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What Isn’t Included in the Recent Exemption

Posted by bryan hanley On November 27, 2024 at 2:16 pm | Comments Closed

Published November 26th, 2024

Who Does It Apply To?

Recently, I shared that eligible trading partners were temporarily exempted from specific components of the Drug Supply Chain Security Act, “Latest DSCSA Exemption”. However, considering the stabilization period ends tomorrow, I thought I’d share some further insights on what isn’t part of the recent exemption.

First, as noted in my previous posts, the recent exemption doesn’t apply to everyone. As the FDA emphasized in their release, trading partners who are eligible for the exemption include “those who have initiated their systems and processes by successfully completing data connections with their immediate trading partners”, and “those who initiated processes including documentation of efforts to establish data connections but were not able to fully complete them with all immediate trading partners.” In other words, now is not time for trading partners to start initiating their systems and processes (that ship has sailed)—it’s time for trading partners to refine them.

Progress Necessary

The FDA wants to see progress made toward finalizing systems and processes capable of exchanging DSCSA transaction information and transaction statements with one another. Key enablers of this progress include:

  • Reconciling receipts of digital and physical representations of Serialized Information
  • Investigating suspect process
  • Verifying product for saleable returns
  • Responding to a trace request

In addition to documentation of progress, the FDA expects trading partners who plan to rely on the extension to communicate their intentions with immediate trading partners.

The FDA, similarly to when they announced their decision to implement the stabilization period, does not want trading partners to view this exemption as a “justification for delaying efforts to implement enhanced drug distribution security requirements.”

The deadline for compliance will come sooner than many expect, especially for manufacturers. In fact, there are only 129 working days until the May 27th, 2025 EDDS deadline.

Risks of Noncompliance

For those who haven’t initiated these systems and processes, punishments could be severe, and include:

  • Regulatory Risks: Potential for regulatory actions like warning letters, import alerts, or product seizures.
  • Operational Disruptions: Potential for supply chain disruptions and delays in product acceptance.
  • Market Exclusion: Risk of being completely excluded from the supply chain

Partners who do not meet the exemption criteria will need to submit a Waiver, Exception, or Exemption, or will more than likely face the consequences outlined above.

Stabilization Behind Us

Navigating DSCSA compliance amidst the constant changes to legislation can be tricky. However, one thing is for sure: if your business lacks systems and processes in place to implement EDDS requirements, the business is at risk.

With stabilization behind us, let Gateway Checker put you on the fast path towards supply integrity and regulatory compliance. Visit our website to view our services, or contact our team with any questions.

So, You Think You’re Exempt

Posted by bryan hanley On November 22, 2024 at 9:09 pm | Comments Closed

DSCSA Deadline: Just Days Away

The deadline for DSCSA stabilization is just days away, mandating Enhanced Drug Distribution Security (EDDS) requirements for manufacturers, repackagers, wholesale distributors, and dispensers. While the FDA announced an extension from certain components of the FD&C in the form of a phased approach, this extension only applies to certain eligible trading partners. Eligible trading partners include those who have either completed connections with immediate trading partners, or who have initiated efforts (with documented evidence) but could not complete them by the November 27th deadline.

The phased approach to exemptions arose after industry stakeholders and House of Representatives members called for additional reform, emphasizing how a lack of government intervention can lead to drug shortages. The deadline for eligible trading partners is as follows:

  • Manufacturers and Repackagers: May 27th, 2025
  • Wholesale Distributors: August 27th, 2025
  • Large Dispensers (>25 fulltime employees): November 27th, 2025
  • Small Dispensers (<25 fulltime employees): November 27th, 2026

In light of these exemptions, it’s important that we understand the details: who is and isn’t exempt, and from what specific requirements are eligible trading partners exempt from?

Who Is Actually Exempt? For How Long?

