The pharma supply chain is getting in gear for DSCSA, but many businesses are still waiting — and taking a big risk.

February 9, 2023

As the Healthcare Distribution Alliance's 2023 Distribution Management Conference (March 12-15) in Indianapolis approaches — and just months before the November deadline for DSCSA enforcement — it's important to consider HDA's most recent conclusions on the pharma supply chain's preparations for full serialization.

The most telling takeaway of HDA's Serialization Readiness Survey, sponsored by LSPedia, was its view of “uneven” preparation among pharmaceutical trading partners to meet the deadline. The survey, released in October 2022, noted progress in multiple areas, while highlighting others where progress didn't seem on pace to securely meet the deadline, as well as indicators that some trading partners will face significant challenges this year.

Dispensers' DSCSA preparation "varies considerably"

HDA gauged dispenser preparedness by gathering the views of distributor respondents who would need their partners to be DSCSA-compliant and have systems in place to process DSCSA data. The results showed a general lack of confidence that dispensers knew what was expected of them upon the enforcement deadline, let alone were confidently on the path to implementing DSCSA.

Asked whether their dispenser partners understood their obligations after November 2023, no distributors answered "yes" outright, and the most-selected answer was that the matter "varies considerably" across dispensers. Independent pharmacies were a point of particular concern, with two-thirds of distributor respondents answering that the segment “Does not understand DSCSA requirements.” Distributors were more confident in chain stores, health systems, and hospitals, though they were still more likely to say these customers are only “somewhat educated” rather than “educated.”

The survey also included written-in portions to clarify these answers. Here, some distributor respondents asserted that dispensers, operating a busy patient-focused environment, often don't have the time, resources, infrastructure, and technology needed to understand their responsibilities under DSCSA, let alone make the changes necessary to comply.

However, it's important to note that this doesn't tell the full story. There are now easy-to-use and quick-to-implement DSCSA resources that are specifically focused on dispensers and account for their unique challenges. Dispensers who are concerned that rolling out a solution will divert valuable staff time from customer service can get a significant advantage by leveraging systems such as the OneScan Pharmacy Solution, which can be implemented in 1-3 days, and made available for as little as $2 per day. Additionally, it can save money and boost efficiency, using serialization data for expiry management and store transfer to cut down on dead stock costs.

Upstream trading partners are making progress, but risks remain

More than half of manufacturers indicated that they were already aggregating data for all SKUs, an increase from 45 percent the previous year; six percent said they would do so by the end of 2022, and 36 percent would follow suit in 2023. Still, HDA expressed concern on the timing of pharmaceutical serialization, noting that less than a third of manufacturers said they were already sending serialized data to wholesale distributors, and just a quarter would send serialized data with all shipped product by the end of the year.

Nearly two-thirds of distributors said they were 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.

The report also noted that most manufacturers had already adopted EPCIS 1.2, and nearly all of them were confident that they could support wholesale distributors’ verification requirement for saleable returns. Regarding the method of supporting verification requests, As well, most said they planned to send EPCIS files with product identifiers to support verification requests. (An overlapping 91 percent said they planned to use VRS.)

An EPCIS surge is underway — but not everyone is prepared

It's important to mention here that LSPedia is already seeing a sharp increase materialize. Within the last month, we noticed that the volume of EPCIS files in the Test environment — where manufacturers test their EPCIS exchange with wholesale customers — had skyrocketed. Our Investigator platform tracks the industry's EPCIS data exchange volume and exceptions status; whereas testing files were steady at around 1,000 files a month for most of 22, we processed 15,000 test files just for the month of December.

The pace will only get faster from here. As the industry completes its transition to DSCSA data this year, our projection is that data exchanges will increase hundredfold, as full serialization means enabling traceability at the individual item level, a complex leap from traceability at the lot level. HDA expressed the legitimate concern that some trading partners were moving too slowly in upgrading their systems and processes for serialization, and it's possible that that the cutover will be lopsided for many combinations of trading partners.

In these cases, upstream trading partners may attempt to move increasingly massive amounts of data (that is, unprecedented under pre-DSCSA standards) to downstream partners who simply aren't ready for that volume. The recipients may also lack solutions for the accompanying rise in exceptions, where data is missing or does not match the physical product it accompanies. Indeed, a written-in section of HDA's survey noted the likelihood of issues with exceptions management, including mismatches between data provided by a trading partner and the delivered product.

LSPedia and numerous partners are carrying out an industry-wide Exceptions Pilot to create processes and standards for these cases. The effort will provide vital resources that can be applied to unforeseen data errors, preventing slowdowns across the entire pharma supply chain.

We asked participants how much flexibility they have to handle product-stopping exception situations; essentially, what their capacity is to hold onto stock that they can't legally accept or move. The answer is, if not zero, very close to it — because that situation means time and money lost. Not only does it mean giving up limited physical space and delaying a transaction, it requires intensive staff time that should go to business operations: serving patients and working with partners. With DSCSA data, exception situations can disrupt business, hurt partner relationships, and incur massive costs.

If your organization doesn't have a system that can easily detect errors, or procedures for how to handle them when they occur, the time to get these in place is now. Investigator is the industry's leading solution, capable of automatically finding and alerting personnel to exceptions, and helping resolve them — and, as such, keeping product out of quarantine.

The clock is ticking

HDA's report defended the FDA’s decision to delay enforcement of certain previous DSCSA milestones, though the authors warned that some trading partners may wrongly believe “necessary 2023 investments and onboarding” can wait until the deadline.

It's clear that many pharma trading partners have still not fully considered the time and focus needed to integrate each requirement of DSCSA. This emphasizes the vital need for businesses to cooperate on information sharing and ensure that their upstream and downstream partners are compliant. Ripple effects from DSCSA data problems will only get more pronounced as November 2023 approaches.

“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.”

To find out more, meet us at this year's HDA conference! We'll be at booth 302. Contact us now to reserve time to talk (or even schedule dinner with our team!)_or write to with your questions.