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?  

Revisiting Florida’s Plan to Import Drugs from Canada

Posted by bryan hanley On October 23, 2024 at 11:07 am | Comments Closed

An FDA-Approved Plan with Major Implications

Earlier this year, the FDA authorized Florida’s proposal to import select drugs from Canada under section 804 of the FD&C Act. The law allows companies to import prescription drugs in bulk if doing so saves Americans money and doesn’t put the health and safety of Americans at risk.

According to the office of Florida Governor Ron DeSantis, the proposal will save the state an estimated $180 million annually. More specifically, this program will reduce the price the state pays for medications used by certain groups, including older populations, foster children, and incarcerated individuals. Florida will begin with importing small cases of chronic medication, including those treating HIV/AIDS, mental illness, prostate cancer, and urea cycle disorder.

The FDA has emphasized that for Canadian drugs to be imported into the US, Canadian partners and American companies receiving them must adhere to additional security requirements. These include specifying the drugs they plan on importing, verifying drug authenticity and compliance with FDA-approved specifications, and relabeling these drugs in accordance with FDA policy.

Not Everyone Sees the Potential Benefits 

However, despite the cost-saving claims from Florida as well as the FDA’s approval of the change, many question the decision and the proposed benefits. Many experts believe this policy change will not solve the high-price issue of prescription drugs in the US. Critics argue the Canadian drug supply is too small, which means the change will not only have a minor impact on price reduction in the US, but could lead to major shortages throughout Canada. Four days after the policy change, the Canadian Government released the following statement:

“The Government of Canada is taking all necessary action to safeguard the drug supply and ensure Canadians have access to the prescription drugs they need and has been clear in its position: bulk importation will not provide an effective solution to the problem of high drug prices in the US.”

Accordingly, prominent members within the pharmaceutical industry have counteracted against the ruling; Stephen Ubl, President and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), believes the ruling has detrimental implications on American pharmaceutical supply chains. “The importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” Ubl claimed following the approval.

What Does this Mean for Compliance?

As to how these Canadian imports will comply with DSCSA Requirements, in particular Enhanced Drug Distribution Requirements, remains questionable. With Enhanced Drug Distribution Requirements delayed for connected trading partners in the US, will Canadian pharmaceutical manufacturers be expected to fully comply with DSCSA in November or will they be eligible for additional time for completion?

Is anyone aware of any Canadian pharmaceutical importation plans or activity since the policy change took effect in early January 2024?  Have Floridians spent $50 million implementing the plan? If yes, how did that ‘investment’ benefit American patients? Since more states may adopt a similar policy in the future, understanding fiscal costs and benefits is essential.

Finally, though Canadian imports must meet additional drug security requirements, will counterfeiters see this policy change as a money-making opportunity? Considering the numerous instances of domestic counterfeiting, we can’t count this out as a possibility.

Beware of Counterfeit Ozempic, says FDA

Posted by bryan hanley On October 15, 2024 at 1:05 pm | Comments Closed
Authentic Ozempic needle side by side with a fraudulent needle

Counterfeiting: A Major Issue with Drastic Consequences

On October 2nd, the FDA released an article highlighting the risk of unapproved weight loss drugs, including semgalutide and tirzepatide. These drugs pose a major risk to patients due to their lack of quality assurance. 

Illegally marketed versions of these drugs have infiltrated pharmaceutical supply chains, most notably, Ozempic. Counterfeit versions of the drug have been marketed as authentic, but could contain too much, too little, no active ingredient, or harmful ingredients. These illegal drugs pose a risk to consumers; in fact, according to a December 2023 report, 2 people died and three people were hospitalized after consuming counterfeit Ozempic.

Another DSCSA Delay

The FDA October 9th that they were delaying implementation of Enhanced Drug Distribution Security requirements, along with other requirements of section 582(g) of the Drug Supply Chain Security Act. This compliance extension would only be for trading partners who have made a documented attempt to complete data connections with immediate trading partners, or those who are already doing so. 

The FDA has emphasized the decision came from a concern over potential drug supply shortages. In the release, the FDA referenced trading partners’ struggles “resolving issues involving missing or erroneous data in electronic DSCSA transaction information and transaction statements” without delaying product distribution (including those in shortage) downstream. 

The concern for preventing supply shortages downstream is real. Preventing shortages can help minimize the risk of counterfeit products, given how shortages lead to higher rates of counterfeits as consumers are willing to pay higher prices for goods. However, what’s also important to consider is the reason behind creating Enhanced Drug Distribution Security (EDDS) requirements in the first place. 

Counterfeit Crisis: DSCSA’s Role

The Enhanced Drug Distribution Security requirements under the DSCSA were created for instances like this. Counterfeiters have become increasingly deceitful in their craft: packages with authentic lot numbers and detailed inventory trails make it very difficult to determine the legitimacy of drugs. Sight alone is simply not enough to authenticate legitimate drugs from counterfeits, especially for end consumers—just look at the image above!

Enhanced Drug Distribution Security requirements drastically reduce this risk, mandating product-level traceability and interoperability. Flagging down counterfeit Ozempic is much easier to do with EDDS requirements in place; the FDA delaying these requirements again could pose risks similar to what we’ve seen with Ozempic. 

While it’s essential to acknowledge the FDA’s commitment to preventing drug shortages, delaying EDDS requirements may bring about its own consequences.

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?

HDA DSCSA Guidance

Posted by bryan hanley On October 9, 2024 at 12:36 pm | Comments Closed

Following the recent HDA Traceability Seminar between August 26th-28th, I had the opportunity to lead a conversation amongst dozens of pharmaceutical partners and solution providers; we discussed various important topics related to the DSCSA, from Waiver, Exception, and Exemptions, to Verification Routing Services, and more. Emphasizing the importance of transparency and open conversation, I thought I’d highlight some important insights.  

It’s All About the Data

The FDA understands there are conflicts in terms of data quality and integrity. Downstream integrity is impossible without manufacturers ensuring their data and products align with updated standards. The FDA has stressed the importance of pharmaceutical partners, particularly manufacturers, meeting these standards by the end of the stabilization period (next month). However, for certain exceptions, including product/no data, WEEs must be considered.  

Waivers, Exceptions, Exemptions

Since mid-June, there have been over 324 requests for package-level requirements WEEs, with more likely to be submitted as we approach the deadline. Dispensers are most frequently requesting WEEs, followed by wholesalers, manufacturers, and repackages. The issue many partners are experiencing is that downstream partners cannot get accurate data from suppliers without upstream partners providing it to them efficiently. The FDA believes it is adequately staffed to handle WEEs, and if they find consistent requests for handling WEE scenarios, they will announce how partners should handle them.  

Easier Said than Done

Navigating the complexities of Waivers, Exceptions, and Exemptions is oftentimes easier said than done. While the FDA has provided various recommendations for handling tricky exceptions, oftentimes, partners still find themselves facing challenges in practice.  

VRS on the Rise

VRS is gaining popularity as an effective means to ensure interoperability between supply chain partners, helping pharmaceutical partners conform to product identification and authorization requirements under the DSCSA. Apart from saleable returns for pharmaceutical partners, VRS can provide additional verification in medical emergencies, though it’s not intended to bypass EPCIS verification.  

If you have any questions about these insights, please don’t hesitate to contact us.