Unlike the 1-year stabilization period announced in August of 2023, this exemption only applies to certain eligible trading partners. To be eligible for the exemption, trading partners must have initiated their systems and processes in alignment with requirements outlined in section 582(g)(1) of the FD&C Act by the November 27th, 2024, start date. Section 582(g)(1) mandates the exchange of transaction data in an electronic and interoperable manner, implements procedures for product verification, and requires partners to keep transaction records in the case of a recall or in case product may be illegitimate or counterfeit. The announcement states,

“In order to prevent confusion, the FDA made it very clear in their announcement who they consider eligible for the exemption; they stated, “eligible trading partners are those who have initiated their systems and processes by successfully completing data connections with their immediate trading partners and those who initiated processes including documentation of efforts to establish data connections but were not able to fully complete them with all immediate trading partners.”

Additionally, this exemption “extends to trading partners throughout the pharmaceutical distribution supply chain who subsequently transact such product.” In other words, if a manufacturer is exempt and sends product downstream to a wholesale distributor, then that partner would be exempt for that product as well.

It’s also important to highlight the specific regulations eligible partners are exempt from. The announcement clarifies eligible partners are only exempt from certain subsections of 582(g)(1), 582(c)(4), and 582(d)(4). These specific regulations are as follows:

  • Section 582(g)(1) (A-F) for manufacturers and repackagers, wholesale distributors, and dispensers with 26 or more full-time employees
  • Section 582(c)(4)(D) For Wholesale Distributors
  • Section 582(d)(4)(A)(ii)(II) and (B)(iii) for Dispensers with 26 of more full-time employees

To read these specific requirements in full, click here.

How to Prepare for November 27th and Beyond

With FDA inquiries and audits to confirm compliance on the horizon, here’s a few steps you can take to ensure you aren’t at risk:

  1. Confirm the “Who” and “What” of the Recent Exemption:Understand if you are eligible, and if so, from what specific regulations you are exempt from.
  2. Test your exchanges: Testing exchanges is the best way to ensure your organization meets federal requirements. Gateway Checker’s TraceReady™ platformevaluates DSCSA conformance and compliance in line to the receiving and fulfillment process, enabling continuous quality assurance for your transactions.
  3. Prepare ahead of time: don’t see these exemptions as an excuse to delay compliance efforts. By preparing your systems before the deadline, you prevent disruptions to supply chains down the line, avoid potential penalties of noncompliance, and demonstrate your commitment to supply chain security.
  4. Communicate Consistently: by communicating your challenges consistently with your trading partners, you can address any complications before the deadline.
  5. Ask questions: The Gateway Checker team is here to support compliance efforts, no matter where you are in the process. Whether you need help providing evidence of data exchanges to trading partners, support communicating extension reliance, or need help meeting extension eligibility requirements, don’t hesitate to contact us.

 

 

Verification Router Services: A Solution to Drug Shortages? 

Posted by bryan hanley On November 8, 2024 at 1:21 pm | Comments Closed

Published November 8th, 2024

The Importance of Collaboration to Address Drug Shortages

On October 31st, 2024, I listened to a compelling LinkedIn conversation hosted by Chip Davis of the Healthcare Distribution Alliance, titled “Working Collaboratively to End Drug Shortages.” Joined by Laura Bray of Angels for Change and April Gile of the End Drug Shortages Alliance (EDSA), the panelists emphasized the crucial role of collaboration in addressing the issue of drug shortages. Both of their organizations have taken tremendous strides in addressing the issue of drug shortages, an issue adversely impacting millions of Americans every single year. 

When organizations work as individuals, rather than cooperating, little is accomplished to address the drug shortage crisis. In the conversation, Bray stressed “I have so many examples of times where 3 people in a room did way more than 30 individual organizations trying to solve [the drug shortage crisis]. 30 people in a room working to the same goal can truly solve the crisis and save lives.” The complexity of supply chains and other communication barriers make cooperation more difficult; however, its organizations like theirs that are helping make this process easier. 

