HDA Delivers Home Run To Record-Breaking Audience

HDA logoLast week the Healthcare Distribution Alliance (HDA) (formerly the HDMA) held their annual Traceability Seminar in Washington DC.  More than 450 people registered, shattering the previous record set just last year (see “Aggregation –> Chargeback Accuracy –> ROI”) and nearly equaling the record set in March for their 2016 Distribution Management Conference and Expo (see “HDMA DMC Serves Sizzling Steak With A Small Side Of Snake Oil”).  This year’s event was executed nearly flawlessly with presentations by the FDA and wholesale distributors, and various panel discussions with thought-leaders from drug manufacturers, 3PLs, contract manufacturers, wholesale distributors, repackages, hospitals and chain pharmacies.  Here are some of my notes from the event.


Dr. Connie Jung, Acting Associate Director for Policy and Communications, Office of Drug Security, Integrity and Recalls with the FDA spoke about what the FDA has been doing lately regarding the implementation of the Drug Supply Chain Security Act (DSCSA).  She provided a DSCSA implementation update that contained little more than what was provided last month at the FDA’s DSCSA Public Meeting (see “FDA Forfeits Opportunity To Guide Industry”) and at the GS1 Connect event in June (see ”FDA Speaks At GS1 Connect”). 

The one thing I noted that might be new was that Dr. Jung seemed to imply that trading partners downstream of the drug manufacturer may also be able to take advantage of grandfathering.  That is, maybe they will have their own grandfathering allowance that is specific to their segment.  The text of the DSCSA offers a grandfathering clause only to drug manufacturers, leaving the question of how downstream trading partners should handle those products that manufacturer shipped under grandfathering.  When Dr. Jung was referring to the staggered deadlines for repackagers (2018), distributors (2019) and dispensers (2020) to begin buying and selling only products that contain the product identifier, she said “…unless they are grandfathered…”.  We won’t know exactly what she might have been implying until we see the draft guidance on grandfathering from the FDA…but who knows when that will be?  All she said was the same thing she said back in June:  “soon”.  (See “Who Is Being Harmed By Four Overdue FDA DSCSA Guidances?”, “FDA Forfeits Opportunity To Guide Industry” and “Is The FDA Intentionally Delaying Publication Of The Overdue DSCSA Guidance?”.)

During the Q&A Dr. Jung confirmed that compounded drugs are exempt from the DSCSA and that label changes solely to incorporate the DSCSA product identifier can be filed on the drug manufacturer’s annual report.  She responded to a question about what level of drug packaging must be serialized:  “…each pill?”  the questioner asked.  No, the smallest saleable unit sold to the pharmacy.  When asked if a linear barcode was still necessary she said, yes, but the packaging level may determine that some packages will have both the linear and the DSCSA 2D barcodes, but some will have only one of them.  When asked about the FDA’s plans for piloting she pointed out that the FDA does not have any funding for pilots.  The FDA will place heavy emphasis on industry partner pilots.  Someone from a charitable organization asked if their shipments are exempt?  Dr. Jung pointed out that shipments between affiliated locations of the organization are the only shipments related to them that are exempt from passing transaction data.


Certainly the most important sessions of the event were the three that covered the outcomes of the HDA’s saleable returns pilots.  Late last year the HDA announced plans to analyze nine different approaches to meeting the DSCSA requirement for wholesale distributors to verify saleable returned drugs using the Standardized Numerical Identifier (SNI) (see “Anatomy Of An FDA SNI”) after November 27 of 2019 (see “Wholesaler Confusion Over DSCSA Aggregation Explained” and “Aggregation –> Chargeback Accuracy –> ROI”).  Here is a list of the planned activities:

Analytic Approach Methods to Verify Saleable Returns
Live Pilot ·         Manufacturer sends to wholesale distributor product identifiers for only the units purchased by the wholesale distributor.

·         Central repository: All manufacturers send data to a central database, automatically verified.

·         Distributors scan product on outbound

·         Verification Router Service – router to link to the databases

Desktop Pilot ·         Verification service: Each manufacturer has its own database, check external database automatically, connect through an interface.

·         Portal: Each manufacturer has its own — manual without a verification service

Whitepaper “Pilot” ·         Manufacturer sends to all wholesale distributors product identifiers for all units (not just the product identifiers for the units purchased by the wholesale distributor)

·         Distributors scan product on inbound  

·         Distributors manually confirm with manufacturers at time of return via phone or email

The three sessions covered the three different approaches to their analysis:  Pilots of the most promising methods, write a whitepaper to discuss the least promising, and do a desktop pilot of those that are in-between.  Announced at the conference, the HDA has published a pictorial guide to the nine different pilots they conducted. 

The big news is that the pilot team announced the conclusions of the pilots project.  They concluded that there is no single industry-wide solution to achieve compliance with the wholesale distributor’s 2019 DSCSA saleable returns requirements.  They concluded that serialized data exchange amongst all trading partners utilizing GS1’s Electronic Product Code Information Services (EPCIS) is not feasible by 2019.  They also concluded that the implementation of industry-wide aggregation is not feasible for meeting the 2019 deadline for verification of serialized saleable returns.  Based on these conclusions, they chose three different approaches to meeting those requirements:

  1. Manufacturer sends to wholesale distributor product identifiers for only the units purchased by the wholesale distributor,
  2. Internet-based real-time verification router service: wholesale distributor query is routed to the appropriate manufacturer database, and
  3. A manual process will be necessary, in some cases.

Drug manufacturers may choose any combination of numbers 1 and 2 for their products, but all manufacturers will need to plan on number 3 for verification when all else fails.  Of course, the manual processes will have to be used only in the rare instance that the other two approaches cannot be used.

Buried in the middle of the conference was the announcement of the availability of a very detailed “executive summary” of the results of a readiness survey conducted by the HDA Research Foundation.  Make sure you download a copy here.  It is similar to the annual surveys I have done over the last three years (sponsored by Frequentz) (see “The 2016 RxTrace U.S. Pharma Traceability Survey, Sponsored by Frequentz, Final Report” for the most recent one), but this one is certainly more accurate because they were able to control who submitted responses. 

There are lots of very interesting results in this report.  I’ll leave you with just one for now.  They found that 66% of drug manufacturer currently plan to capture aggregation data for their shipments, while 25% said they are waiting for FDA guidance to determine if they will aggregate or not.  Hmmm.  That last group should read my essay “Aggregation –> Chargeback Accuracy –> ROI” and they should listen in on my webinar tomorrow.  I hope to write more about the results documented by the HDA in a future RxTrace essay.  Watch for that.

Overall the annual HDA Traceability Seminar is the best event for coverage of the DSCSA.  Other than subscribing to RxTrace and reading it regularly, there is no better way to keep informed.  Remember that next year.