Three Ways the DSCSA Will Unlock Value in Your Supply Chain

Government regulation of industry often has unintended consequences that impact or strain the businesses involved. 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, signed into law in 2013 after an avoidable meningitis outbreak killed 64 people.

Many firms within the pharmaceutical industry are dragging their feet and scrambling to meet deadlines, but it's very likely the DSCSA will prove beneficial to their supply chain:

1.     Improving 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 -- this makes pinpointing illegitimate product during a recall expensive or impossible.

Counterfeit products represent a $163 billion to $217 billion global industry, and are responsible for an estimated one million deaths a year internationally. The US is not immune to the counterfeiting epidemic, as cancer patients prescribed Avastin may attest. In 2012, the FDA was forced to intervene when the illegitimate firm “Montana Health Care Solutions” offered Avastin at a discount of almost 25%; the Avastin knockoff did not contain the main ingredient, bevacizumab, and resulted in patients not receiving needed therapy.  Years earlier, counterfeit Heparin from China killed 81 Americans.

By improving traceability you reduce the impact of counterfeit product, improve the patient experience, and (potentially) reduce or isolate the threat of litigation.

2.     Gets rid of blinded and blocked data

Product serialization has the potential to revolutionize the pharmaceutical supply chain, offering 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 and may completely illuminate data that was previously blinded or blocked.

Serialized product data is very likely to supplement or replace expensive sales data, ultimately leading to our third point: the DSCSA may lead to a reduction in revenue leakage.

3.     Decreases revenue leakage

Serialized product data would empower Pharmaceutical organizations and their data partners to improve shipment forecasts, better meet demand, and identify leakage in the channel. Manufacturers could potentially marry their channel data to sales/Rx data and 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 support returns management and reduce the cost of managing that process.

As the DSCSA moves towards its final deadline in 2023, manufacturers would be wise to consider who owns the serialized data and how they intend to marry it to their existing processes; serialized product data has the potential to flip existing means of processing trade and sales data on its head.

Justin Flechsig is the Life Sciences Product Marketing Manager for Exostar, A Gartner Cool Vendor for Identity and Access Management services in highly regulated industries.

Original Source: 3 Ways DSCSA Improves the Value of Your Supply Chain