HDA’s 2017 Manufacturer Serialization Readiness Survey Results

There is a reason so many RxTrace essays have something to do with the Healthcare Distribution Alliance (HDA) (I won’t list them all, but here are two recent ones:  “HDA Traceability Seminar: RxTrace Future Topic List Explodes” and “HDA Schools FDA On DSCSA”).  It’s because they have their fingers in just about everything related to the US pharma supply chain’s preparation for compliance with the Drug Supply Chain Security Act (DSCSA).  HDA members are literally in the “center” of the supply chain, and the organization is at the center of many of the most important initiatives related to meeting the DSCSA, including their Origin master data sharing service (see “Dawn of HDA’s Origin, The Key to DSCSA Compliance”), their future Verification Router Service (VRS) (see “First Meeting of the HDA Verification Router Service Task Force”), and they hold the most important DSCSA conference every year (see “FDA Speaks About DSCSA At HDA”).  And their HDA Research Foundation now conducts the most important manufacturer DSCSA serialization readiness survey.  They just published the latest one.  Let’s take a look at it.

I’m only going to cover a couple of interesting morsels found in their survey.  You need to download the full 14-page executive summary yourself here to see all of the results:  https://www.hda.org/~/media/pdfs/industry-relations/manufacturer-readiness-survey-results-report.ashx.  Unfortunately, that’s the same URL as last year’s HDA survey report so it appears that you can no longer get that previous one.  What that means is, if you read my RxTrace essay about last year’s report (see “HDA’s 2016 Serialization Readiness Survey”), the link in that essay will get you a copy of this year’s report.  That will be confusing because it makes my references in that essay obsolete and therefore, wrong.  Not only that, but there is no date on the top of the page so it isn’t immediately apparent which year’s report you are reading.  An annual report should clearly indicate which year you are reading about.  In the new report, you can only tell by the reference near the end of the second paragraph to the FDA’s draft compliance policy from this past summer that extends the start of enforcement of the serialization and verification requirements (see “FDA Delays Enforcement of DSCSA November Deadline: What It Means”).  There isn’t even a header or footer after the first page to identify what it is.  At least the pages are numbered!

OK, those are enough negative comments.  Overall, the results contained in the document are very valuable.  The HDA has the unique ability to attract just the right survey participants, which ensures a higher level of accuracy than any other readiness survey out there.  The survey was conducted between July 13 and August 18, 2017, by Industry Insights.  That means the respondents should have been fully aware of the FDA’s enforcement delay and perhaps had already made adjustments to their serialization strategies.  I think we can trust that these results reflect the current plan of drug manufacturers targeting the US market.

The survey found out that the majority (see the report for the exact percentages) of drug manufacturers responding expect to begin shipping serialized product to wholesale distributors before November 27 of this year.  That aligns with what I heard informally at the recent HDA Traceability Seminar.  I asked representatives of only a handful of major drug manufacturers when they intended to begin serializing and all of them said they were not changing their plan to start shipping by the original deadline (which is only one week from today!).  That will give them a full year to make sure things are running smoothly before the enforcement begins.  Smart.

The minority that will begin shipping serialized drugs sometime after the original deadline are probably a mix of companies who would have been ready but will now take advantage of the delay in enforcement, and those who would have missed the deadline.  Most manufacturers had no concerns about meeting the new deadline of November 27, 2018, but a surprising percentage still expressed those concerns (see the report for the exact percentages).  The highest ranked reasons for those concerns were related to the FDA’s missed deadlines (see “Who Is Being Harmed By Four Overdue FDA DSCSA Guidances?” and “Is The FDA Intentionally Delaying Publication Of The Overdue DSCSA Guidance?”).

A surprisingly high percentage of respondents (see the report) said they expect to begin sending serialized data to wholesale distributors by November 27 of next year.  I know the big wholesale distributors asked for it (see “DSCSA Serialization: What Wholesalers Expect”), but I wonder if they’ll be ready to accept it anytime soon.  That will be their first large investment related to serialization aimed at full production quantities.  In a letter to their suppliers in February, Cardinal Health said they expect to begin receiving that data in GS1 Electronic Product Code Information Services (EPCIS) format in January of 2019, and that’s the date implied by others verbally at various meetings this year.  Follow GS1 US guidance for formatting that data exchange (see “The New GS1 US DSCSA Implementation Guidance Suite”).

Only a small percentage (see the report) of respondents said they do not plan on capturing and sharing aggregation data.  Doesn’t that mean, then, that the pool of companies who might need the HDA’s VRS service will be small?  Some wholesale distributors say drug manufacturers should choose to either supply aggregation data for all shipments in 2019, or use the VRS so they can properly verify saleable returns beginning in November of 2019 (see “DSCSA: Saleable Returns Verification”).  In their letter to suppliers earlier this year McKesson said they want manufacturers to choose one or the other, “…or both” methods.  I heard something even stronger during informal conversations at this year’s HDA Traceability Seminar.  Time to check with the wholesalers again to fully understand exactly what they want and when they will be ready to accept it.

The report also contained an interesting statistic I’ve never seen before.  “Of the product manufacturing lines in scope for serialization reported in this survey, 42 percent were internal lines and 58 percent were external lines managed by a contract manufacturer.”  With that high of a percentage being under the management of contract manufacturers, it’s no wonder how difficult it’s been for drug manufacturers to get ready for the original 2017 deadline.

There is so much more in this revealing report.  I’ve only scratched the surface here.  Plus, everything is broken down by manufacturer size and graphed for you.  Make sure you read it today.

Don’t forget, on December 5th and 6th the FDA holds its next DSCSA Public Meeting in Silver Spring, MD, and then the next two days, the 7th and 8th, in Washington DC, IQPC will hold their Pharmaceutical Traceability Forum (see “Don’t Miss These Back-To-Back Pharma Serialization and Tracing Events”).  With these two events happening back-to-back, you will be able to listen to the FDA, and then the very next day, find out how everyone else interprets whatever they said.  Use Discount Code: RxTrace_PharmaTrace20.  Don’t miss it.  Look for me at both events!