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Sweeping changes will begin to transform the pharmaceutical supply chain at the start of 2015, when the first provisions of the Drug Supply Chain Security Act take effect. The landmark legislation, which was enacted late last year, is intended to strengthen the integrity of the system that moves medications from drug manufacturers to distributors and on to pharmacies.
As of January 1, pharmaceutical suppliers and wholesalers will be required to exchange detailed transaction data to facilitate product tracing, and have systems in place to identify suspect and illegitimate products and be prepared to participate in an investigation into their origin.
In addition, those companies, along with community pharmacies and other entities that dispense prescription drugs, will have to qualify as authorized trading partners by registering with the Food and Drug Administration or an appropriate agency at the state level.
Those measures are the foundation of a system that, if all goes according to plan, will by 2023 put traceable product identifiers on every unit that travels through the supply chain.
“The legislation is groundbreaking,” says Liz Gallenagh, senior vice president of government affairs and general counsel at the Healthcare Distribution Management Association, a leading advocate for passage of the law. “It is arguably the biggest change that the collective industry has ever seen.”
HDMA has been working for the past 12 months to help its members and other stakeholders prepare for implementation of the first phase. In advance of the FDA’s issuance of guidelines for the legislation, the association in early November held a seminar on traceability, which attracted a record 270 attendees, on traceability that focused on such issues as serialization, data exchange architecture and systems compliance.
“We are right in the throes of preparation,” Gallenagh notes, “and the overall sense among our members is that everyone across the supply chain has been working very hard. It is all-hands-on-deck for manufacturers, distributors and technology companies, using all the resources at their disposal to make this happen.
“The industry, particularly the drug wholesalers, has worked to map out a set of transaction scenarios — typical models of how product moves among trading partners throughout the supply chain — which are available to the public on our website. What we’ve done is try to determine, based on the requirements of the law, what the flow of product and product data should look like.”
The FDA document was released in late November, a little more than a month before implementation of the Drug Supply Chain Security Act was to begin.
“While we are still in the process of evaluating this guidance and will provide a more comprehensive response to the agency during the 60-day comment period, it does appear to give the supply chain a degree of flexibility in preparing for the January 1 deadline to have in place processes and protocols to capture transaction data from suppliers and have the capacity to pass that information along to downstream customers,” says John Parker, HDMA’s senior vice president of communications.
The association does, however, caution that the spirit of cooperation between government, the industry and individual supply chain partners that has thus far characterized the process needs to continue. One concern is ensuring that all medications are available to patients when they need them.
In a recent letter to FDA officials, HDMA president and chief executive officer John Gray called the legislation “the best solution for enhancing supply chain security, creating uniformity across the country and ensuring the safety of our nation’s drug supply,” but reminded the agency that the needs of patients must be kept top of mind. “To forestall potential disruptions to the pharmaceutical supply chain, we urge the agency to ensure that the overarching priority in implementing this law is that patients continue to receive the products they need.”
