FDA is delaying enforcement of the upcoming product identifier requirement under the Drug Supply Chain Security Act, but should this delay alter your plans?
This past June, FDA announced that the agency “does not intend to take action against manufacturers who do not, prior to November 27, 2018, affix or imprint a product identifier to each package and homogenous case of product intended to be introduced in a transaction into commerce as required by section 582(b)(2)(A) of the FD&C Act,” the agency writes in the draft guidance, “Product Identifier Requirements Under the Drug Supply Chain Security Act – Compliance Policy Guidance for Industry.”
Some in industry simply may not have been ready this fall. “With the various touchpoints we engage across the industry, including a recent poll taken at our Serialization webinar just this month, we continue to see a significant lack of preparedness,” says Justin Schroeder, senior executive director - global marketing & design, PCI Pharma Services. “The pharmaceutical companies and CMOs have simply been slow to react, and we are seeing the hockey stick effect on resource demand across the supplier market. The various organizations that have petitioned the FDA for this delay have brought attention that there are limited resources to call upon for this scale of an initiative, which is now at a fevered pitch. The body of equipment providers, integrators, EPCIS solution providers, IT and Operational consultants, as well as CMOs are stretched considerably thin and many are running substantially behind. At PCI, we are fortunate to have anticipated and foreseen much of this situation, therefore executing on a strategy to insulate ourselves. Despite our being ahead of the curve, it continues to be an ongoing challenge for the industry as a whole.”
Brian Daleiden, vice president, industry marketing for TraceLink, adds that “pharmaceutical serialization and the management of serialized product information is simply hard, and companies often under-estimate the time and effort needed for a company and its supply ecosystem to implement a serialization solution as well as the broad impacts they have to business operations. In particular, mid-sized and small companies that use contract manufacturing organizations (CMOs) are only just realizing the complexities of the task at hand, a fact borne out by several surveys from TraceLink and others highlighting that lack of readiness in the external supply ecosystem with CMOs is a key reason why some pharmaceutical manufacturers are not ready for 2017 DSCSA deadlines,” Daleiden continues.
It’s important to note that “the FDA’s enforcement delay does not change the deadline—it only means that companies have a one-year grace period before any penalties for non-compliance will be levied,” says Pete Sturtevant, senior director of industry development - Pharmaceuticals for GS1 US. “In the meantime, drug manufacturers should be driving forward with their work to meet the phase 2 requirements and continue to prepare their production lines for serialization. The transition takes time to implement, so this extension provides time for companies to put the necessary systems in place.”
This delay in enforcement—not in the deadline itself—is telling, believes Dave Harty, head of professional services – Americas, for software provider Adents. “Postponing its enforcement rather than delaying the official compliance deadline is a deliberate and very clear signal from the FDA that the law remains in place and is not going to go away or suffer multiple further delays,” he says. “After all, the law is intended to make the drug supply chain safer and, ultimately, save patients’ lives by protecting them from counterfeit medicines. It is more than likely that this suspension of enforcement for 12 months will entail a complete zero-tolerance approach in 2018 as anyone not in compliance would technically have been in violation of the law for a full year.”
So, should this delay alter your plans?
“We believe that drug manufacturers shouldn’t alter their existing plans,” says Daleiden of TraceLink. “The time is now to continue pushing ahead, not to hesitate or pull back. Acting now will ensure that scarce project resources assigned to serialization stay together and stay focused. Continuing the push to compliance will ensure that accumulated serialization knowledge is put to good use rather than fading away. Challenging investments in communication and coordination with supply partners will only pay off if the program continues moving, otherwise the pharmaceutical manufacturer risks having their supply partners refocus on other client needs. Finally, many of the most unexpected and most challenging to solve issues are only unearthed during the final stages of testing and go-live. Postponing current plans will only postpone the inevitable adjustments and rework involved in commercializing your serialization program.”
Jeff Benedict, senior vice president, global business development, Sharp Packaging Services, says that most of its current clients “are moving forward as planned to be ready for the original date. Sharp and the parent company UDG Healthcare have made all the upfront investments to ensure 80% of our lines are ready for the November 2017 date, and we are able to support up to 5 levels of aggregation.” He says that current and pipeline clients continue to focus on the November 2017 timeframe. “This will also allow the pharmaceutical companies to align with the wholesalers and their requirements,” he says.
John Jordon, PE, Vice President of Vantage Consulting Group, suggests that “clients continue their plans and schedules, but they do have time to ‘do things right.’ Interim solutions and inventory builds are probably no longer necessary; however, if a client has any lines that are not fully validated, they should finish them. It is probably not wise to put everything on hold for six months either. Put succinctly, there is an opportunity here for some course correction – but this should not stop any projects.
“For most companies, they can make smarter decisions on what they do when—but a considered approach and understanding of the guidance is required,” Jordon continues. “It should be kept in mind that there is no great delay here—regardless of the interpretation, there is inventory management to be done as well as returns management to prepare for. Once this is understood, each company should understand how these elements impact their plans.”
For “those pharmaceutical manufacturers with multinational product lines, the drumbeat of serialization and compliance reporting deadlines will keep getting louder as EU FMD, Russia, Saudi Arabia, Brazil, and other mandates quickly follow,” adds Daleiden. “For manufacturers that were at significant risk to making the DSCSA serialization compliance deadlines, all of the post-November 2017 pressures will still apply. What the enforcement discretion may provide to these companies is an ability, where they had to make significant tradeoffs and compromises in a rush to attempt to meet the deadlines, to quickly reexamine their current program. For example, some companies may have decided that they couldn’t afford the time to create an efficient, necessary integration between their line management systems, internal distribution systems, their 3PL’s systems and their enterprise serialization management solution, and were thus relying in the interim on manual data entry or spreadsheet uploads. Or these companies might have decided that creating an effective exception management system wasn’t possible in the time available. These companies may look upon the enforcement discretion as providing the necessary time to do things right for their long-term business success.”
