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The Pharmaceutical Distribution Security Alliance proposes an industry governance process
A fundamental fact of making the Drug Supply Chain Security Act (DSCSA) effective is that collaboration is required among participants in the entire pharma supply chain—manufacturers, distributors, pharmacies and health systems, and a long tail of specialized firms including logistics providers. A common refrain—especially when technology-based platforms like blockchain are proposed—is that a “governance mechanism” is necessary to establish common practices and interoperability among participants. Yet, apart from some vitally needed steps taken by the Healthcare Distribution Alliance to meet looming regulatory deadlines for its wholesaler members, no such consensus group has come forward.
That might be about to change: the Pharmaceutical Distribution Security Alliance (PDSA) is back in public view, and is now trying to bring the necessary parties together. PDSA is a coalition of supply chain participants, originally brought together to work with legislators writing the DSCSA law (which was passed in 2013, and set an unusual 10-year implementation schedule that is supposed to reach fruition in 2023). Serving in an advisory and coordinating role are several industry consultants, originally at a Washington-based advisory firm, FaegreBD, but now executives at Leavitt Partners, another Washington advisory firm. (Founder Mike Leavitt has been, among other things, head of HHS during 2005-2008.)
“PDSA was started to provide the cross-sector, consensus-driven dialogue needed to develop and implement the DSCSA, and it has stuck together since the law was enacted, with only minor changes in membership,” says Eric Marshall, senior director at Leavitt Partners and a PDSA advisor. “To move governance forward, broader participation will be needed” from industry; he also notes that a new independent legal structure will need to be created for the proposed governance. Current PDSA members (there are about 30) include key players like PhRMA, BIO and the Assn. for Accessible Medicines; HDA; the National Assn. of Chain Drug Stores; the American Soc. of Health-System Pharmacists; and 19 biopharma companies, chain pharmacies and distributors. Notable exceptions include the National Community Pharmacists Assn. (the largest grouping of independent pharmacies); McKesson, the largest US distributor, and Walgreens Boots Alliance; and the big logistics providers, FedEx and DHL (Marshall says the UPS, a former member, has now rejoined.)
PDSA has issued an overview white paper and one that identifies some of the key current issues in what it calls “Phase II” of DSCSA compliance— the requirements for electronic, interoperable tracing and verification at the unit-level, which take effect in 2023. These issues include interoperability for exchanging, verifying, and tracing supply-chain movement. The governance document sets out some customary language on having a board, elections and so forth, but one can see the sticking points already. A 14-member board of the governing body would have four seats for manufacturers and repackagers; four for wholesalers and logistics providers; four for dispensers, including pharmacies; and two at-large seats. Solution providers (a highly competitive bunch) would be able to participate through advisory groups, but would not be board members; and there has been edgy relations between the chain and independent pharmacies. But we’re getting ahead of ourselves; there are many people in the industry who still have fundamental issues over the need for such issues as aggregating shipment data, or how those data are shared with trading partners.
“We believe that the establishment of an independent governance body to address the needs and concerns of all stakeholders through engagement and leadership is imperative,” says Marc Watrous, SVP, managed care and customer operations, Genentech.
“A governance entity such as the one being proposed today by PDSA is essential to advance the statutory requirements through a neutral body, and drive the discussion and process forward,” said Matt Sample, VP, manufacturer operations, AmerisourceBergen.
There are certainly precedents for what PDSA is proposing: the GS1 organization, which enforces barcode and product-data processes, is a similar trading-partner-led organization; one can also think of EMVO, the European Medicines Verification Organisation, which is chartered by the European Union as the body that is putting the EU’s Falsified Medicines Directive into action.
PDSA will hold an open webinar on the proposal on April 1, and one of a series of while papers have already been issued, and are available for download here. Marshall says that additional white papers will be issued over the next several months, and that “while PDSA does not itself intend to serve as the governance body, it is committed to doing what is needed” to get the governing body off the ground.