to 2024.

Here are a few of the unifying (“centripetal”) forces:

●The successful establishment of the Partnership for DSCSA Governance (PDG),

 a voluntary collaboration to bring manufacturers, distributors, pharmacies and health systems together to solve end-to-end supply chain issues with DSCSA compliance. PDG originated with some of the same people who founded the Pharmaceutical Distribution Security Alliance (PDSA) as DSCSA itself was being written. PDG is up and running, and various members are engaged in workgroups for interoperability and credentialing, among other goals.

●The heavy lifting to meet DSCSA requirements for verifying returned product.

 DSCSA rules mandated that US wholesalers be able to verify the authenticity of returned product before it is put back into distribution; the technical means to do this has come to be called a Verification Router Service (VRS). As it turns out, creating a VRS that enables (in a perfect world) any possessor of returned product to verify its source is an exercise in full DSCSA compliance, at a micro level. In effect, VRS has become a pilot study for DSCSA functionality.

Here are some diversifying (“centrifugal”) forces:

●Hospital dispensing and the return of RFID.

 The pharmacies at health systems are finding increased value in their own identification and tracking processes inside their systems, and in some cases are using radio-frequency identification (RFID) technology to do so. This creates the prospect of one system for DSCSA compliance and another for internal tracking—a potentially duplicative and divisive element of overall traceability.

●The advancement of traceability in other industries.

 Both before and during the 2013-2023 rollout of DSCSA, other industries, notably food and consumer goods, have been advancing their own traceability initiatives. In some cases, advances in those industries will help move pharma traceability forward; in other cases, it creates potential conflict. The role of the GS1 global organization (which sets standards for, among other things, barcoding of commercial goods) will be key in keeping various players more or less on the same page. Another aspect of this is that some key pharma-traceability vendors are now eying these other industries (good for their business plans, bad for pharma if the focus shifts away).

Pharma traceability is a global undertaking—not only for manufacturers outside the US sending products into the US, but also for traceability and authentication efforts in 40 or more countries for their own internal markets. In the past year, much attention was paid to Russia, whose traceability systems are now coming online, and attracted the efforts of traceability vendors in the US and Europe. Brazil is also in this about-to-start-up mode. The European Union’s Falsified Medicines Directive (FMD) is now operational, to varying degrees of success, throughout the EU.

With fingers crossed, wholesalers in the US are readying their systems for verifying the authenticity of product returns, which represent several billion dollars’ worth of inventory for them. This regulatory milestone was to have been enforced in November 2019, but FDA delayed it for a year. According to industry sources, efforts were proceeding smoothly for industry readiness at the beginning of this year—then the pandemic struck. Getting a VRS system operational cannot be performed remotely; distribution center workers need training and equipment, but travel restrictions have slowed down the ability to do that gearing up. The hope is for a further delay at FDA (who, it is expected, will have its own difficulties in sending out inspectors come November).

The technical issues, to a large degree, appear to have been solved. Based on developmental work by the Healthcare Distribution Alliance (HDA), wholesalers and manufacturers have settled on a system where traceability vendors create a lookup directory (LD) of their clients’ product information, and the vendors ensure that their various repositories can communicate with each other. Then, when a request for validating a product return comes into one vendor, that LD routes the request to whichever vendor has the relevant manufacturer information. Ultimately, the request shows up at the appropriate manufacturer, who verifies the product identity. All of this needs to occur within milliseconds.

Wholesalers have had two tasks over the past couple years: setting up a VRS for the products they handle; and getting manufacturers onboard to be able to respond to a request. The VRS interoperability project was also an element of the FDA DSCSA Pilot Program (see below); technology vendor Rfxcel worked with an engineering-consulting firm Vantage Solutions, to run the interoperability tests, demonstrating the feasibility of the routing network. Work is proceeding on both tasks during the course of this year.

