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End-to-End Traceability Key to Compliance with Drug Supply Chain Security Act

Written by Robert Brice
September 14, 2016

The pharmaceutical industry faces new regulations from the Drug Supply Chain Security Act.

The pharmaceutical industry faces new supply chain regulations.

Signed into law by President Barack Obama in 2013, the Drug Supply Chain Security Act is three years into its decade-long fight against counterfeit prescription drugs. According to the U.S. Food and Drug Administration, the law provides guidance on building a transparent system for distributing drugs in the U.S. While the final phases won’t launch until 2023, those in supply chain management must abide by the regulations implemented along the way, including the upcoming requirements in 2017.

An Overview of the Law

According to the FDA, by 2023, the Drug Supply Chain Security Act should allow for more efficient drug product recalls, enable verification of a drug product identifier and heighten detection and notification abilities when products contain illegitimate components.

These efforts are meant to prevent the production and distribution of counterfeit drugs. As an ABC News story explained, individuals are selling drugs in the U.S. that appear to be the real medication. These products are typically either shipped from Canada or sold in venues like retail stores or flea markets.

Law enforcement agencies have been cracking down on this epidemic to protect people’s health. Consumers may purchase these products over the counter in an effort to save money, thinking they are authentic. While they may look similar to the real thing, counterfeit drugs often have incorrect chemical compounds and contain harmful replacement ingredients.

According to ABC News, through various raids, the U.S. Homeland Security, U.S. Customs and Border Protection, the Federal Bureau of Investigation and the Los Angeles Police Department uncovered counterfeit Viagra, Amoxicillin, morphine, Terramycin and heart medications, among other products.

According to AARP, the black market for prescription drugs has even made its way into pharmacies and hospitals. While consumers may be receiving the medications from trusted sources, such as their doctors or local pharmacist, only those in supply chain management would understand the drug’s actual origins. The Drug Supply Chain Security Act works to prevent any oversights or fraudulence along the supply chain and protect people from potentially harmful substances.

Upcoming Regulations

The PEW Charitable Trust released a timeline for implementation of the Drug Supply Chain Security Act, and 2017 has plenty of new regulations in store, particularly for manufacturing. Here are the pieces of the legislation scheduled to be enacted on November 27, 2017:

  • Serialize with unique product identifier: This identifier will allow for more effective traceability.
  • Provide transaction information to trading partners in electronic format: In an electronic document, manufacturers must specify what drugs were shipped, the time and date of shipment and the recipient. This document should also contain transaction history and a transaction statement.
  • Respond to verification requests from trading partners: Should partners request that manufacturers verify a product identifier, manufacturers must respond within 24 hours.
  • Verify unique product identifier of suspect products at package level: If manufacturers suspect a product is counterfeit, the law requires them to verify the product identifier, including the standardized numerical identifier.
  • Verify the unique product identifier of returned products intended for resale: Returned products must undergo an identification verification process.

According to the FDA, not complying with new regulations of the Drug Supply Chain Security Act, such as the ones scheduled for 2017, may result in penalties, though it did not provide specifics on the ramifications. Regardless, those in supply chain management not only avoid legal consequences by staying on track with these facets of the law, but they can also protect their brand. After all, transparency is highly valued by consumers, and if an incident like a recall does occur, companies want to act quickly to minimize the damage.

LEARN MORE: Fighting Counterfeit Drugs with Pharmaceutical Serialization [Infographic] »

Enhancing Traceability in the Supply Chain

While the advantages of traceability are clear, pathways to achieve that visibility aren’t always apparent. Far too many companies still use outdated paper-based tracking systems that set them up for the brand-ruining consequences of a recall. Wireless and mobile automated data collection software solutions are critical to efficient traceability.

The food and beverage industry has also been challenged with complying with similar FDA regulation. According to the RFgen white paper “The Food Traceability Survival Guide,” supply chain management must integrate traceability into all technology processes. Specifically, ERP systems that can track by lot numbers, SKUs, serial numbers and other identifiers allow constituents along the supply chain to quickly track drug products.

In 2017, manufacturers will have to investigate any suspicious products, and the appropriate technology can ensure those items stay in the warehouse during this inspection. According to the white paper, this requires integrating ERP and data collection systems to prevent suspicious products from moving along the supply chain.

However, supply chain management wants to ensure these types of investigations are conducted only when necessary. Otherwise, brands face productivity losses. Preventing incorrect data from entering IT systems can help. The RFgen white paper advised implementing an automated data collection systems to achieve backward and forward product traceability.