You may already be paying the hidden costs of DSCSA exceptions

February 10, 2023

You may be underestimating the impact of exceptions, the errors that occur when DSCSA transaction data is missing or doesn't match a prescription drug shipment as delivered.

In your annual budget planning, exceptions might currently be seen as a small or even negligible annual expense, representing only a small percentage of costs. However, if high EPCIS failure rates persist, and are not understood as a critical threat, exceptions can become a controlling factor, spurring cascading expenses.

Whether you're in danger of significant financial losses from DSCSA exceptions depends on what you know about them, what you've done to plan for them, and whether you adapt your operations when they occur.

The immediate dangers of DSCSA exceptions

You'll realize quickly and distinctly when exceptions begin costing you a lot of money, as more begin occurring (and they will) amid the industry's adoption of the final measures of DSCSA this year.

You will, of course, notice the loss of your product. If you need to return or even destroy goods because you and your trading partner can't resolve an exception, they're simply not getting into the hands of patients, and you're losing money.

Disruptions to supply chain continuity force tough decisions. If product isn't available as ordered in a timely fashion, the next move may be to order a generic or find another brand, which can add great difficulty to filling a simple order (and potentially startle the patient, adding stress on the pharmacy end). And if you're losing inventory that you need, you might move on to conversations about increasing production to compensate.

Further, pharmacies won't tolerate unusable product sitting while its status is sorted out. Space is limited and expensive.

The cost and disruption of these situations will be felt sharply. You're operating in an environment where failure is not an option, so once these cases occur, you'll likely reach for the phone; shortly thereafter, LSPedia will help your team sort it out and get your costs under control.

Then again, you may not immediately notice all the costs you've incurred, or realize the damage that DSCSA exceptions are doing to your bottom line. Think of it as an example of "boiling frog syndrome," the notion, though apparently apocryphal, that a frog won't respond to the water around it heating up until it's already too hot to escape.

The boiling-frog DSCSA dangers

Let's say your business experiences some disruptions related to exceptions, but not absolutely showstopping ones: annoyances where someone on staff has to dedicate part of their day, each day, to working through data errors on inbound transactions. They check the data, scroll through EPCIS files, email their suppliers, talk through it on the phone, and so on, until the matter's figured out. Daily supply chain operations may be more difficult, but are not being ground to a halt. However, they're only able to progress "normally" because someone has taken on this additional burden.

The cascading impact will first be felt by that person's colleagues, of course, or by an entire team if the responsibility is shared. Depending on the flexibility and responsiveness of such a group, and again, assuming that the errors are not utterly showstopping, they may even get good at it. Every so often someone grumbles, "There's got to be an easier way to do this," but they have a job to do. Each problem is immediate and won't wait for solutions at the structural level.

Your team starts training newcomers to reproduce the lengthy, time-consuming set of maneuvers they use in each case.

What you have done, at this point, is normalize a very expensive problem rather than solve it.

The DSCSA bill comes due

Your very talented team is now dedicating a significant portion of their schedules to working through disruptions, rather than doing what you hired them to do. Importantly, when their hours are tallied, this problem may not be obvious. It might be a few months before someone asks, "Why is Liz putting so much extra time into 'inventory management?'" Or, "Why are we spending 35 percent less time on client service than this time last year?"

At this point, there are likely other warning signs as well. Your targets for the quarter, or the year, are not where you want them to be. Customer complaints have risen and revenue has fallen. Key partner relationships have become antagonistic; it seems like you only ever get on the phone when there's a problem.

You are now officially having a bad year. You may course-correct one way or another when, or if, the culprit is detected, but the damage to your bottom line has already been done.

Take control of your DSCSA compliance costs

Such dangers won't be news to participants in our Exceptions Pilot. Each week, we're discussing how these problems can be prevented, rather than laboriously dealt with over and over again, from time-eating quandaries to critical product quarantines.

LSPedia's OneScan and Investigator solutions are already designed to automate exceptions management and compliance, adapting to regulatory changes for you.

The pilot leverages these industry-leading technologies to push further into unknown situations that will become more and more common in the months ahead, providing tools that benefit the entire pharma supply chain. Trading partners across the industry don't just need one-off fixes, but commonly understood processes and discrete SOPs for responding to exceptions. That's what we're achieving.

To be frank, if your organization is at risk of letting DSCSA costs snowball, that may not be the full extent of your problems. If there's room for persistent exceptions in your supply chain operations, there's room for showstopping ones, and these can make audits harder or even invite regulatory scrutiny.

November 2023 is less than nine months away. It's a major risk to wait too long to get control of your DSCSA compliance standing.

What you can do now

If you need to understand more about your organization's requirements, try signing up for a DSCSA class to get expert guidance geared to your business.

You can also schedule time to talk with LSPedia experts directly or write to to get an overview of where you are and what you need to do next.

There are lots of ways to get your business out of hot water with DSCSA. Waiting until late 2023 is just letting the pot heat up.