The process of verifying saleable returns involves a part of the pharma supply chain: wholesalers, manufacturers, and solution providers who offer a VRS system. Broader DSCSA compliance will bring in retail pharmacies and health systems—and they have a nominal November deadline for being able to verify the authenticity of incoming pharma products. According to industry sources, progress has been made at many health systems, but is lagging at chain pharmacies, and is nearly hopelessly lagging at independent pharmacies (some of whom lack basic internet access). A possible workaround is that the wholesalers supplying independent pharmacies will be able to provide both verification and reporting capabilities to their pharmacy clients—but the success of that remains to be seen.

The DSCSA law mandated that FDA perform pilot studies of technology and business processes, and that effort kicked off in the spring of 2019 with applications being submitted, and a final list of projects issued by FDA last summer (see Fig. 1).

The list was quite diverse in goals and capabilities. FDA intentionally sought out broad representation, including large and small pharma manufacturers, a variety of solution providers, and various pharmacies. (The involvement of chain pharmacies, except for participants in group discussions, was notably missing.) The creation of PDG was itself a “pilot;” and there were some projects in the works already, such as the HDA VRS effort, which got merged into the Rfxcel-sponsored FDA pilot.

All of these projects were to have been completed in early 2020 and reports filed with FDA. Some of the companies involved provided a report for public viewing; some issued a press release. Pharmaceutical Commerce obtained several of these reports and news releases; at presstime, some of these projects were to be part of an online presentation by PDG (who might then archive them for public viewing). At some point, FDA is supposed to issue a comprehensive report on lessons learned.

●Cardinal Health ran a study of DSCSA information it had received from manufacturers, contract manufacturers, repackagers (including its own business unit), other wholesalers. The goal was to evaluate how closely all participants are adhering to EPCIS standards (which have been developed by the GS1 organization). Results were troubling: only 28% of records could be accepted as is.

For the most part, the exceptions were resolvable, involving such details as events out of sequence (i.e., a shipment notification being dated before a commissioning notification); inappropriate GLNs (Global Location Number—another GS1 standard); or missing data.

“Given the volume of products involved and in order to avoid interruptions in patient care, it is important that there be ways to distinguish these commercially routine exceptions (transmission and aggregation errors) between established trading partners from true suspect or illegitimate product situations,” concluded the report.

●KitCheck demonstrated its compatibility with DSCSA goals in the hospital-tracking systems it has already commercialized. The company provides RFID tags which are applied to incoming pharmaceutical products at hospital pharmacies, as well as a cloud-based data repository for the data. Hospitals can then track the drugs as they move through the facility, including those that are included in med-surg “trays” (kits). According to the company, being able to track those kitted drugs enables hospitals to retain them longer (as opposed to throwing away all the contents of the kit, once it was opened), as well as to track its inventories more closely.

The company has also had notable success in helping hospital pharmacies control the dispensation of controlled substances. Some 500 hospitals are already using a KitCheck system.

●The IBM/KPMG/Merck/Walmart group, which has called itself the “Pharmaceutical Utility Network (PhUN)," demonstrated that blockchain technology can be used to record product movements, and to initiate an alert for an investigation or recall. The testing did not, however, involve actual product movements. IBM is heavily involved in developing Ethereum-based blockchain projects, and has run what is called the IBM Food Trust for providing traceability in food production.

●The MediLedger project, which involved that blockchain company, plus 25 organizations in the pharma supply chain (members of a consortium that has been coordinating blockchain development since 2017). Among other things, the pilot demonstrated the feasibility of MediLedger’s Ethereum-based technology to exchange messages; the company calculates that a full-blown, national system will require at least 856 transactions/s to be communicated.

●The BruinChain project, spearheaded by another blockchain company, LedgerDomain, demonstrated the ability of its HyperLedger-based blockchain technology to track deliveries into the pharmacies of the UCLA Health System. This was one of the few actual pilot projects, in the sense of performing real-world testing (the project involved tracking deliveries of Spinraza, a Biogen product). Among other findings, the project revealed that “white-bagging” (the shipment of a drug from a manufacturer directly to a healthcare provider, rather than distribution from a wholesaler to a pharmacy) complicates product tracking: since a wholesaler wasn’t involved, someone else (the manufacturer or the manufacturer’s agent) needs to document transaction history.

