It's an incredibly important year for the pharmaceutical industry. We're coming to the final months of preparation for full enforcement of the Drug Supply Chain Security Act, the final deadline concluding a decade-long transformation of the pharma supply chain.
As of November 27, 2023, DSCSA supply chain serialization will be in effect, meaning that every product must be traceable at the individual package level, with EPCIS files logging every event since its creation, including transfers and aggregation into pallets and cases. Transactions will be handled entirely through electronic data exchanges, via interoperable connections between each pair of trading partners.
It's a tall order, having been rolled out in phases since the law was enacted in 2013.
But even given that long timeframe, the question on everyone's mind is: What actually happens this year? What happens if your business -- or a trading partner's business -- isn't compliant in time?
We're already seeing a change underway. In our test environment, EPCIS file exchanges jumped from 1,000 to 15,000 between December and January. Accounting for tracking each package via EPCIS, then that number is nowhere near the peak it'll reach this year.
Trading partners -- at all stages of their DSCSA compliance journey -- have commented to us that they're now taking a square look at what to expect in terms of shipping and logistics this year.
Now, it's reasonable to expect that businesses will have DSCSA solutions in place far in advance of the deadline, rather than viewing that deadline as the flip of a switch. But it's inevitable that some will delay too long.
There are pharma businesses that will wait until Fall 2023 or later, having underestimated the complexity of fully implementing DSCSA and making any needed operational changes to their supply chain operations. Others will simply have failed to move forward with DSCSA, perhaps believing, wrongly, that business will more or less continue as usual. They may have the notion that the FDA would grant enforcement discretion, a case there's no evidence will happen.
What's most likely is that as this year progresses, trading partners who aren't compliant with DSCSA will begin getting tough questions from others with whom they do business.
On a structural level, these may concern the Authorized Trading Partner requirement, which requires that businesses only trade pharmaceutical products with those who fulfill requirements for their business type, or interoperability, where the compliant business would press its partners to collaborate on forming the connections needed for a DSCSA data exchange.
On a day-to-day level, these will likely concern exceptions. Essentially, a trading partner who isn't compliant with DSCSA will know something's wrong when their transactions fail (or take a great amount of additional and exacting manual work to process). An exception occurs when data doesn't accompany the physical product, or if the data doesn't match the product as delivered. So, if a company cannot deliver or accept EPCIS files properly -- or lacks the means to quickly process and correct them -- their operations will become difficult, and doing business with them will also be difficult.
As we know, an exception keeps product from moving, causing it to be quarantined until the mismatch or missing data is resolved. If it can't be resolved, outcomes can include returning the product or even destroying it. This is to ensure that illegitimate or suspect product is consistently removed from the supply chain, and has no chance of harming patients.
Thus, businesses that don't take DSCSA compliance seriously are only going to hurt themselves. Even if there's nothing wrong with the product they're delivering or accepting, there will be no way for them to legitimately transfer or sell it if they can't properly account for it in their data. And, of course, after the deadline, they'll be at risk of regulatory penalties.
It seems a bit early to talk about the 2023 winter holidays, but it's an unavoidable fact that the final DSCSA deadline lands right after Thanksgiving.
To put it lightly, this is not a day, week, or even month (the arriving December) when you want to deal with new shipping problems, as it follows a national holiday and a generally accepted shopping holiday (Black Friday), is another shopping holiday in its own right (the day now known as Cyber Monday), and marks the lead-in to the Christmas business season.
So, the rapid coordination needed to introduce new systems at this point in the year may not be easily possible. Even if the key personnel within your business are available, those at your trading partners may not be.
That factor, alongside any Q4 challenges a business may normally face in December, make this a harsh timeframe for introducing any new systems, let alone ones that are essential to your ability to both legally and practically do business.
Long before then, of course, we'll have seen EPCIS rates reach much higher levels, and businesses -- particularly hospitals and dispensers, which need to layer this change on top of a high-traffic, patient-facing environment -- will have already faced greater pressure from partners to implement DSCSA if they haven't yet done so.
Realistically, then, businesses will face relationship-level and operational challenges long before they'll need to deal with penalties of non-compliance. This means that the deadline can't be dismissed as a single temporal challenge, relegated to its business quarter; successful transactions and the efficient, unobstructed flow of product are going to grow as concerns throughout this year, starting now.
From that view, it becomes clear that the DSCSA deadline isn't the thing to worry about. Instead, focus on making the DSCSA implementation decisions that best benefit your business relationships, supply chain operations, budget, and stress levels.
Find out more about how LSPedia's solutions can save you time and money while ensuring audit-proof compliance: