I attended the Healthcare Distribution Management Association (HDMA) Track and Trace Seminar held in Crystal City, VA on November 11-13, 2013. I was particularly interested in the session called “Distributor Case Studies and Updates”, as were a lot of other people. The speakers were:
- Chris J. Anderson, Director, Quality Systems, Cardinal Health, Inc.
- Steve Tadevich, Director, Product Serialization Technologies, McKesson Corporation
- Heather Zenk, PharmD, Vice President, Business Integration, AmerisourceBergen Corporation
Each speaker gave a brief presentation about their current serialization and pedigree programs before taking questions as a panel. As you would expect, all of the preparation these companies have done up to this point has been aimed squarely at the California pedigree law which would have gone into effect for wholesalers in California in mid-2016. But, as I explained in my last essay, all speakers at that event—including these three—spoke from the perspective that the DQSA would be passed soon. Anderson, Tadevich and Zenk all acknowledged that the passage of Federal Drug Quality and Security Act of 2013 (DQSA) would have an impact on the direction of their projects.
U.S. wholesale distributors have had to deal with the “patchwork” of state pedigree laws more than any other segment because all of those laws were aimed directly at their business model. Most national-scope wholesale distributors have a system in place to meet the Florida-type of pedigree law and given the significant difference with the California law (serialization), they were all also working on different systems to meet that law. With the passage of the DQSA of 2013 all of those pedigree laws became inoperative. These companies can now stop what they were doing, take a step back and re-evaluate all of the functionality of these existing systems to figure out what parts might be reclaimed for use to meet the new nationwide DQSA requirements, and which parts can be happily shut down and discarded.
Chances are, systems based on the GS1 Drug Pedigree Messaging Standard (DPMS) will fall into that last category. The designers of the DQSA intentionally avoided the type of requirements that were included in the Florida and California pedigree laws and which dictated the design of DPMS. I don’t think it was as easy to do that as some might have thought, but they were successful, and DPMS can now be retired.
Or not. In theory, DPMS could be considered a viable way to format the initial lot-based electronic transX (transaction information, transaction history and transaction statement) by January 1, 2015 since most wholesale distributors and some chain pharmacies and some manufacturers already have DPMS-based systems. But given the distaste for DPMS I suspect companies will want to ditch those solutions at the first opportunity. We’ll just have to see what is officially proposed to the FDA by supply chain companies and then by the FDA.
WHOLESALE DISTRIBUTORS TAKING AGGREGATION DATA BEFORE 2023? NO WAY
Normally I always recommend that manufacturers listen to their customers when it comes to their serialization and AIDC requirements, but when I heard all three of the wholesale distributor representatives at the HDMA Track & Trace Seminar say they were going to ask manufacturers to provide aggregation data during the first phase of the DQSA deployment I changed my mind—at least on that note. Don’t listen to them…unless they tell you that in your next Distribution Services Agreement (DSA) negotiation with them.
The McKesson representative was the first to say it, and when he did a cheer literally went up from a group of solution providers in the room. The representatives from both Cardinal Health and AmerisourceBergen then agreed with him, but keep in mind, these folks were still working on projects designed to meet the California requirements. Their minds were still filled with day-to-day testing of aggregation data collected and provided to them by their suppliers. I’m sure they had been hoping that the DQSA would pass, but until it did—one week after the HDMA event—they were heads-down focused on California requirements, which indirectly dictated the need for wholesalers to receive that kind of data.
But the DQSA does not require manufacturers to supply aggregation data—directly or indirectly—until late 2023. Does it make sense for wholesalers to receive that data before they begin testing their serialization compliance systems sometime in 2020 at the earliest? No.
In fact, when it comes to the point where a manufacturer could actually provide them with aggregation data I predict these same wholesale distributors will not even be willing to accept it, let alone ask for it, until the time they begin preparing their systems for late 2023 when aggregation data will finally be a necessity.
Very soon now, U.S. wholesalers will be so immersed in problems related to the pressing new regulatory requirements that they won’t even be able to remember what aggregation is, and that’s because serial numbers are not needed in any transX data until phase 2 in 10 years. If serial numbers are not required in transX documents you can bet they won’t be there, and in that case, there is no value to wholesalers in dealing with aggregation data. It is a waste of time and resources that no wholesaler can justify. I predict that wholesaler talk of aggregation data will stop as soon as those in financial control of their projects better understand the differences between the old (California) and new (Federal) requirements.
BUT, MANUFACTURERS SHOULD STILL COLLECT AGGREGATION DATA!
But at the same time I am making that prediction I also predict that most manufacturers will want to generate aggregation data for their own internal purposes as soon as they begin shipping serialized product prior to December 2017. That’s because they can then use inference when they ship cases and pallets of their own products to various customers, and in doing so they can know exactly which unit-level serial numbers are being shipped to each customer in every shipment. That will help them know exactly what happened to a given unit when they later investigate a suspicious drug through a request from a trading partner or the FDA.
This still isn’t a regulatory requirement (before late 2023 anyway), but it will benefit the manufacturer by providing documentation that could help expedite investigations of potentially illegitimate activities. These include serial number-based chargeback tracking and authorizations, returns verification, diversion monitoring, etc. In short, most of the non-compliance benefits of serialization come to the manufacturer from knowing exactly which unit serial number went to which customer. And that’s only going to work if the manufacturer captures the aggregation data for themselves. If you must spend the money to put a unique serial number on every drug package, you might as well get the full benefits by spending the money to capture who received which of those serial numbers.
Disagree? Leave a comment below.