What FDA will make of all this is unclear, which is not to say that the pilot projects were a wasted exercise. Many of the conversations that occurred among project participants are a preparation for how the industry will deal with the march to full DSCSA compliance. It is notable that several of them involved blockchain technology, which holds the promise of providing “immutable” records of transactions—a goal of DSCSA; the general drift of blockchain discussions is that private blockchain networks will eventually be set up, and then the challenge becomes how these networks will interoperate.

Whether the future of pharma traceability is blockchain-based or not, the ability to identify who is requesting or providing transaction information will need to be established. That, in turn, points to the “governance” of the networks—and that is where PDG comes in. The eventual goal is to be able to verify “authorized trading partners” among whom information can be exchanged.

These pilots are by no means the totality of what has transpired in the past year in DSCSA compliance. LSpedia, a solution provider, has just announced the newest generation of its technology. TraceLink has announced the introduction of the Opus Network, an architecture that is intended to allow third-party developers to offer software to make use of the extensive data it holds for its hundreds of pharma clients. Multiple vendors, including Rfxcel, Movilitas, Covectra, Adents, Antares and others have VRS offerings. Axway and VAI have partnered with LSpedia on a VRS offering. Sovereign Pharmaceuticals, a Fort Worth, TX, contract manufacturer, has installed an open-source traceability system, Qua4rtet, working with Vantage Solutions to implement.

Meanwhile, business is growing for ancillary software to manage the installed base of traceability systems. Excellis Health is offering an alert management system, to enable DSCSA messages (such as saleable return queries) to be tracked to resolution. Gateway Checker Corp. is offering a same-named product to perform conformance checking on EPCIS messages. LedgerDomain has expanded its data repository, and provided a smartphone-based interface, to check product details based on FDA records.

Overall, the outlook for industry to meet DSCSA deadlines (whether by 2023 or 2024) looks positive—but much more work remains to be done.

Steady progress is occurring in the global effort to track pharmaceutical distribution, even as new technical and business opportunities appear

Spinning up the pharma traceability wheel

Within the next 30 months, some US pharmaceutical wholesalers are planning to be traceability-ready in accordance with the Drug Supply Chain Security Act (DSCSA). To some that might sound like plenty of time. To those of us with years of experience in the industry, it sounds more like a sprint to the finish line rather than a pleasant jog.

Even now, the US drug supply network is struggling with electronic, interoperable traceability without alignment around a common set of application standards. A report from the Office of Inspector General of HHS, while evaluating the current status of DSCSA traceability, recommended that “FDA offer educational outreach to trading partners about required drug product tracing information and data standardization guidelines.” [1]

There is a broadly (but not universally) accepted standard for trading-data communication: the EPCIS standard of the GS1 organization. But to ensure that EPCIS is being effectively employed by pharma trading partners, and the software vendors serving them, a testing protocol has been developed and sanctioned by GS1. This article will explain its justification and application.

Drug traceability captures transaction events as individualized medicine containers and their parent cases travel from manufacturer to the point of dispense. By aggregating these events, regulators can understand location history, who has handled the product and for what purpose. FDA wants to ensure that only legitimate, uniquely identified product moves through the supply chain and that it is being handled by legitimate, licensed, and authorized trading partners.

To attain electronic, interoperable pharmaceutical traceability, each member of the drug supply network must connect and exchange information sufficient to enable supply chain transparency and integrity.

In fulfilling more than 25,000 prescription SKUs, thousands of companies around the world must establish an electronic, interoperable dialog. There is no shortage of connections to be made. On the production side there are as many as 5,000 connections necessary to network packagers, drug manufacturers, repackagers, and third-party logistics providers assuming each of the 2,000 producers needs on average 2 -3 connections per manufacturer. The largest wholesale distributors connect to as many as 500 drug producers which means for just the “Big Three”, 1,500 connections are needed. The remaining 90+ wholesale distributors are likely to, on average, need to connect to six drug producers, increasing the number of connections by an additional 500. Therefore, an estimated 2,000 connections are necessary for drug producers to connect inbound to distribution. Finally, each point of distribution must connect and communicate with more than 200,000 healthcare providers, which is likely to require an additional 2,000 connections.

