A Sustainable Approach to DSCSA Compliance for the Long Term

Specialty Pharmacy Times, November/December 2015, Volume 6, Issue 6

Specialty pharmacies must plan carefully to ensure compliance with new supply chain rules.

THE JULY 1, 2015, DEADLINE HAS PASSED, meaning that the Drug Supply Chain Security Act (DSCSA) is now in effect. This track-and-trace law means that all dispensers, including specialty pharmacies, must manage and maintain new and diverse compliance data about sales and shipments of pharmaceutical drugs moving through the supply chain to support the government’s crackdown on counterfeit and diverted drugs.

Lot-level traceability, product and transaction verification, and unit-level serialization are being instituted in phases starting in 2015 and will converge into end-to-end unit-level traceability by 2023. DSCSA is a complex regulation to meet.

In fact, it prompted the FDA to issue “enforcement discretion” at the end of June. It’s important to note that the FDA enforcement discretion did not postpone the statutory compliance date of July 1 for dispensers.

It simply highlighted that the FDA would not make targeted efforts to inspect for DSCSA product-tracing compliance with transaction history, information, and statement (T3) requirements.

As the FDA noted, the enforcement discretion does not block the FDA from executing verification procedures related to suspect product investigations which may require T3 compliance documentation from the dispenser, nor does it impact existing DSCSA compliance requirements for dispensers who resell drug product and fall under wholesale distribution provisions.

With time short and complexity high, many dispensers made hard decisions. Based on TraceLink’s experience through discussions with thousands of pharmacies, hospitals, and clinics in the period leading up to July 1, we estimate that 80% of dispensers just did what they had to do to meet the deadlines.

Most pharmacies, however, do not have a sustainable, truly effective DSCSA compliance system in place. This article will focus on how DSCSA affects dispensers, specifically specialty pharmacies, and discuss what dispensers should be doing now that the initial deadline has passed.

The challenge is to ensure that your compliance with DSCSA is thorough and sustainable, yet flexible, with a streamlined approach that lets you continue to spend your valuable time with your patients, rather than on administrative work to comply with DSCSA.

What Does DSCSA Mean for Specialty Pharmacies?

DSCSA has complex drug tracking, verification, and serialization regulations that impact your business and the ways you communicate with supply chain partners. At a high level, the July 1, 2015, deadline requires dispensers to:

  • Trace: lot-level transaction history, transaction information, and transaction statement documentation must be received for every product purchased and provided for every product sold. This is known as T3 documentation.
  • Verify: a dispenser must retrieve, analyze, and potentially, provide T3 documentation within 2 business days to state or federal officials during suspect product investigations and recalls, quarantine and investigate any product identified as suspect, and notify the FDA and supply chain partners of these incidents.
  • Retain: T3 compliance documentation must be kept in a secure repository for 6 years past the transaction date of the related products.

By 2020, DSCSA also mandates that dispensers purchase and sell only drug products that have been serialized, or uniquely identified, at the smallest saleable unit. In addition, new enhanced verification processes also come into force in 2020.

Specialty pharmacies often have unique business operations and supply networks compared with general purpose dispensers. A larger share of product may be purchased directly from manufacturers or from a diverse upstream specialty distribution network.

Smaller quantities of product may be purchased on a more frequent basis across a wider range of packaging configurations. Inventory levels for any given product are often kept lower than like levels at other dispensers.

These characteristics place unique burdens on specialty pharmacies under DSCSA, as each unique National Drug Code from each lot, in each shipment, from each supplier, must be accompanied by a matching T3 compliance document or the dispenser cannot accept ownership.

Complexity is high and risks may be significant due to shipment or data errors, particularly for shipments made just in time to meet patient demand. We will address these issues in terms of overcoming barriers to a sustainable compliance model.

Are You Just a Dispenser?

It is important to note that if you sell, trade, barter, or loan pharmaceuticals to another pharmacy, in addition to purely dispensing, you may also need to comply with wholesale distribution requirements for providing and archiving such T3 documentation. These additional compliance requirements impact the compliance system and supporting processes that you need to consider for your long-term sustainable compliance approach.

What is Sustainable Compliance and Why is it Important?

Sustainable compliance means turning DSCSA-related activities from a compliance project into a business-as-usual operational process that ensures the pharmacy can focus on serving the patient, not serving the compliance program. DSCSA creates complex operational process and data management effects across the specialty pharmacy operation.

Receiving, order fulfillment, returns processing, signing new suppliers, receiving emergency drop shipments, mergers and acquisitions, and information technology (IT) systems management are just some of the business and operational areas which are affected by DSCSA.

To enable sustainable compliance, a dispenser needs to not only prepare their operational processes and IT systems to meet core DSCSA requirements, but also must ensure they have the flexibility required to meet the numerous special provisions and exceptions related to diversity of data formats, data exchange methods, and trade partner relationship requirements.

The challenges are numerous in constructing sustainable business operations under DSCSA. We’ll discuss 3 key barriers that most dispensers face when planning sustainable compliance operations, along with guidance to overcome these barriers.