But for “pharmaceuticals manufacturers with no solution installed yet, this is a tremendous opportunity as many that have made selections or decisions they have come to regret, but felt trapped by the deadlines and unable to make a change,” Harty of Adents says. “Now they can carefully rethink their decisions, learn from what has been happening in the industry all around them, and hopefully find a better way forward.”
And “those who are currently equipped will have the advantage of working though the learnings and impacts while not under a penalty threat to accommodate and adjust as needed, and will be in the best position to run their businesses in the most effective way once the enforcement period commences,” he adds.
Schroeder believes that “the one-year delay does provide manufacturers more time to revisit their strategies around aggregation. The 2017, now 2018, DSCSA deadline does not require product aggregation. However, PCI is a very strong proponent for the use of aggregation. From the experience we have gained having been actively serializing commercial drug product for the past five years, we see significant operational and logistical benefits for using aggregation. With a robust serialization system using online vision inspection, aggregation provides 100% assurance and verification of serialized products. Without that systematic assurance, operations are left to human verification, which is less than optimal and comes with inherent risk. Furthermore, downstream in the supply chain the use of aggregation provides all trading partners the opportunity to avoid the use of inference, a practice that also raises considerable amount of concern for accuracy and product security. Aggregation may add some complexity for initial implementation, but ultimately generates a much more robust and safe supply chain.”
PMP News asked FDA about the sort of enforcement drug manufacturers could expect if they are not compliant with the product identifier application requirements on November 27, 2018.
“According to the guidance, products not complying with the DSCSA requirements are considered misbranded. Companies marketing misbranded products may be subject to warning letters, seizure, injunction, fines, and criminal prosecution,” FDA Spokesperson Tralisa Colby tells PMP News. “However, the FDA is delaying enforcement of the product identifier requirements for manufacturers until November 2018 to provide manufacturers additional time and avoid supply disruptions.”
Sturtevant says that if drug manufacturers “haven’t already started, they should get going! The one-year grace period does allow time for companies to do an appropriate amount of pilot testing to make sure that their implementation systems work. For help, they can consult the GS1 US Implementation Guidelines, and a case study that shares learnings from a pilot program conducted by Johnson & Johnson Supply Chain (JJSC) and AmerisourceBergen Corporation (ABC).” He also points to GS1 US’s one-day Certificate Course , “Applying GS1 Standards for DSCSA” designed to help manufacturers, wholesale distributors, and healthcare providers prepare for the requirements of DSCSA. Additional industry resources are available from GS1 US here.
FDA has opened a docket for public comments on this draft procedural guidance. Stakeholders have until September 1, 2017, to provide input. Colby told PMP News that “the agency is interested in comments from all stakeholders about any aspect of this guidance relevant to the person or organization commenting.”
Dirk Rodgers, regulatory strategist for Systech, says that “we recommend that manufacturers comment on three things:
- Will one year be enough time to meet the serialization and verification requirements? If not, what is a sufficient time?
- What impact are the missing guidance on waivers, exceptions and exemptions, and grandfathering having on a company’s preparedness for this deadline?
- Seek better clarity on how FDA will enforce the 2017 requirements for drugs that are serialized during the middle of the one-year delay.”
Jordon of Vantage offers the following suggestions:
- Questions on specifics are warranted—such as what is the definition of “verified”?
- Most importantly—Does the inclusion of the word “intended” in the statement “product intended to be introduced in a transaction into commerce” mean that only product PACKAGED after Nov 26, 2018 (with the intention to eventually sell) must be serialized?
- Exactly what activities define when the manufacturer first engages in a transaction involving that product?
Daleiden of TraceLink says that “with respect to the compliance policy, it might be particularly valuable to share with the FDA how pharmaceutical manufacturers will handle hybrid inventory of mixed serialized and non-serialized drug products during the interim period of enforcement discretion. Insights such as how manufacturers will identify non-serialized drug packages [that] fall into the discretion timeframe, how this impacts other shipments of drug product and the creation of their associated T3 (transaction history, information, and statements), and how the T3 and other data may be used to help downstream trade partners understand and identify such affected products which relate to their own parts of the new compliance policy.”
Colby of FDA says the agency is planning “additional public meetings on enhanced drug distribution security to get input from supply chain stakeholders,” and refers stakeholders to this link: DSCSA law and policies.
In terms of other open dockets related to DSCSA, “on April 28, 2017 the FDA reopened the comment period for the Request for Information about pharmaceutical distribution supply chain pilot projects,” Colby adds. “The comments are due by April 30, 2018 and will further inform the design and development of the pilot projects that the FDA establishes under the DSCSA. Please see the DSCSA law and policies page for more information about guidance and policy documents and associated dockets.”
Concludes Schroeder of PCI: “While the announcement does provide the industry some ‘breathing room,’ and this is certainly welcome, the overall resource and continued investment for the overall pharmaceutical industry remains considerable. PCI has no intentions to slow down our serialization implementation and are actively encouraging our clients to proceed with their initiatives to ensure a seamless strategy execution. Many in the pharmaceutical industry will absolutely need this additional 12 months to be in a position to succeed by November 2018.”
Editor's note: An earlier version of this article quoted John Capants, P.E., portfolio director at Vantage Consulting Group; those quotes should have been attributed to John Jordon, PE, Vice President of Vantage. This correction was made July 18, 2017.
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