As complexity increases and information exchange becomes more important, it is necessary for standards to be formed to ensure that products, processes, and procedures fit together and interoperate -- and that there is a “universal language” of sorts to relay this information.

When it is critical for businesses to communicate effectively, standards matter. Standards allow different businesses to act in harmony enabling uniformity, reliability, accuracy, and precision. By adhering to standards, companies and organizations can work together to build products like cars, computers, and cell phones, or securely exchange personal, patient, product, and financial information. Without well-defined requirements and strict adherence to standards, we struggle to establish interoperability and information exchange. To achieve accurate, rapid, robust, reliable connectivity with minimal errors, conformance to accepted standards is essential.

Application standards are necessary to trace uniquely identified medicine containers as they move from initial packaging through the warehouse and then to the point of drug dispensation. The entities and their location involved with each drug transaction from initial introduction into commerce to the point of dispense must be captured, stored in immutable records, and be easily understood.

Fortunately, tracking, capturing, and accessing this data is made possible by the Electronic Product Code Information Services (EPCIS), a GS1 standard which enables trading partners to represent and share information about the physical movement and status of products as they travel throughout the supply chain. It is essentially a common language that knows the details of each transaction (the what, where, when, and why) and facilitates a shared view of physical objects within, and between, enterprises.

Since EPCIS is in use around the world to address a variety of business needs across many industries, application specific standards are necessary to tailor EPCIS to suit a specific purpose. The GS1 Healthcare US working group, made up of 50+ companies representing a cross-section of the industry, published EPCIS application standards governing DSCSA traceability in 2016. Within months, each of the major US wholesalers published EPCIS onboarding guides based on the GS1 DSCSA application standards. Impediments to change, such as re-validating an existing system, are a barrier to standards adoption. However, things are changing; most new deployments are specifying EPCIS 1.2, a prerequisite for DSCSA traceability conformance.

Although the drug manufacturer is responsible for product packaging and drug-transaction data accuracy, it is the drug wholesaler that feels the impact of standards non-conformance. As noted, the wholesalers face the daunting task of having to onboard and receive drug traceability information from hundreds of manufacturers.

“A high-percent of the files we see for the first time have EPCIS conformance issues,” says Jeff Denton, VP of Supply Chain at AmerisourceBergen. “Avoidable issues require a significant amount of human resources to identify, communicate, resolve, and retest. It simply isn’t scalable for wholesalers to troubleshoot the standards conformance issues that conformance testing could address ahead of time.”

One EPCIS solution provider wrote us recently “If we are not currently perfectly compliant with GS1 standards, we are extremely close.”

As Ken Traub, an EPCIS visionary and the inspiration for our conformance tools once remarked: “There is no such thing as ‘almost’ standards compliant; it either is or it is not.”

Recognizing the need to establish unambiguous DSCSA conformance, GS1 established a conformance testing certification program to identify non-conformances and improve DSCSA traceability and interoperability. Requirements were developed for a reliable, scalable, and robust testing and certification service.

Rigorous testing benchmarks were established by the GS1 US working group to ensure common assessments of similarly constructed traceability scenarios. A certification program was launched to certify independent companies, like Gateway Checker, as a Conformance Testing Service.

As a result, opinions and creative interpretations can be supplanted with facts and an unambiguous assessment. Unbiased third parties can objectively test and evaluate conformance to GS1 standards for DSCSA traceability.

Conformance testing ensures implementation consistency among trading partners, aligns data structures, enables common data definitions, and avoids deployment delays.

