U.S. Drug Wholesale Distributors Provide Direction To Manufacturers

Providing "direction"Over the next few years, the U.S. drug wholesale distributors are going to start dictating their specific requirements related to the Drug Supply Chain Security Act (DSCSA) to their suppliers.  For the “Big 3” U.S. wholesale distributors, those suppliers happen to be nearly every drug manufacturer who markets drugs in the United States.  The “Big 3” include McKesson, AmerisourceBergen and Cardinal Health, which together distribute about 85% of all drugs that pass through the domestic supply chain.

Of course, each segment has a different set of DSCSA requirements and as a product moves down the supply chain, the next company to receive it must have total confidence that they have what they need to be able to sell or dispense that product without violating the law in some way.  Right now each segment is wrapped up in figuring out what they will need to do to meet their DSCSA requirements, but not necessarily in understanding exactly what the other segments will face in meeting theirs.

Given the intricacies of the DSCSA requirements, it makes sense that wholesale distributors will need to provide specific direction to drug manufacturers so they know what will be required of them as DSCSA deadlines approach.  That is, what the wholesale distributors will need from the manufacturers so that the wholesale distributors will be confident that they will remain compliant with the law as they distribute each manufacturer’s product.

Fortunately for drug manufacturers, each wholesale distributor is not likely to mandate standalone, incompatible requirements.  At least we hope not.  So far they appear to working together through their industry association, the Healthcare Distribution Management Association (HDMA) to come up with a common set of requirements.

HDMA is currently conducting a saleable returns pilot that will focus on wholesale distributors’ requirements for verifying returns for saleable goods in 2019 and the requirements for the entire supply chain by 2023 (see Pharmaceutical Commerce, “Collaboration key to a healthy supply chain in 2016“).  You can bet the outcome of this pilot will result in some very specific requirements for manufacturers, particularly regarding serial number aggregation and verification.  You can hear an update on the progress of that pilot at the upcoming HDMA Distribution Management Conference and Expo (DMC) in San Antonio, Texas on March 7 – 9.  I hope to see you there.


A few months ago Cardinal Health posted a new message to drug manufacturers on their website that explains their interpretation of several DSCSA topics related to future deadlines.  These include serialization, verification and the electronic formatting of the DSCSA transaction documentation they must receive from manufacturers.  The information is very high level, but watch for a lot more specifics as the November 27, 2017 serialization deadline gets a little closer.

Cardinal’s message includes a reference to the HDMA’s returns pilot and a recommendation for manufacturers to participate in it to “…help determine which potential [wholesaler returns verification] solutions make the most sense from an efficiency standpoint for all stakeholders.” 


Late last month McKesson sent a message to their suppliers about upcoming DSCSA deadlines and requirements.  I can’t provide you with a link to it because they have not made it public, but because it is not marked “confidential”, and it carries some significance to solution providers and others who would likely not have received it, I will quote from it.

The message includes some requirements that go beyond any that the other wholesale distributors have made.  McKesson says that the critical manufacturer requirements they are providing are “…to allow McKesson to be fully DSCSA compliant as we near the [approaching DSCSA timelines]”.  (See what I mean?  It’s about their ability to be compliant.)

Probably the most significant requirements discussed in the message are related to the use of GS1’s Electronic Product Code Information Services (EPCIS) standard.  McKesson draws a distinct line for its use.  They do not want lot-level data provided to them in EPCIS format.  They expect any lot-level DSCSA information to be exchanged using HDMA’s DSCSA-enabled EDI ASN 856 until November 27, 2023 (see also “Is An ASN Really The Best Way to Pass Lot-Based DSCSA Transaction Data?“).

So much for the GS1 US Healthcare‘s current version of their DSCSA guidance (see “The GS1 Healthcare US Guidance For DSCSA, Vsn 1.1“).  It was aimed at doing just what McKesson says it does not expect.

But McKesson does expect to exchange serialized DSCSA transaction data using GS1’s EPCIS standard.  Make sure you fully understand the difference between “lot-level DSCSA transaction data” and “serialized DSCSA transaction data” so you will understand the significance of what McKesson is telling you (see “The Coming Transition To Serialized Data“).  Fortunately GS1 US Healthcare is aggressively working on version 1.2 which will provide guidance on the use of GS1 standards to meet the serialized tracing requirements of the DSCSA.  I’ll have more to say about that effort once they publish.

Next, the McKesson message discusses aggregation, also known as serial number-based packaging hierarchy (see “Wholesaler Confusion Over DSCSA Aggregation Explained” and “Aggregation –> Chargeback Accuracy –> ROI“).  When serialized DSCSA transaction data is exchanged, McKesson expects it to include aggregation data.  This is big news, because despite hinting from all of the “Big-3”, this appears to be the first time it has been put so definitively in an official written message by any of them.

Not only does McKesson expect aggregation between unit and cases, they also expect cases to be aggregated to pallets or containers, with the pallet or container being marked with an “HDMA SSCC label format (they mean a GS1 SSCC).

Finally, the McKesson message also mentions the current HDMA saleable returns pilot(s).  It says,

“Suppliers should note HDMA pilots are underway to identify the most efficient way [for wholesale distributors] to perform [verifications of serialized saleable returns] which are required by law.  The ability to have the supplier’s serialized data available enabling these verifications by November 27, 2019 will be important.  Once these pilots have been conducted, McKesson will likely be providing further definition of our requirements to allow us to verify serialized saleable returns.”


I haven’t seen any DSCSA-related messages from ABC in a long time, but that doesn’t mean they haven’t sent any.  I rely on members of the pharma supply chain to pass on non-confidential messages that are not posted publicly and perhaps I just haven’t received any.  But both AmerisourceBergen and Cardinal Health generally take a follower approach to actions like these taken by the leader, McKesson.  They like to call themselves “fast-followers”.  And that’s not a bad position to take since McKesson always seems to put a lot of forethought into their actions.  McKesson is often a good leader to follow.

The outcome of the HDMA pilot(s?) is likely to provide all three of the big wholesale distributors with the evidence they need to back more firm mandates for aggregation prior to their November 2019 deadline, even though the DSCSA itself does not mandate its use by that time.  Watch for a more rigid requirements coming from all three shortly after the pilot final report is published.  Right now it appears that will be sometime this summer.

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