Drug Serialization Update
Drug manufacturers have until the end November 2018 to serialize and affix new 2D barcodes and human readable labels to all DSCSA covered prescription drug products manufactured for the US market. According to the HDA’s survey, and in conjunction with GS1, 93% of drug manufacturers will be ready to serialize by the November 2018 deadline. Other survey results, conducted with the nation’s leading drug wholesalers (Cardinal Health, Amerisource Bergen, and McKesson) in conjunction with GS1, spot checked label compliance in May of 2018 and found lower levels of compliance (20%) with the package serialization requirements. This can easily be explained by the sell-through of existing non-serialized product that will be, “Grandfathered” into the supply chain after the November 2018 requirement goes into effect. We should still expect to see non-serialized drug product within the pharmacy from now until roughly 2020, due to drug expiration dates and product dispensing velocity.
Resalable Returns in 2019
The biggest change Dispensers will experience in the near term is the November 2019 requirement for Serialized Drug Returns. In any given year, there are roughly 60 million salable drug return transactions processed in the United States representing over 6 billion dollars in drug inventory. The 2019 DSCSA Serialized Return requirement will require that drug, wholesalers can only resell a salable return if the drug product can be verified as authentic by the drug manufacturer. This requirement will have an outsized impact on healthcare providers especially if the pedigree history of the returned drug product is not straightforward. This will be further complicated by healthcare’s byzantine credit return timing and payment practices. The serialization verification process will entail wholesalers accessing the cross-industry verification routing service developed on a blockchain by Mediledger and the services routing requests to several, return serialization solutions providers representing US Drug manufacturers. Many of the return serialization solutions have also developed their solutions utilizing blockchain technologies and this represents the first large-scale inter-industry use of blockchain in the healthcare drug supply chain. As a backup, the drug manufacturers will also be setting up online portals for self-service verification which will result in incredible inefficiency as it relates to returns and credit processing. RXTransparent met with the major wholesalers to discuss credit impact of returns if the system worked perfectly. They are of the opinion that healthcare providers should not be impacted so long as drug dispensers can reference the original invoice number of the purchase. This requirement is straightforward for smaller health systems and should not be an issue. However, within larger IDN environments, with centralized distribution and multiple dispensing locations, the credit process could prove onerous if procedural rigor is not followed as it relates to returns. RXTransparent foresees a significant impact to Reverse Distribution organizations that work on behalf of healthcare dispensers to return and attempt to claim a credit on the behalf of the drug dispensers. The RXTransparent team will be investigating the development of a pre-verification enhancement to facilitate returns and credit processing in the future. Any customers who would like to provide requirements or feedback for these features please contact us via email.
HDA Looking for Input from Healthcare
Up until now, HDA’s membership has been comprised of mostly pharmaceutical manufacturers and pharmaceutical wholesalers. Colloquially, they would be considered a “boxes and barcodes” type of organization but now that requirements for DSCSA are halfway complete, it is essential for healthcare to be represented within this industry consortium. Over the next few months, RXTransparent will be reaching out to our GPO partners and customers to actively invite them into the HDA member community in an effort to round out the voices in the room.