HDMA DMC Serves Sizzling Steak With A Small Side Of Snake Oil

iStock_000043324250_SmallerAccording to the HDMA, their Distribution Management Conference and Expo in San Antonio last week broke the attendance record at more than 500 attendees, but for the life of me, I can’t figure out why the number wasn’t double that amount.  When you compare the value you receive by attending this (or any) HDMA event with what you receive from any third-party event, well, there isn’t any comparison.  HDMA serves sizzling steak to their soggy puffed rice.  The reason is not just the quality of the speakers.  In fact, as “speakers”, they really aren’t any better at speaking than any other group of people, but it is who they are and what they know that makes the difference.  And just as important, who else is in the audience that makes these events so special.  It’s not just what is going on in the sessions, but it is who you meet and what you learn in the hallways and networking breaks between sessions.  I’ve said this before (see “Terminology: Track and Trace, and Pedigree”).

In past years, this event was more focused on providing the opportunity for trade managers from manufacturers to get together with their counterparts in the wholesale distributors, plus a little something for the regulatory departments.  And it still does that well.  But recently HDMA has added a full track of sessions aimed at meeting the U.S. Drug Supply Chain Security Act (DSCSA).  I still remember when they only had one or two sessions.  Now you can attend a session that focuses on some aspect of meeting that regulation for the entire duration of the conference.  How is this different from their “Traceability” conference held in November each year?  It is similar, but I contend that it is important to attend both events if you want to keep up with what is happening in the supply chain.  Many people do.


This year the HDMA did something different.  In previous years, both the DMC and the Traceability event had a single session called “DSCSA Wholesaler Perspectives” where regulatory and technology representatives from the “Big-3” wholesale distributors would explain their current thinking, plans and requirements for their suppliers to allow them to meet the DSCSA.  The problem was, in this single session, whichever company went first would provide good detail, but those that followed felt so conscious of the fact that they would just repeat the same information that they said less.  Usually the third company on the podium just said something like “What they said”, and the session would end.

This year they gave each of the “Big-3” wholesalers a separate session and paired each one with one or two of the non-“Big-3” wholesaler members of HDMA.  So you were able to hear a full hour of perspectives from all of the big, and some of the smaller companies.  The speakers still felt subconscious about repeating a lot of information, but with this approach, the audience was better able to see the differences in DSCSA approach, priority and scope of each company.

Several speakers pointed out that they do not intend to require anything different from their suppliers than what the other wholesalers require.  And for the most part, this appeared to be true, although if it were really true, then why don’t they jointly publish a complete guideline through HDMA?  Instead, HDMA publishes EDI and barcode guidance but no overall DSCSA guidelines that are all you need to properly ship product to their members.  You still need to get the specifications from each of the wholesalers to do it right, and that’s where you are likely to find differences.

Generally, all wholesalers appear to allow you to continue sending the DSCSA Transaction Information (TI), Transaction History (TH), if any, and Transaction Statement (TS) via EDI ASNs.  Each of the “Big-3” wholesalers said that they are now receiving 100% of these DSCSA transaction documents electronically via ASNs.  McKesson even said that they did not receive a single paper transaction after January 1, 2015.  That’s impressive.


The problem came when each company talked about what they would like to see happen in the next few years to help them meet their November 2019 DSCSA  saleable returns verification requirement.  On the one hand, they all emphasized the importance of the pilots that the HDMA is just now kicking off to help determine which of 9 different approaches are the least costly and most efficient.  The results of those pilots should be ready to publish in the fall so they can present them at the HDMA Traceability conference in November.  But even after talking about the importance of those pilots, each of the “Big-3” said they want companies to provide them with aggregation data after 2017 so they can build up an inventory of valid serial numbers that pass through their receiving and shipping departments.  That way after November 2019 they will have multiple ways to try to verify saleable returns before they need to resort to phone calls and emails.  I kept thinking, “what happened to those pilots?

This desire to get the aggregation data from drug manufacturers also leads to a serious confusion that is left in the minds of attendees.  Most speakers said they expected manufacturers to provide serialization data via GS1’s EPCIS interface standard for products that have the DSCSA product identifier on them.  That sounds like they expect drug manufacturers to switch from passing the necessary TI/TH/TS documents in EDI ASNs, to passing it in EPCIS events as soon as the manufacturer starts serializing.  And this is where it all fell apart.

McKesson got it right and Cardinal Health appeared to agree with them.  McKesson’s position was explained in their letter to suppliers back in January (see “U.S. Drug Wholesale Distributors Provide Direction To Manufacturers”) and their presentation at the HDMA DMC followed that letter.  They recognize that the transaction documentation necessary for DSCSA compliance through November of 2023 is lot-based.  You can add serial numbers if you want to, but that is optional and the addition must not change any of the requirements the DSCSA places on the lot-based TI/TH/TS.