To address shortages, we must bring together supply chain partners who typically don’t interact with each other. As April highlighted in the conversation, transparency and proactiveness are the keys to success. She noted: 

“How do we identify shortage risks in a preventive way, ahead of a shortage vs. behind it? How do we think about promoting transparency between these partners who have really never worked (together) before around inventory awareness, and really create an effective collaboration approach to prevent disruptions ahead of time vs. being responsive after a disruption occurs.”  

Pharmaceutical partners must invest in systems and processes that encourage greater transparency across the supply chain; one of these solutions is product verification through the Verification Router Service (VRS). 

Could VRS Help Solve the Problem?

Though most understand VRS as a means to handle saleable returns, product verification through VRS could provide other benefits. VRS can help proactively address drug shortages in a variety of ways, assuming supply chain partners verify product both at the time of order receipt and delivery.  By identifying replenishment rates to better address supply and demand, authenticating sources to prevent improper disposals, and providing up-to-date product information to support inventory turnover, there is a major role VRS can play in addressing shortages. 

Traceability is currently limited to a one-up, one-back system, where partners only track drugs one partner before (direct supplier) and one partner after them (direct buyer). However, as drugs make their way from manufacturers to end consumers, there are usually 4-5 stops they make along the way; these stops include wholesalers, distributors, third-party logistic providers, and/or other partners. It’s clear to see how supply chain visibility and transparency can be limited from start to finish; product verification through VRS systems, if used effectively, can help address the drug shortage crisis. 

The challenge? Making VRS data available for every supply chain partner. Currently, VRS data goes directly back to the manufacturer. However, in consideration of the role VRS could play in proactively addressing the drug shortage issue, could we consider making the data available to all supply chain partners? Could centralizing this data for analysis address the root cause of drug shortages better than current methods? While industry partners would need to collaborate extensively for this to work, the added transparency and visibility integral to resolving the drug shortage crisis would make it well worth it. 

What do you think? Do you see a future where VRS helps prevent and resolve drug shortages?  

DSCSA Exemptions from Section 582 and Other Requirements of the FD&C Act for Certain Trading Partners

Posted by bryan hanley On October 10, 2024 at 5:18 pm | Comments Closed

Published October 10th, 2024

The FDA announced on October 9th that they are granting eligible pharmaceutical trading partners exemptions from Enhanced Drug Distribution Security (EDDS) requirements of the FD&C Act. Eligible trading partners include those who have initiated systems and processes and successfully completed data connections with immediate trading partners, or those who have initiated processes (with documentation) to establish data connections, but were unable to fully complete them with all of their immediate trading partners, by November 27th, 2024.

Specifically, eligible trading partners will be exempt from key portions of Section 582 of the FD&C Act. These exemptions and their respective sections of the FD&C include:

  • Enhanced drug distribution requirements– section 582(g)(1)
  • Verification requirements for wholesale distributors concerning saleable returned product– section 582(c)(4)(D)*
  • Verification requirements for dispensers concerning illegitimate or suspect product– sections 582(d)(4)(A)(ii)(II) and (d)(4)(B)(iii)**

*Eligible wholesale distributors are still obligated to meet all other verification requirements of section 582(c)(4) of the FD&C Act, including package-level product verification to investigate suspect/illegitimate product.

**Eligible dispensers are still obligated to meet all other verification requirements of section 582(d)(4) of the FD&C Act, including package-level product verification to investigate suspect/illegitimate product.

The FDA has implemented these exemptions based on pharmaceutical trading partner feedback. Particularly, trading partners have described challenges resolving issues related to missing or erroneous data in electronic DSCSA transactions, without delaying drug movement downstream. This, partners have argued, could contribute to drug shortages and prevent pharmacies and patients from receiving the drugs they need.

