DSCSA – Let’s Step Back and Recap

Over the past year, we’ve devoted a lot of space to covering the impact of the Drug Supply Chain and Security Act (DSCSA) across the entire pharmaceutical supply chain. We’ve covered the topic from a variety of angles, and we realize it’s a lot to digest. We thought it would be a good idea to revisit and summarize what we’ve covered thus far, which primarily focuses on Phase I compliance. Deadlines may have shifted, but the very last one to be met is still exactly the same as when the law was enacted—full compliance is required of every entity along the supply chain by November 27, 2023. That may be over two years away, but for many of you there’s still a lot of work to be done.

Let’s run down some of the big-ticket issues to be aware of.

All Creatures (Pharma Distributors) Great and Small

The DSCSA makes no distinction between small, medium, and large companies. The rules apply to everyone, from single-outlet family owned pharmacies to The Big Three distributors. Still, it’s the small and medium wholesalers and distributors who have the biggest challenges ahead of them.

First, these are the companies most likely to have an outdated ERP system. Relying on old tech is a dangerous, and costly, proposition. Any allocation of funds toward maintaining an infrastructure nearing the end of its service life is an ineffective way to spend money. This is especially true for locally hosted software, which requires costly downtimes to update and may not be as secure as it should be. As regulations are ever-evolving, software needs to be able to do the same.

This is more easily achieved with a cloud-based solution, where updates happen behind the scenes and with no effort by its users. With a pharma-focused ERP, compliance issues become something you’ll need to be aware of, but not necessarily have to do anything about because the developers will see to it that its customers don’t need to worry. And cloud software has the benefit of flexible pricing based on a company’s size and usage, putting big business tools in reach of the smaller companies. This keeps every entity under the purview of the DSCSA on a level playing field.

Keep it Simple

That’s easier said than done, of course, especially with a complicated law that requires complex systems to maintain compliance. Here, simple means not overly complicating your own infrastructure. Small and medium distributors are most prone to this. Smaller budgets, fewer staff members, and limited resources are the classic recipe for an ad hoc environment where disparate solutions are cobbled together, a kind of digital Rube Goldberg machine.

This speaks again to the importance of a cloud solution. No special or new hardware is required to implement a cloud solution. There’s no extra effort to ensure that your people can use both desktops and mobile devices to access the system. Your IT staff won’t have to schedule downtimes or solve problems if something’s not working right. It’s just a single, integrated business system handled by the software provider, which is as simple as it gets—and the key to the long term sustainability of any solution.

Upgrades All Around

Along with tech upgrades, you can expect to take a long, hard look at your internal processes. While cloud software might always have the latest tools available for your use, it doesn’t make much difference if you’re running business as usual out in the non-software world.

A case in point is the way DSCSA requires you to stay on top of your trading partners’ compliance, too—specifically, around state and federal licensing. The short explanation of this is that if you transact any business with another company that’s got lapsed or expired licenses, you’re on the hook for a violation, as well. Software can be helpful in alerting you to this, but as we discussed here , there are a few measures you can take to be proactive and stay ahead of this issue.

Work Well With Others

The biggest goal of the DSCSA is in establishing a way to exchange transaction data in a “secure, interoperable, electronic manner.” Based on a pilot program completed in 2019 by some big players in the industry, blockchain technology is far and away the most promising way to accomplish this. The technology itself is inherently secure—saying blockchain is secure is like saying a ball is round—but it has the added benefit of being ridiculously fast for the task at hand. The pilot demonstrated that the time it took to trace a drug sped up from 16 weeks to 2 seconds.

Suffice to say blockchain is likely very much a part of the pharmaceutical supply chain’s future. It’s complex stuff, so no one’s expected to become an expert on it, but you should know enough about it to be able to make sure your ERP is up to the task of connecting to the blockchain.

You’ve Got Two Years to Do This

Again, two years may seem like a long time to get things in order, but don’t get complacent. It’s worth remembering that the DSCSA itself was enacted eight years ago—we’re 80% of the way to the finish line. When COVID hit, some deadlines were moved around to account for the disruption to the world’s medical communities. To start fiddling around with the pharmaceutical supply chain on top of that was a dangerous proposition, and so distributors were granted certain exemptions—but there are reasons to be wary of relying on these to give you breathing room.

If you’ve been procrastinating on compliance, your best bet is to buckle down and act as if everything needs to be in place now. And maybe find a knowledgeable tech partner who can steer you in the right direction.