Industry traceability activity ramps up, with some companies already preparing for 2017

FDA enforcement delay to May 1 isn't slowing down project work


When the FDA Office of Compliance, generally the central point for enforcement of the Drug Supply Chain Security Act (DSCSA), issued “immediate implementation” guidance that the looming Jan. 1 deadline for having a functioning system for transmitting transaction information from manufacturers to trading partners was postponed to May 1, it seemed merely to confirm an expectation that FDA had to give the industry more time. Informal assessments had indicated that roughly three-quarters of the pharma supply chain would be ready by Jan. 1 for the DSCSA deadline; that indicated that pallets of undocumented product could start stacking up at distributors’ loading docks and, as one major wholesaler put it, “We will not be building new warehouses to handle quarantined [undocumented] product.”

The Healthcare Distribution Management Assn., for one, had sent letters to FDA cautioning that full industry readiness had not yet been achieved. The next deadline in the 10-year process of full DSCSA compliance is to be a July 1 date for retail and other pharmacies to have the transaction information available to FDA inspectors; allowing two months between complete manufacturer-distributor data exchange, and subsequent data exchange with retailers, seems problematic at this point, but FDA wants to keep the pressure on to keep DSCSA compliance moving forward.

“Issuing the traceability guidance in November, expecting a January 1 implementation, was unrealistic,” says David DeJean, president and CEO at Systech International (Cranbury, NJ), one of the leading IT vendors working in the area. “Even so, most major biopharmas have their implementations in place, and are working toward the next deadline in 2017.” (In that time frame, the first steps toward item-level traceability will be taken.)

Case in point: EMD Serono, which announced in November that it is already doing individual serialization for all four of its major brands: Serostim and Saizen (both somatropins); Rebif (interferon beta-1a); and Gonal-f (follitropin alfa). For many of its products, EMD Serono already has a limited pharmacy network that it interacts with directly to ensure safe and appropriate dispensing. Serialization is carried out with 2-D barcodes (and linear codes on cases). Layered on top of this is a new smartphone app, brandnamed Check My Meds, that allows patients to record and then authenticate their dosages with a central database maintained by EMD Serono.

Although such traceability has significant implications for supply chain visibility, Kimberly Fleming, associate director of product security and outbound logistics, says that Check My Meds is “data push, not data pull”—the company will not be collecting patient data such as locations or lookup frequency. Once a patient does perform the smartphone verification, there is an option to link into the company’s patient support services, but that’s at the patient’s option.

The international timelines for traceability initiatives are also pushing the industry along; in the best-case scenario, a manufacturer would install a traceability solution that, with as little modification as possible, could be adapted to the US’ and other countries’ rules. That reality is bringing QAD (Santa Barbara, CA) into the life-sciences traceability scene: the major enterprise resource planning (ERP) vendor has developed a traceability solution to meet the requirements of a UK manufacturer, Aesica Pharmaceuticals, shipping into China (whose system involves the China FDA sending designated serial numbers out to manufacturers to apply to pharma packages); the company is also active in the Unique Device Identifier (UDI) program being implemented by med device manufacturers in the US.

“Compliance is the immediate priority of our life sciences customers, but we see important added value in managing financial elements like chargebacks, product returns and the like with our traceability module,” says Bart Reitter, director of marketing for life sciences at the firm.

3PL licensure
Yet another guidance document issued by FDA in late 2014 requires both wholesalers and third-party logistics providers (3PLs) to file state licensure information (if it exists for 3PLs) by March 31, 2015. Wholesalers are to begin filing after Jan. 1; 3PLs were to begin immediately. Each facility address is also required information. Wholesalers are to provide the name of a contact person for FDA; this is recommended but not required for 3PLs. All these data are to be updated annually.

Only a few states currently license 3PLs for healthcare products, so the new regulations will be bringing a host of 3PLs into the FDA scope. Also, it’s not widely recognized, but usually when a pharma manufacturer buys finished drug products from another manufacturer, it is acting as a wholesaler. Further, many wholesalers also act as 3PLs, and FDA is instructing them to file under both categories. (The FDA definition of a 3PL is an entity that “provides or coordinates warehousing, or other logistics services of a product in interstate commerce on behalf of a manufacturer, wholesale distributor, or dispenser of a product, but does not take ownership of the product, nor have responsibility to direct the sale or disposition of the product.”)

