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Wholesale Distributors Wonder: “What about Saleable Returns?”

By June 29, 2016March 2nd, 2021DSCSA, News, Serialization

As the DSCSA deadline quickly approaches, manufacturers, repackagers, and wholesaler distributors are feeling increasing anxiety around the various implementation issues. One major issue: how wholesale distributors are going to handle saleable returns.

While the phrase “handle saleable returns” sounds relatively benign, what it means is creating a multi-pronged process using new technologies that will enable those distributors to easily identify and manage pharma products returned to them from a dispenser, while also coordinating mandatory verification of product identifiers with the manufacturer.

Not so simple. Especially given the fact that 1,130,000 units are returned every week across the industry – or 226,000 units every day. Wholesale distributors I speak with are eager for insight, and just last week  the Healthcare Distribution Alliance (HDA) – formerly the HDMA – hosted a Saleable Returns webinar.

Pilot Program Highlights Problems, and Offers Some Solutions

In plain English, here’s the DSCSA requirement around saleable returns: Starting in November 2019, wholesale distributors are required to:

  1. Associate returned products with their Transaction Information (TI) and Transaction Statement (TS)
  2. Verify the value in the 2D matrix matches with the GTIN, serial number, lot number, and expiration date assigned to the product by its manufacturer or repackager

The main problem manufacturers and distributors face in meeting that requirement is this: Distributors have the drug product labeled with a 2D barcode, but manufacturers have the data about that drug. In order for distributors to verify that 2D code, they need access to manufacturers’ data. The two parties have never had to interact this way before, and establishing a workable process is complicated.

Earlier this year, HDA launched a Saleable Returns Requirements Pilot. The program brought together a number of manufacturers and wholesalers to take part in a program that would achieve four goals:

  • Illustrate to the FDA the realities of processing DSCSA returns
  • Demonstrate that pharma partners are working to meet compliance requirements
  • Propose supply chain solutions to compliance problems
  • Build industry consensus around saleable returns processes

While the pilot will continue through September, last week the HDA and some of the program participants – H.D. Smith and Johnson and Johnson – shared what they’ve learned so far. As you’ll read, there’s good news and bad news.

  1. Serialized labeling issues
    • Distributors are having trouble reading labels due to glare, poor contrast, and color.
    • Inconsistent expiration date values in the 2D code is getting errored-out by scanners. For instance, a date rendered as 180800 (for 2018, August, but no specific date) defaults to August 00, 2018, which is invalid.
  2. EPCIS – a standard language with many interpretations
    • Just as the iPhone’s Siri software has trouble comprehending British and Australian accents, your EPCIS data may not be understood by your trading partner’s systems. With ERP, warehouse, home grown systems, and off-the-shelf systems in use, each can interpret and export EPCIS data in its own way – giving us inconsistent data exchanges.
  3. Partner coordination
    • In short, it’s more complex than it appears. Pilot participants are finding that the process requires more time, more communication, and more collaboration than initial plans accounted for – and stressed that agreement and consensus is the only path toward compliance success.
  4. Handling suspect product
    • In best-case scenarios, returns are verified and restocked to inventory. In other cases, a product can’t be verified by the distributor, so they’ll need to turn to the manufacturer. But what if the manufacturer can’t verify either? Who has the responsibility to process the suspect product and report it to the FDA? That’s an open question. Given the FDA’s 24-hour requirement on suspect product reporting, the roles and responsibilities around this issue need clarification among partners.

In the midst of the pilot, there seem to be more questions than answers. However, uncovering these problems is the first step toward solving them – and it is critically important that the industry understand these issues in time to implement solutions.

That said, the work done so far by the HDA is tremendously helpful to the industry. I look forward to their comprehensive report this fall after the pilot concludes. I will certainly report back to you then.

How LSPediA Can Help

LSPediA is here to uncover your issues and address your concerns, because your compliance and business continuity are important to us.

Working with LSPediA means you have a partner with deep experience and a complete understanding of the DSCSA and the entire serialization process. Starting for as little as $1000 a month, we can give your company compliance piece of mind – and a competitive edge. The time to begin serialization is now, so contact us today and we will customize a solution that meets your needs.


About LSPediA

LSPediA helps pharmaceutical manufacturers and distributors implement serialization and aggregation processes to meet global regulations, DSCSA requirements, and future track-and-trace mandates. Our services include URS, RFQ, gap analysis, serialization toolkits and solutions, DSCSA strategies, management consulting, and more.

We value long-term relationships and work with our clients’ internal teams to properly define roadmaps, create architectures, and implement systems that align to vital business goals, ultimately helping them derive maximum value from their investments, both now and well into the future.