The complexities of the U.S. supply chain combined with the fundamental requirement of all organizations – large and small – to exchange data electronically is chartering new ground in the industry.
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On November 27, theDrug Supply Chain Security Act (DSCSA) stabilization period ends. Signed into law in 2013 by President Obama, the DSCSA, which is managed by the U.S. Food and Drug Administration (FDA), aims to prevent harmful drugs from entering U.S. supply chains, detect harmful medicines if they do enter the supply chain, and enable rapid responses to remove dangerous drugs from supply chains to protect patients’ health. Fast forward to today and we are almost one year removed from when the final milestone of the legislation went into effect on November 27, 2023.
As November 27, 2023 approached, it was clear that the industry was not ready. To ensure that medicines could continue to flow through the supply chain and reach patients, the FDA announced a twelve monthstabilization grace period with guidance to the industry to use that time to work through issues and the exception management process.
With November 27, 2024 just a few days away, the industry is still working diligently on its projects, but as expected, not all supply chain stakeholders are ready. The complexities of the U.S. supply chain combined with the fundamental requirement of all organizations – large and small – to exchange data electronically is chartering new ground in the industry. In recognition of this complexity, the FDA announced a phased set of milestones between May 2025 and November 2025.
Dan Walles is the General Manager and VP of Traceability and Compliance Solutions at TraceLink.TraceLinkHealthcare and pharmaceutical packagers are essential to the success of DSCSA. The interface between the physical product and its digital twin created by compliance is the printed product identifier encoded in a 2D barcode. That barcode and parent case and pallet labels are used repeatedly throughout the supply chain. In addition, the availability of serialized product and compliance information starts with the pharmaceutical manufacturer. Issues or inconsistencies in either of these areas can cause significant disruption in the supply chain leading to product availability delays, additional handling fees, or even potential fines.
Most pharmaceutical companies have been serializing products for a number of years to meet the DSCSA requirement or to meet similar traceability requirements in other countries. Your executive team might be asking, “We have been serializing for years, are we not done?” Here are three questions every healthcare packaging leader should be prepared to answer.
Is the industry ready for DSCSA EPCIS data exchange?
The answer to this question is both an emphatic ‘Yes’ and ‘No.’ Most pharmaceutical manufacturers have been integrating to their customers in preparation for the deadline. Part of that process is to exchange DSCSA EPCIS (Electronic Product Code Information Services) test files to ensure that they conform to regulatory and trade partner requirements. However, often these files are the result of running a highly controlled process and may not represent data generated from a real production process. In addition, the receiving trade partner may have only been performing a first-order check of the file rather than fully ingesting it and incorporating it into its processes. For the pharmaceutical manufacturer to be fully ready, they must ensure that the DSCSA EPCIS data that they are exchanging is well-formed and received, but that no subsequent data errors lead to process disruptions or delays. One area causing challenges is the variation in how manufacturers use aggregation and define it in the EPCIS file. These areas must be resolved before the industry can claim it is ready for prime time.
How can DSCSA be operationalized?
As the industry moves closer to readiness, manufacturers have to establish their systems and processes around operationalizing compliance. Many are under the misconception that the deadline represents the finish line. But in reality, the deadline is really just the start. Post the DSCSA deadline, for the distribution of medicines to be fully compliant, not only does the physical product have to be in good standing (i.e., not damaged, not part of a recall, maintained at the proper temperature, etc.) but the delivery and availability of the corresponding electronic DSCSA information must be in place as well. To truly operationalize the DSCSA process, organizations and their trade partners must define their systems and processes for managing exceptions.
Considerable effort has gone into defining the types of exceptions that could occur under DSCSA, with organizations like the Healthcare Distributors Alliance (HDA) and Partnership for DSCSA Governance (PDG) leading the way in establishing industry guidelines. With these guidelines in place, pharmaceutical manufacturers must ensure they have the systems and processes to handle exceptions efficiently, as shipments often cannot be legally received until an exception is resolved. Given the experience with the EU Falsified Medicines Directive, where 7% of shipments faced exceptions after go-live, the complexity of DSCSA could result in similar or even higher exception volumes.
Operationalizing DSCSA requires not only these exception management systems but also robust serialization, data exchange, and collaboration across the supply chain. By implementing track-and-trace technology, compliance frameworks, and automated reporting, companies can quickly address exceptions and ensure smooth operations. Analytics further support DSCSA by identifying exception patterns and systemic issues, creating a comprehensive approach that enhances traceability, efficiency, and patient safety across the supply chain.
Is there any hope of a return on the compliance investment?
Investing in compliance through serialization and traceability offers a clear return by optimizing the recall process, reducing costs, and enhancing brand trust. With serialization, companies can quickly locate specific product batches, allowing for targeted recalls that minimize waste and protect reputation. Enhanced traceability also provides insights into inventory management and product lifecycle, preventing overproduction and improving stock efficiency. Additionally, reliable recall capabilities and proactive compliance foster customer confidence and loyalty, while the operational data from serialization enables predictive analytics to streamline processes and reduce bottlenecks. Altogether, compliance investments in serialization and traceability generate both financial and operational returns.
Dan Walles is the General Manager and VP of Traceability and Compliance Solutions at TraceLink.TraceLink