As a supply integrity consultant assisting with the deployment of serialization systems, I see first-hand the time and effort wasted on bridging the standards conformance gaps. With full DSCSA standards compliance, different solution providers could generate or receive EPCIS messages in a “connect compatible” manner. All required elements would be structured correctly. All necessary content requirements would be mutually understood by the parties. The missing element to assure drug supply interoperability is a testing and certification system that can unambiguously assure message conformance to the DSCSA application standards.

In 2017 I assembled a team of traceability experts and industry practitioners to transform the 35,000 words published in the DSCSA Traceability application standards into a conformance assurance system. Our efforts resulted in a rules-based conformance assessment platform that became known as Gateway Checker. Our conformance assurance service was tested and certified by GS1 as a Conformance Testing Service in 2019. Other conformance testing services are available. [2]

The Gateway Checker conformance testing system relies on hundreds of rules to examine the structure and content of EPCIS messages. Gateway identifies each non-conformance, provides a description of the issue and links to the offended section of the application standard. The system renders an ambiguous response; pass or fail. Passing EPCIS messages can be certified to one of 16 GS1 pharmaceutical traceability scenarios.

With Gateway Checker, proficient analysts can easily self-diagnose compliance gaps within their submitted EPCIS messages. “The Gateway Conformance Testing application provides unparalleled insight into traceability requirements,” said Vasudeva Saladi, Solution Architect, AmerisourceBergen. “It productively identified issues and highlighted what was needed to remedy them.” Late last year, within just a few weeks’ time, AmerisourceBergen became the first company to become Gateway Certified and attain the industry’s first GS1 Trust Mark.

Not following standards can result in spectacular failures. Who can forget the $125 million Mars orbiter crashing into the planet because an engineering team used English measurement standards instead of the metric system?

DSCSA nonconformance costs are not the type of dramatic failure that panics the industry into change. Rather, it is a steady stream of lost time, excessive resource expense, and unnecessary rework that stretches onboarding projects from weeks to months. Custom-coded connectivity maps resist change and hinder adaptability to new technology and evolving regulatory requirements. Aggregate all the wasted time and effort into a bucket and the industry impact is in the millions of dollars. We know there are significant gaps in drug traceability standards adoption. We have tested more than 100 industry files from different applications and found very few are able to fully conform.

There are substantial benefits from attaining DSCSA Gateway Certification. We have seen first time connections succeed and fully satisfying validation requirements without issue. Imagine the time saved, costs avoided, and confidence established when systems connect and communicate, first time, every time. We are in this together. US drug traceability will advance when manufacturers, contract packagers, repackagers, regulators, and EPCIS solution providers understand that conformance to standards matters! To this end, Gateway Checker is offering a complimentary readiness assessment of an EPCIS file: go to 

https://gatewaychecker.com/readiness-assessment/

 and use the code PharmaComJune20 to begin the process.

https://oig.hhs.gov/oei/reports/oei-05-17-00460.pdf

https://www.gs1us.org/what-we-do/partners/find-gs1-us-solution-partner/find-rx-epcis-conformance-tester

Gary Lerner, founder of Gateway Checker, is an accomplished architect of supply integrity solutions. An expert in item-level serialization, Gary has developed successful supply chain and channel integrity solutions for nearly 100 leading brands around the world, serving the needs of pharmaceutical, medical device, packaged food, electronics and apparel manufacturers.

How to ensure conformance to EPCIS standards in drug traceability

Chester “Chip” Davis was appointed to the role of president and CEO of the Healthcare Distribution Alliance in March 2020—and, as noted below, was immediately thrown into the fire of the Covid-19 pandemic. Previously, he was president and CEO of another prominent pharmaceutical organization, the Assn. for Accessible Medicines (AAM, formerly the Generic Pharmaceutical Assn.) The springboard to these national roles was his time as a corporate affairs executive at AstraZeneca, which also led to a role at the Pharmaceutical Research and Manufacturers of America (PhRMA). His educational background is the University of Delaware, and a JD from the University of Baltimore School of Law.

 connected with Mr. Davis in early May; here’s what he had to say.

