The HDMA Supply Chain Product Transaction Scenarios For DSCSA

HDMA DSCSA ScenariosBack in the middle of the summer the Healthcare Distribution Management Association (HDMA), the industry association for the primary healthcare distributors in the United States, published on their website a very valuable resource for companies that must meet the U.S. Drug Supply Chain Security Act (DSCSA) beginning in January.  This new resource is tucked away in the HDMA’s “Issues in Distribution”, “Pharmaceutical Traceability” page under the “Technical/Standards” heading [look for “Supply Chain Product Transaction Scenarios: Drug Supply Chain Security Act Implementation (2014)”].  It is free for anyone to download and I highly recommend that you do.  (And while you’re at it, check out some of the other resources available on that page.)

HDMA has been a leader in developing high quality guidance documents that aim to help ensure that data exchange technical solutions in the U.S. pharma supply chain are interoperable.  They cannot and do not enforce their guidance, but the larger wholesale distributors often do that for them.  After all, the HDMA is primarily made up of those same organizations and supply chain-wide data exchange technology standardization benefits those organizations more than any other because, by definition, they are always in the center of the supply chain.  I have written in the past about their work.  See:

This latest guidance is a series of scenarios, depicted graphically and in tabular form, which show which trading partners must provide DSCSA Transaction Information (TI), Transaction History (TH) and Transaction Statements (TS)—including which specific data elements must be supplied—in more than a dozen different types of supply chain scenarios.  These include:

  1. Direct Purchase to a Dispenser
  2. Direct Purchase to a 340B Contract Pharmacy or Health System
  3. Direct Purchase to Dispenser’s Contact Repackager
  4. Direct Purchase Through Manufacturer’s 3PL
  5. Distributor as 3PL for Dispenser
  6. Exclusive Distributor to Distributor 1 to Dispenser
  7. Exclusive Distributor to Distributor 1 to Distributor 2 to Dispenser
  8. Multiple Distributors
  9. Repackager to Distributor 1 to Dispenser
  10. Distributor 1 to Repackager to Distributor 2 to Dispenser
  11. Drop Shipment: Manufacturer to Dispenser, Facilitated by Distributor
  12. Drop Shipment: Repackager to Dispenser, Facilitated by Distributor
  13. Drop Shipment: Distributor 1 to Dispenser, Facilitated by Distributor 2

Clearly, an incredible amount of work went into figuring out exactly how the TI, TH and TS should be provided to the next party in the supply chain.  Every type of participant in the supply chain is depicted in these scenarios somewhere and that is what makes this resource so valuable.


The document—quite rightly, and just like my writings—includes a disclaimer that the material is not legal advice and that the information may change based on guidance published in the future by the FDA, and that each company must make their own business decisions about passing and accepting TI, TH and TS among its trading partners.  It encourages you to consult your legal counsel and your trading partners for further implementation guidance.  Right on.  That’s true of everything you read in RxTrace as well, including this next section, because neither the HDMA nor I are offering you legal advice, and our interpretations might be flawed in some way.

For example.  My interpretation of the DSCSA text is different than the HDMA’s when it comes to the passing of TH—Transaction History—by exclusive distributors, and repackagers who buy directly from manufacturers (scenario numbers 6, 7, 9 and 12 in the list above).  According to the HDMA’s tables (Slides 12, 14, 18 and 24 in their PDF), and graphics (Slides 11, 13, 17 and 23), indicate that the exclusive distributors and/or the repackagers do not need to provide their customer with the TH.  My interpretation of the DSCSA indicates that these companies MUST provide TH to their customers in these scenarios.  One of us is wrong.

It appears that the HDMA is treating Exclusive Distributors and Repackagers just like Manufacturers.  In fact, neither is included in the definition of a DSCSA manufacturer [see Section 582(10)].

Interestingly, manufacturers are theoretically not even exempt from providing TH to their customers [see DSCSA Section 582(b)(1)(A)(i)], but because Transaction History is defined to extend back the manufacturer of a product, the only time a manufacturer would need to provide TH is if they were acting, for that product, as a wholesale distributor or some other type of non-manufacturer role.  So the HDMA and I agree that the true manufacturer can ignore the requirement to pass TH to their customers.

Let’s take a closer look at just one of these scenarios and see which interpretation might be right.  The easiest example to dissect is number 6, “Exclusive Distributor to Distributor 1 to Dispenser”.  This can be depicted as:

Manufacturer -> Exclusive Distributor -> Wholesale Distributor -> Dispenser


Manf -> XDist -> WDist -> Disp

The DSCSA defines an “exclusive distributor” [see Section 582(6)] as “…the wholesale distributor that directly purchased the product from the manufacturer and is the sole distributor of that manufacturer’s product to a subsequent repackager, wholesale distributor, or dispenser”.  So by definition, an exclusive distributor is a wholesale distributor and they are also in the class of wholesale distributor that purchases directly from the manufacturer.  The main distinguishing characteristic is that they are the sole distributor of that manufacturer’s product.

Now let’s take a look at the Wholesale Distributor Product Tracing section of the DSCSA where it refers to exclusive distributors by name (see my highlight), Section 582(c)(1)(A)(ii)(I)(aa).  That section reads:

If the wholesale distributor purchased a product directly from the manufacturer, the exclusive distributor of the manufacturer, or a repackager that purchased directly from the manufacturer, then prior to, or at the time of, each transaction in which the wholesale distributor transfers ownership of a product, the wholesale distributor shall provide to the subsequent purchaser…” a transaction statement and transaction history, and transaction information.

I jumped out of the quotation there because things get long and complicated in this area.  The main thing to note is that the TH and TI requirement are subject to another clause that the TI and TH in these instances (known as “direct purchases”) do not need to include the lot numbers, the initial transaction date or the initial date from the manufacturer.

Now, the exclusive distributor (“XDist” in my crude sequence above), by definition, only buys directly from the manufacturer (Manf), so, by this clause, their purchases fall into the category of a “direct purchases”.  But so do the wholesale distributor in our sequence (WDist), because they are buying from the XDist.  By the DSCSA clause above, these are both “direct purchases”.  By virtue of that classification, they are not required to provide their customer with the lot numbers, the initial transaction date or the initial date from the manufacturer.

But notice that the WDist does not purchase from the manufacturer (remember, the XDist is defined as a wholesale distributor, not a manufacturer), so it cannot make use of the exemption from including the initial date from the XDist, because the XDist is not a manufacturer.

But that’s it.  That’s all the DSCSA says about exclusive distributors, so where is their exemption from providing TH?  There isn’t any.  They are required to provide it, just like any other direct purchaser.

The folks who drew up the HDMA guidance may have been confused by the fact that this scenario includes two sequential purchases that fall into the category of “direct purchases”—a very unique sequence, I’ll grant you—but nothing in the text would enable you to stretch that into granting full “manufacturer” status on an exclusive distributor.  They are still a DSCSA wholesale distributor and they must comply with the DSCSA wholesale distributor direct purchaser requirements.

The same flawed logic seems to be in force in the other exclusive distributor and repackager scenarios I listed above.


I don’t mean to disparage the quality or the value of the HDMA guidance here.  These few scenarios are not very common and the difference in our interpretations is not huge.  These are the only differences in interpretation I have found so far.

The error in interpretation (by the HDMA, or by me) is an example of just how complex the DSCSA product tracing requirements are—particularly in the wholesale distributor section [Section 582(c)]—but it is not impossible to figure out.  If you need some inexpensive assistance to help you figure out how the DSCSA applies in your particular situation, I recommend my Book, “The Drug Supply Chain Security Act Explained”, by Dirk Rodgers, available here.