There may be “uneven” preparation among manufacturers, distributors, and dispensers to meet the FDA’s final DSCSA compliance deadline despite progress from 2021, according to a Healthcare Distribution Alliance survey sponsored by LSPedia.
The statement reflects crucial challenges facing the industry in 2023, including coordination between trading partners on interoperability, potential confusion over state and federal obligations, and frustrations with businesses who are waiting too long to update their systems for DSCSA compliance. Nearly 90 percent of distributors and more than half of manufacturers listed collaboration with trading partners among key challenges to achieving DSCSA interoperability. Asked their biggest overall concern with DSCSA implementation, collaboration was the most-cited issue among distributors, and the second-most for manufacturers, behind governance of the interoperable system.
As HDA monitored the state of the industry going into the final months of DSCSA, its questions emphasized discovering which requirements manufacturers and distributors will have implemented by the end of this year, and which they expect to complete by November 2023. The findings suggest that even as many businesses strive to bring their trading partners along with them into DSCSA compliance, too many others are leaving too much to do in the final months before the deadline.
In a positive trend, more than 57 percent of manufacturers responded that they are already aggregating data for all SKUs, an increase from 45 percent in last year’s study; 6 percent said they expected to do so by the end of 2022, and 36 percent in 2023. However, HDA’s conclusion expresses concern on the timing of pharmaceutical serialization. Less than a third of manufacturers said they are currently sending serialized data to wholesale distributors, and just a quarter expect to send serialized data with all shipped product this year. Additionally, some of the open-ended answers included with the report call attention to issues with exceptions management, including mismatches between data provided by a trading partner and the delivered product.
Nearly two-thirds of distributors said they are already able to accept serialized data, and of those who are not, a similar proportion expected to do so in 2022 rather than 2023. However, distributors also indicated that relatively few of their manufacturer suppliers were sending serialized data; nearly 18 percent said none were doing so.
As well, only about seven percent of distributors, across all responses, said that more than five percent of manufacturers’ transactions were accompanied by serialized data. The remaining 93 percent of respondents were split between receiving zero and less than five percent of transactions with serialized data.
In another key data point, 45 percent of distributors have concerns about meeting the VRS requirement, citing availability of master data, accuracy of the data exchange, and challenges with VRS and EPCIS. Still, VRS and EPCIS remain the top approaches to compliance with the requirement. When asked what made the difference in selecting an approach, the leading factors were efficiency and automation.
The report also calls attention to the fact that manufacturers are overwhelmingly already using EPCIS 1.2, with 87 percent having adopted the standard. Further, nearly 85 percent of these respondents expressed confidence in their ability to support wholesale distributors’ verification requirement for saleable returns, with the remnant voicing concerns about VRS and the need for additional guidance on the requirement. Regarding the method of supporting verification requests, more than 80 percent plan to send EPCIS files with product identifiers, and an overlapping 91 percent plan to use VRS. Additionally, 36 percent plan to use phone or email.
HDA polled distributors on the DSCSA preparedness levels of their dispenser customers. The survey first asked whether distributors believe their dispenser customers understand their current requirements, and then, whether these dispensers understand their obligations after November 2023. There were no “Yes” answers to either. Instead, the most popular answer for both was “Varies considerably,” at 55% for the first question and 49% for the second.
Independent pharmacies are the customer segment that worries distributors the most, with two-thirds of distributor respondents selecting the option, “Does not understand DSCSA requirements” for them. Distributors showed more confidence in chain stores, health systems, and hospitals, though they were still much more likely to say these customers are only “somewhat educated” rather than “educated.” Written-in answers add dimension to these numbers, with respondents commenting that dispensers often lack the time, resources, infrastructure, and technology needed to understand their responsibilities under DSCSA, let alone make the changes necessary to comply.
The report defends the FDA’s decision to delay enforcement of certain previous DSCSA milestones, but the authors also pose the question of whether this led some trading partners to wrongly believe “necessary 2023 investments and onboarding” can wait until the deadline.
Manufacturers’ progress on aggregation this year is encouraging, but not enough to allay concerns that companies will be behind schedule with the later step of sending data with shipped product, which most manufacturers are indeed tackling next year. Similarly, the authors are uneasy with the number of distributors who are counting on accepting serialized data in 2023, and add that many who have already complied are still working with manufacturers who aren’t sending data for total product lines.
The report indicates that many trading partners have not yet fully considered the time and focus needed to integrate each requirement of DSCSA. This emphasizes the vital need for businesses across the pharmaceutical supply chain to cooperate on information sharing and act urgently to clarify DSCSA at the crucial patient-facing end of the supply chain. Ripple effects from DSCSA data problems will only get more pronounced in the months close to the deadline, and businesses may come under pressure to build the capability to absorb the oncoming vast increase in data without operational disruptions.
“The survey paints a picture of a compliance environment where companies can make incredible progress, yet still fall short of their goals – amid growing time pressure – because their trading partners can’t, won’t, or don’t know how to follow suit,” said LSPedia CEO Riya Cao. “I encourage pharma companies to actively use Investigator to bridge the gaps between their internal system and those of their trading partners.”
LSPedia’s mission covers industry-leading, system-agnostic compliance solutions for pharmaceutical serialization, and offers resources and education to optimize its customers’ supply chain operations and protect their partner relationships. Its solutions and educational programs foster audit-proof DSCSA operations and provide long-term compliance support, allowing its customers to focus on growth amid a rapidly changing regulatory environment.
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