LSPediA Issues Letter to Manufacturers on DSCSA Saleable Returns Verification Deadline

August 12, 2019

LSPediA is issuing a critical letter to manufacturers to call attention to the DSCSA saleable returns verification deadline and the high rate of verification failure. We recommend you take steps to keep good products in play by scheduling a meeting to discuss our VRS solutions.

The Problem

LSPediA Issues Important DSCSA Letter to Wholesale Distributors

As you’re aware, the DSCSA deadline for saleable returns verification is just three months away—November 2019. The mandate presents significant regulatory challenges and business risks for wholesale distributors and manufacturers. According to data from the Big 3 wholesalers, two percent of products are returned from dispensers to wholesalers and, at face-value assessment, are viable to restock and sell.

It’s now clear that industry focus is shifting from how to accomplish verification toward what to do when verifications fail. This goes for good products that fail to scan properly, but also for the essential requirement to identify and investigate suspect or illegitimate products that enter the returns process.

The returns verification requirement is a milestone for the U.S. drug supply chain. That’s because as of November, serialized barcodes and associated data will be used as more than just packaging graphic design. Rather, those important elements will be used to identify product authenticity via the verification process.

Currently, wholesale distributors process saleable returns through data and visual inspection. They do so diligently, keeping the supply chain operating efficiency by restocking the two-percent saleable returns and ensuring product availability for patients. In November, they must enhance the inspection process by verifying the unique product identifiers embedded in the serialized 2D barcodes.

Faulty Barcodes

But there are problems. Evaluating and scanning serialized barcodes has, thus far, a less-than-stellar track record. Currently, three out of ten 2D barcodes fail due to data parsing, expiry date anomalies, and other reasons. These all result in negative verifications. Using a conventional Verification Router Service (VRS) solution that lacks the ability to manage negative verification will result in good product being put into quarantine, investigated, and removed from the supply chain. This kind of product loss has a disruptive ripple effect in the supply chain, causing lost sales, backorders, and the need for manufacturers to increase production to fill the void.

In the eyes of FDA regulators, there are even greater risks. These include the inability to properly respond to negative verifications, the challenge of identifying similar at-risk products, and problems associated with quarantining, investigating, and reporting suspect or illegitimate products to the FDA. The DSCSA regulations were enacted to avoid these risks, so regulators have high expectations for the process that was supposed to improve how these products are identified.

Conventional Solutions Fall Short

All currently available VRS solutions (save one) lack the ability to manage faulty barcodes and the resulting negative verifications. The problem is rooted in a fundamental design flaw: a binary “yes/no” system, which offers zero capabilities around managing negative verifications. This flaw leaves wholesalers unable to resell them, and manufacturers desperate for a resolution.

The DSCSA allows 24 hours for resolving exceptions. The loss of products is inevitable as distributors simply do not have the capability—via conventional solutions or the warehouse footprint—to hold products past 24 hours as the next batch of saleable return products arrives.

Bad as it is, the arbitrary but necessary disposal of these products for simple “negative verification” identification brings with it another negative consequence severe compliance implications: suspect or potentially illegitimate products are the proverbial babies thrown away with the bath water. Requirements to properly identify, quarantine, investigate, and report suspect products are being enforced by the FDA today. Enhanced systems and processes that can capture and manage suspect products with this upcoming compliance mandate are essential. But conventional VRS solutions are not enough. They only offer a false sense of security, a shell of an enhanced process, while actually creating critical regulatory risk for both wholesalers and manufacturers.

Compounding the risk is an apparent lack of vetted proposals from wholesalers around how to address the challenges. You’ve likely heard one or more of the following:

  • Our VRS is not going to be ready. It will be some time before it’s able to test and create a sense of readiness in general.
  • All negative verifications not addressed will be returned to the manufacturer for full credit. (Again, within this return are the good, the bad, and the downright ugly—i.e., potentially suspect/illegitimate products.)
  • FDA form 3911 will be created for all negative verifications not addressed. By default, the DSCSA mandates that action if a product can’t be verified.
  • Exception management (figuring out why your products failed to verify) will be a self-service function.

LSPediA Manages Negative Verifications

These are serious gaps. There’s a critical need for a solution that can investigate and manage exceptions in order to salvage good products with faulty barcodes. Only one provider has addressed the nuances of what constitutes a negative verification with a timely and pragmatic exception-management process – LSPediA’s VRS solution OneScan® with Investigator® module.

This solution categorically identifies negative verifications and alerts the corresponding manufacturer in real time. This then allows the manufacturer to enable verification by resolving the faulty barcode issue or confirming a need to quarantine suspect products. Other VRS solutions requires manufacturers to perform this anomaly identification manually. Other alternatives, such as hiring support organizations or offering self-service, are impractical and not up to the monumental task. Furthermore, such approaches are unscalable and inefficient from a resource and cost perspective.

Action Items

There is a way to keep good products in play and identify and investigate those bad products that are the true targets of the DSCSA regulations. To mitigate your risk, take action today:

We can highlight how our solution will help you work smarter, reduce waste, and generate profitability with compliance readiness and risk mitigation. Our OneScan solution can:

  1. Leverage an Investigator module to categorize and audit-trail negative verifications, reducing them from hundreds of uncategorized failures to a few manageable reports.
  2. Help you correct negative verifications and enable quick reverification or identify and investigate suspect products.
  3. Create a “single source of truth” quality/regulatory workspace to help manage suspect product investigations and ensure your ability to do so with FDA regulators.
  4. Use the Investigator module to integrate with any previously selected VRS solution and enable the same exception management capabilities as OneScan.
  5. Ensure your business and retail customers are prepared for the upcoming November 2020 deadline.

The right solution should bring business value and risk mitigation to your compliance process—not compromise it. We welcome the opportunity to share our value proposition with you and your quality, regulatory, and channel management stakeholders.

About LSPediA – Life Sciences Solutions

LSPediA is a leading supply chain software provider for the pharmaceutical industry. LSPediA’s serialization solution RxChain® and OneScan® Verification Router Service protect pharma companies against regulatory risks and improve supply chain efficiency. Pharmaceutical manufacturers, wholesale distributors, dispensers, and healthcare providers partner with LSPediA to manage serial data, distribute serialized drug products, and verify the validity of drug products.

To find out more, please call (248) 973-2008, email, or visit