Saleable Returns Verification: What you need to know about enforcement discretion

Dan Walles of TraceLink discusses whether an enforcement delay on the next stage of the DSCSA is warranted



Pharma IQ
08/01/2019

Will the FDA announce a delay in enforcement?

We are aware of the speculation that the FDA may announce a delay in enforcement action for the DSCSA’s November 2019 saleable return verification requirement at the request of the Healthcare Distribution Alliance (HDA).

Reasons for the request include:

  • A lack of industry awareness around requirements.
  • Concerns that the Industry is not ready with their solutions and this could cause wholesalers to quarantine or destroy returned product as opposed to returning it to saleable inventory, leading to drug shortages.
  • Sensitivity around manufacturers sharing sensitive product identifier information with partners they do not have trusted, pre-existing relationships with.

The above concerns have led to discussions around a repeat of the enforcement discretion granted for both the lot level and serialization requirements of DSCSA. However, TraceLink believes these concerns are unwarranted among the majority of businesses that need to comply with the saleable return's verification requirements, citing several justifications for this position.

RELATED: We consider the readiness of the industry following the last DSCSA enforcement delay. Is this a repeat of 2018?

 

Awareness

The requirement for verification has been known since the DSCSA law was passed in November of 2016. Since then, there has been a significant amount of awareness and education directed at pharmaceutical manufacturers, including a number of webinars and seminars addressing requirements as well as guidance on preparing for the deadline.

Additionally, each of the big three wholesalers distributed letters to their suppliers in 2018 outlining their expectations and requirements.

 

Solution readiness

Solution providers, along with many in the industry, have been working to define the standards by which verifications are done. A set of standards around Verification Router Services (VRS) that will enable compliance with the law have been ratified by GS1 and solution providers are completing the interoperability testing that will enable these systems to communicate with each other.  In fact, as part of its overall development, TraceLink has been performing stress testing against its system and has simulated receiving ~700 simultaneous requests per second with an average response time of 370ms.

Although there are complexities in building a verification system, many of these have been addressed through the standards setting process and the remaining work lies in businesses choosing a vendor and getting started with implementation, standards development and training.

 

Sharing sensitive information

Product identifier information is sensitive, and unauthorized access to that data can create supply chain vulnerabilities.  However, the VRS standard accommodates the inclusion of a Global Location Number (GLN) that can be used to control which companies they respond to. Using this or similar identifiers such as DUNS, a solution provider is able to provide this control to its customers. 

By ensuring that each request is vetted against an approved list of companies and also providing functionality to perform a legitimacy check on each entity before it is added to the network, TraceLink’s VRS solution gives companies control over who they share their data with.

READ MORE: Download our report on five areas where serialized information could help you make smarter business decisions. 

 

Reasons to act now

Despite any enforcement discretion, the saleable returns verification requirement will still go into effect on November 27, meaning that companies could be liable for actions that have legal consequences.

Beginning on this date, the FDA will be looking for evidence that the industry is making a ‘good faith’ effort to meet the deadline and will want to know what each manufacturer is doing now to ensure that they can respond (within 24 hours) to any requests for verifications they might receive after November 27, 2019. 

Some MAH’s have stated that wholesalers will not be ready by the deadline, so they are questioning why they should act now.  This is a position that puts their business – and patients – at significant risk.  The saleable returns verification requirement was included in DSCSA to address a known supply chain vulnerability.   

The best way to demonstrate that commitment is to partner with a solution provider and start working to develop integrations, standard operating procedures (SOPs) and training plans.  This level of activity demonstrates that the MAH is doing what they can to meet their obligation to the saleable returns verification requirement.  The implementation of a VRS solution may take as long as six months and therefore, even if there was an enforcement discretion, waiting to comply is far too risky.  

The big three wholesalers have 300 – 600 suppliers each.  The earlier an MAH starts, the less time they will waste trying to get the attention of their wholesaler customers. This was a significant challenge when the industry went live with lot-level traceability and wholesalers simply did not have the bandwidth to onboard each MAH on their own timelines.

For smaller to mid-size companies holding off on preparing for the saleable returns verification requirements and planning to do everything manually, the lack of preparation presents a business risk, as wholesalers will simply return product for credit rather than waiting for manual verification, given the time it will take.

 

Is delaying compliance worth the risk?

Failure to act could result in a risk to patients and your product and corporate brand could be at stake if adulterated product enters the supply chain.  There is also a business risk from wholesalers that may decide to simply return the product for credit if you are not ready to receive verification requests.  We know some wholesaler will be ready.  Is that a risk they want to take?  

RELATED: At the recent FutureLink event, we found out if the industry is really ready to drive value from their serialization investment. Find out more here.

 

Dan Walles, General Manager, Track & Trace and Compliance, TraceLink
Dan Walles brings 15 years of experience in product marketing, sales and service delivery for the life sciences industry. Since joining TraceLink in 2010, Walles has been instrumental in educating customers on how to drive business value and better patient outcomes through information sharing and collaboration.

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