McKesson is very happy with the level of stability that their suppliers have achieved in sending them the lot-based transaction documentation via ASNs, so in their words, “Don’t break it”.  That is, let’s not spend the next six years getting every drug manufacturer to switch from lot-based ASNs to serialized ASNs, or EPCIS events and then debugging those messages just to remain in compliance with the lot-based regulatory requirements.  So they are asking for companies not to touch the existing lot-based ASNs.  They are fine as they are.  They are necessary for DSCSA compliance through November 2023.  Leave them alone.

So, if you want to send McKesson and Cardinal Health aggregation data and perhaps other EPCIS data (but mostly just those aggregation events) when you start shipping serialized product to them, you need to add that as a separate data exchange.  One way to understand what it happening here is to refer to this serialized data (EPCIS events) as being sent “in parallel” with the existing compliance data (which is currently in your ASNs).  It would be in parallel because there would be two different data feeds that contain information about the same products, although each feed would contain a different “view” of the products.  The current ASN feed provides the data necessary to remain in compliance with the lot-based part of the DSCSA, and the EPCIS feed would provide the data necessary for the wholesaler to comply with their 2019 saleable returns verification problem.

But this parallel data exchange kept getting muddled in the messages each of the wholesalers were conveying.  I am confident that McKesson expects a parallel data feed, and I am reasonable confident that Cardinal Health does too, but AmerisourceBergen (ABC) offered a different message.

It appears that ABC prefers everyone to switch from ASNs to EPCIS events as soon as you begin shipping serialized data so you can avoid this “parallel” data feed.  Since most everyone believes the post-2023 supply chain will meet the 2023 DSCSA serialization requirements with EPCIS events, ABC appears to be saying, everyone might as well start as soon as possible.  This is snake oil in my opinion.  Watch out.

The problem is, even though many people agree that the EPCIS standard will play a central role in the post-2023 supply chain, we don’t yet know exactly how EPCIS events will be structured or exchanged.  Will they be passed between trading partners, replacing the ASN data exchange we have today, or will that exchange be discarded in favor of a central repository or some other semi-centralized architecture?  These are things that the FDA is tasked with investigating with the assistance of supply chain stakeholders over the next five to seven years.  It is unknowable at this point.

By switching from today’s stable DSCSA lot-based compliance through ASNs to DSCSA lot-based compliance through EPCIS events the two companies involved in each exchange would need to go through a complex testing and on-boarding process to ensure that no shipment arrives without the necessary compliant lot-based data.  Yes, EPCIS version 1.1 has lot-based capabilities, but those capabilities would only be useful until November of 2023 when everything you finally got stabilized again will be thrown out and you would need to go through all the stability testing again for DSCSA serialization-based data exchange.

By my count, that’s one extra conversion of the DSCSA data feed.  Is it really worth it to avoid a parallel data exchange?  McKesson and Cardinal Health apparently don’t think so.  Only ABC encourages it.  In my view, that’s ABC’s “blank check” talking.  The extra conversion would hit each drug manufacturer once, but ABC would end up reliving the conversion pain over and over again until every one of their suppliers were converted and stable.  This conversion won’t be anywhere near as easy as getting everyone setup and properly using ASNs either.  It will be very painful and very costly.  The smart thing for the other wholesalers to do is let ABC go through the pain and expense of all that converting and debugging throughout the supply chain so when it is time to switch to full serialization compliance in November of 2023, their suppliers will already possess some EPCIS knowledge that ABC “paid” for in getting everyone up on EPCIS for lot-based compliance.

The question is, will ABC require all suppliers to switch to EPCIS in the next three years, or will they just allow it for those who already know what they are doing.  It’s unclear right now but ABC said they will be publishing lots of information about their DSCSA program in the coming months, including papers and webinars.  We shouldn’t have long to wait.  If they make it optional, unless you too have a “blank check” from your management, I suggest you follow the McKesson approach.


Here’s an example of how great the HDMA events are.  After the “Wholesaler Perspectives” session featuring ABC was over, lunch was served.  I filled my plate and sat down at a table with four or five people I did not know.  I soon became engaged in a conversation about the wholesale distributors and their different sessions with the woman seated to my left who was from a drug manufacturer.  It quickly became apparent that we shared many of the same opinions about the muddled messaging coming from each of them about this parallel data feed and other things.  We began finishing each other’s sentences.  She and I were thinking the same things and we had a great conversation.

It turns out, my random lunch-mate was a long-time RxTrace reader.  She had clearly been educated about the many issues and the implications of many potential solutions in the supply chain, at least in part, by reading my essays over the years.  In my opinion, she graduated from “RxTrace school” with honors as someone who can see through the fog and pick out the important things when she sees them, even when they are obscured, unintentionally or otherwise.  She is ready for the serialization future.  Like many others out there, she received that education by reading every last RxTrace essay, right down to the last sentence.  Like you just did.