These exemptions vary in length based on trading partner type:

  • Manufacturers and Repackagers: May 27, 2025
  • Wholesale Distributors: August 27, 2025
  • Dispensers with 26 or more full-time employees: November 27, 2025

It will be interesting to see how these exceptions are enforced, and how eligible trading partners will be identified:

  1. What “documentation of evidence to establish data connections” will make a trading partner exempt?
  2. How will the FDA ask for this “documentation”, and how will they check for progress?
  3. What will this mean for those who haven’t made efforts to comply?

7 Things to Know About DSCSA Enhanced Drug Distribution Security Requirements

Posted by bryan hanley On October 9, 2024 at 12:17 pm | Comments Closed
The Image introduces what the article will discuss, the 7 key things you need to know about enhanced drug distribution security as required by the Drug Supply Chain Security Act

The DSCSA: A Phased Approach to Implementation

Published October 10th, 2024

Over a decade ago, the FDA established the Drug Supply Chain Security Act to help protect consumers from potentially counterfeit, stolen, contaminated, or otherwise harmful prescription drugs as they’re distributed throughout the United States. The legislation focuses on establishing procedures for achieving interoperable, electronic product tracing at the package level, improving detection and removal of potentially dangerous drugs from supply chains, and providing a licensing system for wholesale drug distributors and 3PLs. 

The legislation mapped out a 10-year phased timeline, beginning with Product Tracing, followed by Verification, Authorized Trading Partner Establishment, Product Identifier Implementation and Verification, and finally, Enhanced Drug Distribution Security requirements (EDDS). EDDS requirements were supposed to go into effect on November 27th, 2023. However, in August of the same year, the FDA announced a stabilization period, delaying enforcement until a year after the original deadline. This stabilization period provides trading partners additional time to “build and validate interoperable systems and processes, manage products and data, and ensure continuity of the supply chain and product availability to patients.” Despite requests from various trading partners and organizations, the FDA has indicated frequently that it will not extend the stabilization period any further. 

7 Things to Know About EDDS Requirements

With the stabilization period ending in November, what exactly are the EDDS requirements trading partners must adhere to? Here are 7 things you need to know about Enhanced Drug Distribution Security requirements: 

  1. Product Identifiers are required at the package level. Each Product Identifier must contain a Standardized Numerical Identifier (Serialized GTIN), a Lot Number, an Expiration Date, and human-readable and machine-readable data carriers. 
  2. Systems must be in place to ensure electronic, interoperable-traceability. This is enabled by capturing “who buys what from whom” in Drug Transaction Records (DTRs), and assuring these records meet DSCSA regulations and industry application standards. 
  3. DTRs must be exchanged at each level of ownership as drugs make their way across the supply chain. Tracing information must be provided at the individual serialized level. Capturing and exchanging information at this level requires a common information framework; this “information framework” captures what happens in the physical world, and is essentially an information-encoded representation of packing and shipping events. EPCIS is the only FDA-recommended standard to support and enable electronic traceability. 
  4. Systems need to securely exchange, capture, and maintain the electronic DTR accurately, efficiently, and consistently among trading partners. Processes and systems need to be more accountable, transparent, and responsive to regulatory oversight. 
  5. Trading partners shall reconcile transactions; they must ensure product tracing information received electronically (Transaction Record) accurately reflects the packages of product the purchasing trading partner physically received (digital representation of the physical shipment). 
  6. Reporting and communication are necessary for true, accurate, and complete traceability. Errors and discrepancies need to be identified, communicated, and resolved within three business days. For recalls and suspect products, the DTR must be promptly generated upon request by the FDA. Additionally, partners must allow saleable returns only if they can be associated with the initial DTR. 
  7. The consequences of non-compliance are seismic, both at the business and personal levels. As we’ve already seen with counterfeit Ozempic, enhanced drug distribution security procedures can save lives. Punishments for non-compliance include seizure of goods, loss of license, civil and criminal violations, and imprisonment. 

It’s Time to Take Action

With the final phase of the DSCSA coming November 27th, ensuring you are prepared for enforcement is essential.  

See how Gateway Checker’s solutions can help you comply with updated guidelines, or contact our team with any questions.