1.Taking over the reins of the trade association of US pharma distributors, in the middle of the worst global pandemic of the past century, has certainly been a trial by fire. What can you tell us about the actions of your member companies during this period? What has surprised you, and what do you wish were functioning better in pharma distribution?

I have been in the office since the first week of March, and it has been quite an experience to say the least.

In the immediate term, the pandemic has demonstrated the unique expertise of HDA member companies. As it relates to disaster planning, distributors bring significant experience to bear, with business continuity plans to ensure medicines and supplies are delivered safely, efficiently and reliably. While our members compete with one another, where appropriate, they have worked together to meet demand—within relevant legal boundaries. It’s been ‘all hands on deck.’

Thinking about the overall situation, I see four areas where our members have risen to the occasion: First, they have continued to ensure that the pharmaceutical supply chain ultimately enables patients to be treated. This involves managing strong relationships with 1,300+ drug manufacturers to deliver healthcare products to more than 180,000 healthcare providers and pharmacies daily.

Second, our members have been committed to their employees. From the smallest to the largest companies, they have been going above and beyond to take care of their employees and ensure a safe workplace. Third, it is important to note all this has been done while maintaining regulatory compliance, even while regulations have been shifting around from one state to another as authorities responded to the crisis.

Fourth—and this is not necessarily unique to the Covid-19 pandemic—is the recognition of our members as logistics experts. They have been in constant dialogue with local, state and federal public health agencies, working to move products to ‘hot spots’ during a very dynamic situation.

Behind the scenes, we have been working with the Federal Emergency Management Agency (FEMA), which put together a working group, the Supply Chain Task Force, that meets daily. Similarly, HDA and our membership also have been in close coordination with the Food and Drug Administration (FDA), Drug Enforcement Administration, other federal agencies as well as state governments to address regulatory barriers that slow down the supply chain and ultimately limit patient access to medicines.

2. Stepping back now from the current situation, what are your aspirations for where to take HDA in the coming years?

From the moment I joined the pharmaceutical sector, in the mid-1990s, I have been fascinated by the inner workings of this industry. It has met challenges such as developing treatments for HIV, or hepatitis C, as well as making access affordable through generic products and biosimilars. What I did not have as much visibility into were the critical connection points between the manufacturers and the hundreds of thousands of dispensers and providers. Our members are the ‘vital link’ of the pharmaceutical supply chain.

In the wake of this pandemic, more attention will be paid to supply chain issues. In my discussions with HDA member executives, what was clear to me is that the voice of our companies needs to be better heard on policy issues. Distributors are the ‘unsung heroes’ of the pharmaceutical supply chain, and in general, the value of our services in healthcare needs to be better understood. That will be a key goal of mine in this role.

3. Tell us about the membership of HDA. Who are they, and what are their common interests, as represented by the structure of the association?

HDA represents primary pharmaceutical distributors. By this, I mean companies that predominantly buy medicines and healthcare products directly from manufacturers, inventory and warehouse those products, and deliver them to pharmacies, hospitals and other sites of care nationwide. Our members distribute some 92% of all drugs in the nation.

Counted among our 35 members are large Fortune 500 companies; regional, family-owned and small businesses supporting their communities; and specialty distributors delivering intricate treatments, all united in their goal to ensure the safest and most efficient supply chain for our ultimate customer, the patient. The scope of HDA members’ core and value-added services (studied last year through our ‘Role of Distributors in the US Health Care Industry’ report) cannot be understated. Our members are critical trading partners that provide value to the overall healthcare ecosystem.

It is worth noting that HDA membership also reflects the breadth of the supply chain, including branded, generic and over-the-counter manufacturers; third-party service providers; and international companies. Given our shared interest in supply chain security, in 2018, HDA also expanded its expertise by incorporating the Pharmaceutical Cargo Security Coalition into our membership.

4. Before the Covid-19 epidemic, there was the opioid-abuse epidemic, which has by no means disappeared. Are HDA activities to address this epidemic ongoing? 

