More than 10 years ago, Congress passed a law designed to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. Up until now, it has never been fully enforced because drug manufacturers and distributors kept making the case that they lacked the capacity and the software capabilities to come into full compliance.
As of November 2024, time’s up. And the industry needs to be ready.
Congress passed the Drug Supply Chain Security Act (DSCSA) in 2013. It requires interoperable, electronic tracing of products at the package level, so they can be identified and traced as they are distributed throughout the country. This demands a lot of wholesale distributors and third-party logistics (3PL) providers, who will have to not only meet national licensing requirements but will also have to report information annually to the Food and Drug Administration (FDA).
On the ground, the requirements of the law will be especially demanding. Consider a pallet that contains 100 cases of pharmaceutical products – with 10 or 15 of those put into an outer case, some of which get shrink-wrapped to be shipped to a Walgreens or CVS warehouse. The pallet will travel from the manufacturer to the distributor to a carrier to the warehouse, and then to the store, and finally to the end consumer. In accordance with the DSCSA, the FDA is going to require at every point in the process that those in the supply chain ensure no one counterfeits or steals the drugs – and that none of the drugs are expired by the time they reach the consumer.
Compliance with the act requires that we be able to trace lot expiration numbers and serial numbers at every packaging level, whether we’re talking about the entire pallet or what’s inside the pallet. The FDA may well send an inspector to make sure the serial numbers are genuine. And it’s going to demand that distributors track the status of what’s happening with that medicine at every point in the supply chain, including a reporting of serial numbers to a national serial number repository.
When the law was first passed, manufacturers protested that they lacked the capacity to report every single serial number, and that it would take considerable time to upgrade their software to handle such a requirement. The FDA relented, and said that for the time being they would only have to report lot numbers. The exception was supposed to expire at the beginning of 2023, but the pharmaceutical industry protested again – saying that the aftermath of COVID had not left them time to prepare. That got them a one-year extension.
There will not be another one. Come November 2024, any FDA inspectors can show up at any point in the process of transporting pharmaceuticals and demand to see how many products are present, as well as their lot numbers and their serial numbers – how many were shipped out and how many were received. If the information doesn’t comply with the requirements of the DSCSA, the inspector can and will shut everything down – and potentially charge a felony. If we’re talking about controlled substances or Schedule 2 drugs, these could be very serious charges.
This is where Warehouse Management System (WMS) providers help keep you compliant. WMS companies have been hearing from the supply chain industry over the last several years that it urgently needs software to handle these important requirements. There are industry-leading WMS providers that are already putting strategies and plans in place so that their clients are ready and compliant when the DSCSA deadline comes.
Companies involved with any step of this process need a WMS partner that is knowledgeable and reliable. Companies need to look for WMS solutions that provide the capacity to do all the reporting after the drugs are picked, packed, and shipped. It’s also important to consider WMS vendors that have integrations with top serial number repository managers in every country. Note that there will be differences in the standards between the United States and the European Union, which has its own DSCSA equivalent that works a little differently. The ability to handle temperature-sensitive and time-sensitive inventory – both of which are critical when shipping drugs – is also a very crucial aspect to keep in mind. A matter of just a few seconds can cause a drug to expire, and a WMS that doesn’t account for that will leave the company and the end user in a bad place.
Onboarding is another factor to keep in mind. All WMS providers have onboarding processes, but companies need to be aware that a WMS partner has to understand your unique business needs and requests, making this step a crucial one. Time is of the essence, and a smooth process to quickly and correctly onboard users is paramount as full enforcement is less than nine months away.
Partnering with an agnostic and flexible WMS provider also allows for companies to adjust in real-time. The ability to deal with nuances in regulation, such as the manner in which certain vaccines are required to be packed and shipped, is a hard thing to accomplish when many things can go wrong with pharmaceuticals. Flexible WMS solutions also allow the ability for companies to scale for growth, as one merger/acquisition can take a pharmaceutical company from multibillions to multitrillions. If the WMS software isn’t robust enough to handle that growth quickly, the newly merged company will have considerable problems with compliance and execution.
Any company that is thinking of developing its own WMS software to handle compliance with DSCSA needs to understand right now: It’s too late. There is no way to achieve compliance unless you’re working with an experienced and knowledgeable company that has already thought this through and has the WMS software ready for you.
The industry has had 11 years to prepare for full enforcement of DSCSA, and industry-leading WMS vendors have already prepared for this. Now manufacturers, distributors, and 3PLs have to start onboarding whichever WMS solution they’re going to use. Because once November arrives, it is clear the FDA’s patience will run out.
