Wholesalers get ready for DSCSA compliance on Jan. 1

'Exception handling' will be the monkey wrench in maintaining normal distribution

You heard it was coming, and now it’s almost here: the Jan. 1 deadline, per the Drug Supply Chain Security Act (DSCSA), for pharma trading partners to receive lot-level transaction information as products are delivered to them. At the HDMA Traceability Seminar (Nov. 10-12, Arlington, VA), wholesaler representatives talked about anticipated situations come Jan. 1; they also heard, from Dr. Connie Jung, RPh, acting associate director at the Office of Drug Security, Integrity and Recalls of FDA, that the Nov. 27 deadline FDA has for providing guidance based on DSCSA will be delivered (but probably not before that date). That leaves the US pharma distribution industry—manufacturers and wholesalers alike—around 30 days to ensure that their processes meet federal requirements. A tall order!

What has been known since the legislation was passed last November is that manufacturers need to deliver the “3Ts”—Transaction Information, Transaction Statement and (most of the time) Transaction History—to purchasers of their products. For the vast majority of shipments, that means dealing with wholesalers, and the major, full-line wholesalers have already issued instructions to manufacturers on how to meet their requirements. Informal conversations at the meeting indicate that about two-thirds of manufacturers are already set up with the major wholesalers, but it is unlikely that there will be 100% agreement on Dec. 31.

Thus, the so-called exceptions handling process—what to do if the necessary documentation is not at hand when a shipment comes in, or, equally, if the documentation does not agree with what has actually been delivered. And as Kevan MacKenzie, speaking on behalf of an HDMA traceability-preparedness effort, so piquantly put it, “We will not be building new warehouses to handle quarantined [undocumented] product.” There will be a quick scramble to resolve exception issues, but if they are not quickly resolved, the product will be shipped right back to the manufacturer. This, of course, creates an undesirable cost and delay to normal distribution (keep in mind that the US industry ships roughly $1 billion worth of product every 24 hours). The major wholesalers have refined their receiving, picking and shipping practices relentlessly for over a decade, and now have a finely tuned machine that won’t easily accommodate the eventual disruptions.

MacKenzie identified seven “anticipated exceptions”:

Overage —More product than supporting data

Shortage —Less product than supporting data

Mis-Pick —Ordered NDC ‘X’, Received NDC ‘Y’

Mis-Ship —Ordered by Wholesaler ‘X’, Shipped to Wholesaler ‘Y’

Missing DSCSA Data —No ASN

Lot # Mis-Match —Lot # on Product does not match the ASN

Unauthorized Return.

(“ASN” refers to the common “Advance Ship Notice” that will contain necessary transaction information. HDMA has issued guidance on how to deliver ASN data to meet DSCSA compliance; it is available at no charge at HDMA's online store.) At one time in the past, manufacturers routinely shipped more, less or differently identified product to their customers, who could eventually resolve the discrepancies, but that must go to zero as soon as possible after Jan. 1. Meanwhile, Robert Celeste, senior director at GS1 Healthcare US—the folks who are developing industry standards likely to be used by many manufacturers and their trading partners for overall compliance with DSCSA and with equivalent distribution requirements around the world—presented a list of 33 exceptions, which include most of MacKenzie’s list, as well as the eventual item-level details that will be necessary to communicate when full DSCSA implementation occurs in the next several years. An even taller order!