DQSA: The U.S. Pharma Supply Chain Must Organize, Or Risk Failure

iStock_000021010135XSmallIf there is one overriding lesson exposed by my essays last week it is that the companies in the U.S. pharmaceutical supply chain must quickly organize to work out technology and process issues that stand in the way of an efficient implementation of phase 1 of Title II of the Drug Quality and Security Act of 2013 (see “DQSA: Getting To Electronic Transaction Data Exchange” and “DQSA: Will U.S. Pharma Distributors Mandate Aggregation Data In Phase 1?”).  Title II of the DQSA is the Drug Supply Chain Security Act (DSCSA).

The law gives the FDA one year to publish guidance containing standards for use by companies in the supply chain for the exchange of transaction information, transaction histories and transaction statements.  Here is the somewhat contorted language from the bill:


(A) IN GENERAL- The Secretary shall, in consultation with other appropriate Federal officials, manufacturers, repackagers, wholesale distributors, dispensers, and other pharmaceutical distribution supply chain stakeholders, issue a draft guidance document that establishes standards for the interoperable exchange of transaction information, transaction history, and transaction statements, in paper or electronic format, for compliance with this subsection and subsections (b), (c), (d), and (e). In establishing such standards, the Secretary shall consider the feasibility of establishing standardized documentation to be used by members of the pharmaceutical distribution supply chain to convey the transaction information, transaction history, and transaction statement to the subsequent purchaser of a product and to facilitate the exchange of lot level data. The standards established under this paragraph shall take into consideration the standards established under section 505D and shall comply with a form and format developed by a widely recognized international standards development organization.

(B) PUBLIC INPUT- Prior to issuing the draft guidance under subparagraph (A), the Secretary shall gather comments and information from stakeholders and maintain such comments and information in a public docket for at least 60 days prior to issuing such guidance.

(C) PUBLICATION- The Secretary shall publish the standards established under subparagraph (A) not later than 1 year after the date of enactment of the Drug Supply Chain Security Act.”

As you can see from this extract, the FDA must gather comments and information from stakeholders prior to publishing the first draft of that guidance.  My recommendation for the industry to organize is not for the purpose of blocking individuals or individual companies from providing comments to the FDA.  Rather, it is in recognition that the FDA is going to need a lot of help to accomplish their mandate in only one year and an organized effort may be the best way to quickly bring about clarity.  There are lots of companies who have knowledge about the needed technologies and processes that go well beyond the expertise currently found in the FDA.

It may come as a bit of a surprise to some, but the FDA has never needed to deal with real-world, day-to-day supply chain security and operational issues.  In fact, this will be the first time the agency has been given sweeping oversight of the drug supply chain.  Up to this point, their powers mostly ended with the manufacturer.  Each of the 50 states licensed and regulated wholesalers and pharmacies, including the operation of the supply chain between them.  And so the agency currently lacks not only overall supply chain expertise, but it also lacks the technology expertise necessary to select the kind of standards the new law requires them to establish.

The logical solution is for the industry to help provide the necessary expertise on both counts by working with the FDA, either closely or at a distance (through publishing white papers perhaps).  Either way, the representation must be balanced between large and small organizations, and across the various segments of the supply chain to minimize any perception of bias.  The way I see it, there is time for only one run at this.  That one run has to be optimal.  After all, the industry must begin using the standards established through this effort in only 13 month (supposedly anyway, see my essay “The Flaw That Must Be Addressed in H.R. 3204, The Drug Quality and Security Act”.)


Frankly, no, that would be a mistake.  For the development of the standards that the industry aligned with to meet the various state pedigree laws over the last decade the industry was willing to relinquish leadership to GS1 Healthcare US.  That organization organized and facilitated regular meetings and even more frequent conference calls to help the industry figure out what it wanted to do and how those things could be done with GS1 standards.  Many of the large manufacturers and wholesalers participated.  Even some of the large chain pharmacies participated for a while.

