DSCSA: The U.S. Pharma Supply Chain Must Organize, Or Risk Failure, Again

iStock_000021010135XSmallA couple of days before President Obama signed the DQSA legislation back in 2013 I published an RxTrace essay that looked at what was going to be necessary in the next year from the FDA and the industry (see “DQSA: The U.S. Pharma Supply Chain Must Organize, Or Risk Failure“).  The initial standards necessary at that time were for data exchange, and the FDA had one year to come up with them.  My essay was about the need for the industry to work with the FDA to come up with the standards that would work.  The FDA didn’t have the expertise or the knowledge of how the supply chain operated and so I felt it was imperative for the industry to help them out.

Fast forward to today.  Rather than data exchange standards, the FDA is facing figuring out how the Enhanced Drug Distribution Security (EDDS) system will work in 2023.  Nothing else has changed.  So in the essay below, just replace the words “data exchange” with “2023” and the same message is valid.

I’m taking a little time off, so enjoy this old but still valid essay from November 25, 2013.

DQSA: The U.S. Pharma Supply Chain Must Organize, Or Risk Failure

If there is one overriding lesson exposed by my essays last week it is that the companies in the U.S. pharmaceutical supply chain must quickly organize to work out technology and process issues that stand in the way of an efficient implementation of phase 1 of Title II of the Drug Quality and Security Act of 2013 (see “DQSA: Getting To Electronic Transaction Data Exchange” and “DQSA: Will U.S. Pharma Distributors Mandate Aggregation Data In Phase 1?”).  Title II of the DQSA is the Drug Supply Chain Security Act (DSCSA).

The law gives the FDA one year to publish guidance containing standards for use by companies in the supply chain for the exchange of transaction information, transaction histories and transaction statements.  Here is the somewhat contorted language from the bill:


(A) IN GENERAL- The Secretary shall, in consultation with other appropriate Federal officials, manufacturers, repackagers, wholesale distributors, dispensers, and other pharmaceutical distribution supply chain stakeholders, issue a draft guidance document that establishes standards for the interoperable exchange of transaction information, transaction history, and transaction statements, in paper or electronic format, for compliance with this subsection and subsections (b), (c), (d), and (e). In establishing such standards, the Secretary shall consider the feasibility of establishing standardized documentation to be used by members of the pharmaceutical distribution supply chain to convey the transaction information, transaction history, and transaction statement to the subsequent purchaser of a product and to facilitate the exchange of lot level data. The standards established under this paragraph shall take into consideration the standards established under section 505D and shall comply with a form and format developed by a widely recognized international standards development organization.

(B) PUBLIC INPUT- Prior to issuing the draft guidance under subparagraph (A), the Secretary shall gather comments and information from stakeholders and maintain such comments and information in a public docket for at least 60 days prior to issuing such guidance.

(C) PUBLICATION- The Secretary shall publish the standards established under subparagraph (A) not later than 1 year after the date of enactment of the Drug Supply Chain Security Act.”

As you can see from this extract, the FDA must gather comments and information from stakeholders prior to publishing the first draft of that guidance.  My recommendation for the industry to organize is not for the purpose of blocking individuals or individual companies from providing comments to the FDA.  Rather, it is in recognition that the FDA is going to need a lot of help to accomplish their mandate in only one year and an organized effort may be the best way to quickly bring about clarity.  There are lots of companies who have knowledge about the needed technologies and processes that go well beyond the expertise currently found in the FDA.

It may come as a bit of a surprise to some, but the FDA has never needed to deal with real-world, day-to-day supply chain security and operational issues.  In fact, this will be the first time the agency has been given sweeping oversight of the drug supply chain.  Up to this point, their powers mostly ended with the manufacturer.  Each of the 50 states licensed and regulated wholesalers and pharmacies, including the operation of the supply chain between them.  And so the agency currently lacks not only overall supply chain expertise, but it also lacks the technology expertise necessary to select the kind of standards the new law requires them to establish.

The logical solution is for the industry to help provide the necessary expertise on both counts by working with the FDA, either closely or at a distance (through publishing white papers perhaps).  Either way, the representation must be balanced between large and small organizations, and across the various segments of the supply chain to minimize any perception of bias.  The way I see it, there is time for only one run at this.  That one run has to be optimal.  After all, the industry must begin using the standards established through this effort in only 13 month (supposedly anyway, see my essay “The Flaw That Must Be Addressed in H.R. 3204, The Drug Quality and Security Act”.)


Frankly, no, that would be a mistake.  For the development of the standards that the industry aligned with to meet the various state pedigree laws over the last decade the industry was willing to relinquish leadership to GS1 Healthcare US.  That organization organized and facilitated regular meetings and even more frequent conference calls to help the industry figure out what it wanted to do and how those things could be done with GS1 standards.  Many of the large manufacturers and wholesalers participated.  Even some of the large chain pharmacies participated for a while.

The problem with GS1 US organizing and leading the effort going forward is that they really can’t “lead”, they can only “facilitate”.  I have no doubt that the right foundational standards to be used over the next 10 years will include multiple GS1 standards.  Maybe GS1 standards will even play a central role, but GS1 US does not know what the industry wants or needs so they are incapable of leading such an effort with speed, efficiency and accuracy.  GS1 Healthcare US should definitely be a participant in the effort, but not as a leader.


I’ve always thought a consortium between the primary industry associations in the U.S. pharma supply chain made the most sense to kickoff and lead this kind of effort, much like the European Federation of Pharmaceutical Industries and Associations(EFPIA) has done in Europe over the last decade.  And I have felt that way since 2004, not just since the passage of the DQSA.  But now that the DQSA is real and nationwide, I hope something like that will emerge.

I have not been a part of the Pharmaceutical Distribution Security Alliance (PDSA) but it seems like that organization has the right mix of associations and individual companies in its membership, although its original purpose was to pass a Federal serialization and track & trace law through lobbying Congress.  Could it be transformed into more of an industry technology mapping organization?  I don’t know, but from my outsider’s view it seems like the opportunity is large and this organization seems to have a significant head start.  I also know that the member organizations have employees with the necessary business and technical expertise, along with GS1 US, to come to the right conclusions.

The only obvious alternative would be for individual supply chain companies to send their ideas in writing to the FDA directly.  But without a technically consistent central thread, that approach could really confuse the FDA and that could easily result in inefficient regulations (again).  It seems like his would be the worst-case scenario.  Let’s do everything we can to avoid the doomsday scenario I laid out in my essay “How Smooth Will Industry Deployment of the ePedigree Laws Be? Take a Good Look At Healthcare.gov”.

Do you have any ideas for ensuring this next 12 months ends with logical, achievable guidance from the FDA?  Please, leave a comment below and tell us about it.