Barriers for Sustainable Compliance Operations

  • Receiving: The first hurdle to overcome is receiving. The DSCSA compliance data related to purchased pharmaceuticals may be received in multiple methods from suppliers. Some may provide Healthcare Distribution Management Association (HDMA) advanced ship notice (ASN)-based T3 data that has been customized on a per-supplier basis. Other suppliers may offer a portal which delivers DSCSA data for their products. Still, other suppliers may require you to receive paper T3 documents if you cannot integrate with their business system. The data contained in the T3 will vary based on the product received and its path in the supply chain. If your specialty pharmacy has more than one location, the compliance documentation may also be delivered to a location different than the one that receives the physical products. A dispenser may have implemented a bunch of manual and one-off processes to deal with this variability, and while these processes may be potentially compliant under normal circumstances, they can also be risky due to the diversity that pharmacy personnel need to deal with.
  • Data storage/organization: A second issue you will face is how to archive the compliance documentation and organize it for business or compliance access. Access to T3 documentation will be required across a variety of inspection, verification, and resale activities, plus archiving for 6 years is required by DSCSA, so storage and access have long-term ramifications for your pharmacy. If you are receiving data in multiple ways, you are going to need to think about organizing all of it. Will you have one central storage location or multiple repositories? How will you mesh data of multiple different formats? If some of the data is provided in one or more supplier portals, are the suppliers archiving it for you in your own separate repository? If an inspection or verification request comes in, which process and system will help to provide the needed answers in the short time frame required? When you resell product, can you retrieve the appropriate T3 for the product you purchased? Many pharmacies haven’t figured out a long-term repository strategy that meshes with their daily operational needs and minimizes compliance risk.
  • A changing landscape: The major challenge is change; this includes variations in regulations, supply network preferences, and diversity of suppliers over time. With DSCSA, regulations will evolve as different requirements come into play. The FDA will continue to fine-tune guidance on interpretations of DSCSA related to issues, such as 340B programs and verification procedures. Suppliers will continue to evolve their data exchange approaches, increasingly shifting from paper to electronic, modifying data formats based on HDMA ASN, implementing initial Global Standards One Electronic Product Code Information Services connections, and changing product and partner data contained in the T3 documents. This shifting landscape threatens continual churn in specialty pharmacy operations and supporting IT infrastructures. In addition, your business will evolve as you take on new product lines, establish relationships with new suppliers, or open new locations.

DSCSA will continue to evolve for several years to come, and pharmacies need to determine how they will embrace and plan for this variability.

In Pursuit of an Integrated, Comprehensive, Flexible DSCSA System

In the quest for a sustainable compliance model that minimizes administrative work related to DSCSA and keeps pharmacy personnel focused on the patient, a dispenser should aim to implement a compliance system and supporting processes which ensure simplicity, flexibility, reliability, and extensibility. The system should simplify the DSCSA compliance process for your pharmacy. Your DSCSA solution should minimize the number of compliance data connections you need to manage and maintain.

The system should also enable a central DSCSA compliance repository that is accessible to all required pharmacy personnel and provides a common set of tools for data storage, acquisition, and review, regardless of product or sourcing supplier. Flexibility is crucial in dealing with DSCSA variability.

A flexible system should be able to capture and verify T3 transaction data received across any of the dozens of ASN permutations developed by suppliers, while ensuring initial verification of data elements across the numerous T3 structures, from direct purchase to drop shipment.

Since paper will be an ongoing challenge for the near future, the system should eliminate paper, wherever possible, and enable a consistent record management and compliance process, even if paper T3 documents are received. The system also needs to seamlessly manage unexpected issues, such as emergency drop shipments.

Being out of compliance is not an option; therefore, reliability is paramount. Pharmacy personnel don’t have the time to continually monitor changes in DSCSA regulations, FDA interpretations, and supply network implementations, so the system implemented should be designed to keep in step with DSCSA change without intervention by pharmacy staff.

The system should have redundancy built-in to ensure staff always has access to the compliance system when needed and a backup archival capability to protect crucial compliance documentation. Finally, cost-effective extensibility is key for ensuring that the compliance system keeps pace as the specialty pharmacy grows without overinvesting in near-term idle capacity and capabilities.

Extensibility is also important in managing the growing DSCSA data management challenge. Because of the 6-year record requirement, even if a pharmacy’s operations didn’t expand, data storage requirements would continue to grow and a specialty pharmacy could be faced with management of tens of thousands of T3 compliance documents.

As a specialty pharmacy dealing with the long tail of DSCSA compliance documentation—the infrequent, yet complex issues that arise—it is also important to work with a compliance partner that can deliver regulatory expertise. You have a vital role in the supply chain and your relationships with patients are probably closer and more intimate than they would be with typical pharmacy patients due to the nature of the drugs you administer.

Implementing the right DSCSA system and working with the right DSCSA compliance partner will keep you from having to choose between managing requirements and caring for the patients who need your help. SPT

BRIAN DALEIDEN is vice president of industry marketing at TraceLink. In this capacity, Brian leads the company’s thought leadership, global regulatory analysis, and market education programs that help industry stakeholders understand and respond to emerging regulatory, business, and technical requirements. Brian guides the TraceLink Cloud Community of industry leaders from across the global life sciences supply network. He holds an MBA from Vanderbilt University and a BS from the University of Wisconsin.