HDA forges ahead with ‘Saleable Returns’ initiative

A year ago, the Healthcare Distribution Alliance announced results of an internal work group addressing the problem of saleable returns. Now, at the just-concluded HDA Traceability Seminar (Washington, DC; Nov. 8-10), it is taking the wraps off a Verification Router Service (VRS) and inviting manufacturers to jump onboard.

There are numerous milestone deadlines leading to full compliance with the Drug Supply Chain Security Act (DSCSA) in 2023, and even though FDA has delayed a key one that was to have gone into effect this month, drug manufacturers, distributors and dispensers are planning ahead. For wholesalers, a key deadline is November 2019, when they are supposed to be able to verify the authenticity of pharmaceutical products that have been returned to them from retailers. It is a common practice for wholesalers to put some of these products (which have not expired, and which are undamaged) back into commercial distribution.

DSCSA, of course, affects all pharma products going into commercial distribution in the US; the problem of returns is a relatively minor one, affecting roughly 2-3% of the market. Yet HDA analysis has shown that some 60 million units are returned annually, not only representing $5-10 billion in value, but also a massive tracking process to validate the thousands of returns that hit each wholesaler’s distribution centers daily. (The reverse logistics business in pharma is its own industry sector.)

Last year, the HDA workgroup evaluated nine potential setups for meeting the DSCSA requirement that returns be authenticated before re-entering commercial distribution. The setup that seems to work best is to have a so-called Verification Router Service—a number (preferably more than one) of online databases where a wholesaler could send a verification query, and get the query routed to the originating manufacturer’s own repository (aka the “responder” to the query) of commissioned product identifiers, per DSCSA requirement.

The workgroup has finalized a business requirements document that sets out the general expectations of how the industry is going to go forward. The VRS will be managed by a governance committee (yet to be set up) that ensures that only legitimate wholesalers can participate. The repository will contain the online locations of manufacturers’ own data repositories, and a “phone book” of which repositories have which product identifiers. Queries need to include four items:

• Global Trade Item Number (GTIN)
• Serial number
• Lot number
• Expiration date

The GTIN itself includes an identifier of the originating manufacturer and other details; also, the VRS will provide the requestor’s ID and query details to the responder. It is worth noting that full DSCSA information, including intermediate transfers of ownership of the product, are *not* r reported on either side of the exchange.

The need to have a VRS intermediary between the requesters and responders arises from M&A activity among manufacturers or other marketing authorization holders, products that are manufactured by one company but marketed by another, and the many cases where a contract packager or 3PL is holding the product identification information on behalf of the originator of the product. Generics and branded products need to be handled equally easily. The all-electronic verification needs to happen in milliseconds to keep wholesalers’ own operations running smoothly.

Going into 2018, the governance committee is to be set up, and testing of the service to begin. Interested parties can obtain the VRS business requirements document by contacting Justine Freisleben at HDA: jfreisleben@hda.org.