Government legislation can have unintended consequences that impact businesses or entire industries. The Drug Supply Chain Security Act (DSCSA) is radically changing the pharmaceutical landscape; fortunately, the regulation is likely to improve the value companies are getting out of their pharmaceutical supply chain.
The purpose of the law is to improve the security of the pharmaceutical channel and reduce the risk of contaminated or counterfeit product reaching patients. It is the second piece of legislation contained in the Drug Quality and Security Act. The Act was signed into law in 2013 after an avoidable meningitis outbreak killed 64 people. Here are three ways the DSCSA will prove beneficial to the pharmaceutical supply chain:
1. Improves traceability and the patient experience
The DSCSA mandates that the pharmaceutical industry serialize and trace all pharmaceutical product in the channel. Serialization refers to a process wherein products are affixed with a unique ID that can be traced through the supply chain. Today, individual products are largely indiscernible from their peers. They can be expensive or impossible to pinpoint in a recall or to discern from counterfeit products. Counterfeit products represent a $163 billion to $217 billion global industry, and are responsible for an estimated one million deaths a year internationally. Improving traceability reduces the impact of counterfeit product, improves the patient experience, and (potentially) reduces or isolates the threat of litigation.
2. Gets rid of blinded and blocked data
Product serialization has the potential to revolutionize the pharmaceutical supply chain. It offers a depth of data-insight that has not been previously possible. Historically, trade managers have visibility into demand at distribution center locations, but that visibility quickly fades at the pharmacy level due to blinded and blocked data. Serialization has the potential to replace EDI 852 and 867 (product activity) data. It may completely illuminate data that was previously blinded or blocked. Serialized product data is likely to supplement or replace expensive sales data, leading to our third point: the DSCSA may lead to a reduction in revenue leakage.
3. Decreases revenue leakage
Pharmaceutical organizations and their data partners would be able to improve shipment forecasts, better meet demand, and identify leakage in the channel. Manufacturers could potentially marry their channel data to sales/Rx data. This would support the marketing arm of their organization. For example, shipments to a pharmacy could feed a promotional lift calculation. Sales into outlets could be reliably used as a means of sales force compensation. Serialized product data would empower returns management and reduce the cost of managing that process.
As the 2023 deadline approaches, manufacturers must consider who owns serialized data and how to marry it to existing processes. Serialized product data has the potential to flip existing means of processing trade and sales data on its head. Even though the deadline is a long way off, implementing these changes now will help you realize the full value of your pharmaceutical supply chain.
Exostar takes an “All-in-One” approach to meeting a Life Science company’s supply chain needs. We leverage years of experience in providing supply chain solutions in highly-regulated industries to improve supply chain performance within an organization or across multiple tiers of suppliers. From planning and logistics to transportation visibility, supplier onboarding, risk assessment, and information management, Exostar provides modular solutions to promote best practices and maximize ROI. Contact us today to discuss your Life Sciences supply chain needs.
Justin Flechsig is Product Marketing Manager for Exostar.