FDA’s goal, as specified in DSCSA, is to “make a database of authorized wholesale distributors available to the public on FDA’s website [and] to make information about 3PLs available … because having the license status of 3PLs in one publicly available database would be helpful for FDA, trading partners and other stakeholders.”

The Drug Supply Chain Security Act of 2013, which is the source of all of these new regulations, has a timeline out to 2023 for additional rules and practices. IT, manufacturing, supply chain and compliance managers are going to be busy for years to come. 
 
 

Industry traceability activity ramps up, with some companies already preparing for 2017

DSCSA's Jan 1 deadline is the immediate worry, says HDMA


The noisy revolution in pharma distribution activities is about to get even noisier as the Jan. 1 deadline approaches for having manufacturers and trading partners exchange data on shipments in a manner regulated by the 2013 Drug Quality and Supply Chain Security Act (DSCSA). However, there’s a strong feeling that 100% of manufacturers won’t be ready, and this creates the possibility that their wholesalers and distributors won’t be able to put products into commercial circulation as a result. 
 
By contrast, some manufacturers are already finalizing their internal systems for the next step in traceability: tracking individual packages, which have been uniquely serialized, through the supply chain. Case in point: EMD Serono, which announced last week that it is already doing individual serialization for all four of its major brands: Serostim and Saizen (both somatropins); Rebif (interferon beta-1a); and Gonal-f (follitropin alpha). For many of its products, EMD Serono already has a limited-pharmacy network that it interacts with directly to ensure safe and appropriate dispensing. Serialization is carried out with 2D barcodes (and linear codes on cases). Layered on top of this is a new smartphone app, brandnamed Check My Meds, that allows patients to record and then authenticate their dosages with a central database maintained by EMD Serono. 
 
Although such traceability has significant implications for supply chain visibility, Kimberly Fleming, associate director of product security and outbound logistics, says that Check My Meds is “data push, not data pull”—the company will not be collecting patient data such as locations or lookup frequency. Once a patient does perform the smartphone verification, there is an option to link into the company’s patient support services, but that’s at the patient’s option.
 
Meanwhile, the wholesaler community, led by the Healthcare Distribution Management Assn. (HDMA), is signaling growing worries over the Jan. 1 deadline. “There is concern among HDMA member distributors that the supply chain will not be 100 percent compliant with the DSCSA requirements on January 1, due to some legitimate products entering the supply chain without adequate transaction data,” it wrote in a letter to FDA in late November. HDMA urges the agency either to use “enforcement discretion” to allow the continued flow of products into commerce, or to provide additional guidance for what its members should do with undocumented product deliveries. (DSCSA requires certain transaction information at the lot level for shipments received after Jan. 1; the item-level traceability comes years later.)
 
As might be expected, traceability vendors are touting their increased level of activity among pharma clients. RfXcel (San Ramon, CA) says that its rfXchange trading network is operational with each of the Big Three wholesalers (McKesson, AmerisourceBergen and Cardinal Health), and that it has set up a “host” of wholesalers and distributors with “many” pharma clients. TraceLink (Woburn, MA) has made a similar announcement about the Big Three; it also claims that 50,000 organizations have signed onto its global data-exchange network, a first step to transmitting or receiving transaction information. 
 
Both TraceLink and RfXcel offer cloud-based data management and transmission; others, such as Optel Vision, Roc-IT, Systech International, Axway, Acsis and International Business Systems offer on-premises solutions as well. The business is rapidly internationalizing (and, one could argue, that the US is merely playing catchup with the rest of the world); Optel opened an office in Ireland in November to serve European clients; Antares-Xyntek, a collaboration between those two companies, is touting its hundreds of implementations in Europe as it builds a US client base; and Aegate Ltd., a UK company that provides authentication in several European countries, says that it is negotiating an “envisaged protocol agreement” with the Ministry of Health of Italy to access a national drug-tracking database. It also claims that 90% of Italy’s pharmacies are already employing Aegate authentication technology.
 
Some of these companies provide machine-vision systems as well as software solutions for recording and transmitting transaction information; some are software only. Hardware-software collaborations between these companies as well as packaging-line component suppliers are also occurring. The chatter at an HDMA meeting held in mid-November was that only two-thirds to three-quarters of manufacturers would be ready on Jan. 1 (thus the concern by HDMA for undocumented product)—but right after that, US dispensers (pharmacies) are supposed to have their own data exchange in place by July 1. It’s going to be a bumpy ride.