The problem with GS1 US organizing and leading the effort going forward is that they really can’t “lead”, they can only “facilitate”.  I have no doubt that the right foundational standards to be used over the next 10 years will include multiple GS1 standards.  Maybe GS1 standards will even play a central role, but GS1 US does not know what the industry wants or needs so they are incapable of leading such an effort with speed, efficiency and accuracy.  GS1 Healthcare US should definitely be a participant in the effort, but not as a leader.


I’ve always thought a consortium between the primary industry associations in the U.S. pharma supply chain made the most sense to kickoff and lead this kind of effort, much like the European Federation of Pharmaceutical Industries and Associations (EFPIA) has done in Europe over the last decade.  And I have felt that way since 2004, not just since the passage of the DQSA.  But now that the DQSA is real and nationwide, I hope something like that will emerge.

I have not been a part of the Pharmaceutical Distribution Security Alliance (PDSA) but it seems like that organization has the right mix of associations and individual companies in its membership, although its original purpose was to pass a Federal serialization and track & trace law through lobbying Congress.  Could it be transformed into more of an industry technology mapping organization?  I don’t know, but from my outsider’s view it seems like the opportunity is large and this organization seems to have a significant head start.  I also know that the member organizations have employees with the necessary business and technical expertise, along with GS1 US, to come to the right conclusions.

The only obvious alternative would be for individual supply chain companies to send their ideas in writing to the FDA directly.  But without a technically consistent central thread, that approach could really confuse the FDA and that could easily result in inefficient regulations (again).  It seems like his would be the worst-case scenario.  Let’s do everything we can to avoid the doomsday scenario I laid out in my essay “How Smooth Will Industry Deployment of the ePedigree Laws Be? Take a Good Look At Healthcare.gov”.

Do you have any ideas for ensuring this next 12 months ends with logical, achievable guidance from the FDA?  Please, leave a comment below and tell us about it.


4 thoughts on “DQSA: The U.S. Pharma Supply Chain Must Organize, Or Risk Failure”

  1. HI Dirk, Congrats!! The time is too short for the size of industry and number of stake holders. So every day should count. Since you welcomed ideas and participation from every one including individuals i am encouraged to write this to you.
    I have a patent pending solution for authentication which can make the life of every one easy. I want to explore how this can be discussed in confidence with you and also take your view on how to suggest this to FDA or any standards organization. Since I don’t obviously want the patent process to be violated it will require some form of exchange of NDA, my lawyer suggests.
    Do let me know if we can work together on this?


  2. Fully agree with you that industry associations should cooperate. Pharma is becoming more interested in devices to track and manage their specialty product in patients’ hands. Beyond the obvious associations, other associations can lend weight.
    The Dental Trade Alliance (anesthetic and many other dental products are pharmaceuticals) has been active in UDI and plans to be active in the pharma tracking rulemaking.
    HIMS, mHIMSS and ATA members have interests in how to populate EMRs with product data in institutions and from outside using AIDC. Their members are often smaller venture backed companies.
    I hope to engage NAVC. MDMA is also a valuable resource for the smaller firms. The NGOs and agencies which are engaged in supporting medication adherence can also add emphasis. NBS can help harmonize.

    1. For companies that are approved NDA holder and/or legal manufacturer, that outsource prescription drug, is it correct that as approved NDA holder, you are considered “manufacturer” and therefore, the transaction begins with you as manufacturer, and you are not required to provide history of the outsource mfg???

  3. Hi Nap! I have spoken to you on the phone in the past about UDI! thank you for your comment regarding dental industry! The new law requires that transaction history be provided by manufacturer, do we need to include transaction history including our outsource manufacturers if we are NDA holder? if we are not NDA holder (e.g. high fluoride prescription products without NDA approval), but legal mfg, do we need to include transaction history including our outsource manufacturers? My understanding and interpretation is that in both these cases, we are NOT required to provide information on outsource mfg because we are NDA holder and/or legal mfg. Do you have any insight based on dental industry discussions around this topic and/or did DTA submit comments to the docket about outsource mfg and inclusion in transaction history. We missed the comment period, but may want to comment on draft guidance when released. Let me know if DTA has had any input. Thanks! Shari Myszka, 651-736-6955

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