First, it is important to recognize some context of distributors’ role as it relates to controlled substances. Distributors are one part of a complex supply chain—they do not manufacture, prescribe, dispense or drive demand for medicines, but are focused on moving medications, prescribed and ordered by regulated providers and pharmacies, to where they are needed as swiftly and efficiently as possible. Recognition that there was a crisis in the making came slowly, and all parts of the healthcare ecosystem—providers, pharmacies and distributors, as well as manufacturers, are committed to bringing an end to the epidemic.

Now, with the benefit of hindsight, we can see that more education and better treatment options need to be developed. In that context, HDA is a founding member of Allied Against Opioid Abuse (AAOA), which recently celebrated its second anniversary. AAOA now has 20 partner organizations—ranging from the American Pharmacists Assn. to the National Consumers League and many others. By combining our voices and networks, we have been able to reach more than 1 million people across the country to educate them about the proactive steps they can take to prevent prescription opioid abuse and misuse. Over 40 educational and information resources have been produced, helping healthcare providers and consumers to understand prescription safety and abuse prevention.

Some states are looking to pass legislation to fund opioid treatment or abuse prevention, both of which are obviously critically important. But the funding mechanisms, some of which are based on taxing opioid distribution and increasing licensure fees within certain states, need to be looked at closely as they may jeopardize patient access to, and increase costs of, pain medications.

5. Historically, HDA has preferred uniform national standards for regulations, such as licensure or operational requirements. But there has been a trend—increasingly as a result of the pandemic, it seems—for states to go their own way. How much of a problem is this for HDA? Are there any more-challenging situations across the national landscape?

Historically, the supply chain for national drug distribution has been highly regulated at the federal level. The debate over the Drug Supply Chain Security Act is an obvious example; HDA was highly concerned that the prospect of 50 states adopting their own standards would have had a major negative impact on the national supply chain.

Now, rising drug costs have put the entire supply chain on the radar again. States feel the need to be more actively engaged on policy issues. We are prepared to participate in that discussion. HDA members are being negatively portrayed as mysterious “middlemen” affecting drug pricing, but the reality is that our percentage of ultimate drug costs is small—distributors actually save the healthcare ecosystem billions on an annual basis.

Another important issue in the national debate is drug importation, for which HDA is on record as having a harmful effect on the security and integrity of the pharmaceutical supply chain, and for which the economic benefits are very much in doubt.

6. Implementation of the Drug Supply Chain Security Act (DSCSA) is pretty active today among HDA members. How well will your members be prepared for the full enactment scheduled for 2023?

DSCSA is a fairly complex technical and policy issue, so HDA needs to remain, as it has been to date, centrally involved as a leader in its implementation. We are encouraged by the establishment of the Partnership for DSCSA Governance, on which HDA participates as a board member and in workgroups. Interoperability of information systems will become more important going forward, and PDG is a productive forum for resolving those issues.

7. What does all this mean to you personally? Is your involvement in pharma distribution more than a professional one?

Since the beginning of my career in the pharmaceutical industry, I have been interested in the intersection of medicine and public policy, not just in the US, but globally. To bring this closer to home, I have three children, a son and two daughters; my son has Crohn’s disease and my older daughter is on the autism spectrum. I don’t have to leave my house to witness firsthand the value of innovation in medicine, and its impact on patients, their families and society overall. So for me, this commitment is both professional and personal.

In my career, I’ve been able to see firsthand the value of both branded and generic drugs. HDA distributors, specifically, have a challenging, important responsibility of making sure the right medicines get to the right patients at the right time—safely, reliably and efficiently. I’m very gratified to be in a position where I can represent my members’ interests and communicate the value they provide to the American public.

Pharmaceutical Commerce - June 2020

2020 Pharma Traceability Vendor Directory

One door closes; another one opens…

Spinning up the pharma traceability wheel

How to ensure conformance to EPCIS standards in drug traceability

A conversation with Chip Davis, HDA