DSCSA enforcement delay: what you need to know

The sense of relief was palpable earlier this month when the FDA revealed a delay to the effective compliance date with the Drug Supply Chain Security Act (DSCSA), but what lies beneath the top-line news?

First and foremost, it is important to understand that the DSCSA remains unchanged, with the requirements for marketing authorization holders still coming into effect on November 27, 2017. The FDA has only committed to not levy fines or other enforcement actions against manufacturers who do not affix product identifiers to packs and homogenous cases of commercial product until November 27, 2018, and do not verify the product where required under the DSCSA's original timeline.

Manufacturers and downstream trading partners still have to verify after November 2017 this year if serialized products are suspect or if they receive a request from the FDA. That means of course that if a manufacturer does place serialized product on the market on or after 27 November 2017 – regardless of the additional one year grace period – it must have all systems in place to handle queries from authorities on that serialized product.

It's also important to note that the FDA has only issued draft guidance on its intention to delay enforcement, and there are still a few weeks of comment to go before that is confirmed, according to Systech's regulatory strategist Dirk Rodgers, who presented a webinar on the implications of the DSCSA yesterday.

"Apparently, the FDA received comments and feedback from manufacturers and other trading partners expressing concern with industry-wide readiness for implementation of the product identifier requirements for manufacturers," he said.

Specifically, stakeholders have described challenges with the product identifier requirements due to a limited number of vendors that have the relevant expertise for data management or equipment for packaging or manufacturing lines, as well as the readiness of contract manufacturers.

A survey conducted by SEA Vision and Zenith Technologies – conducted ahead of the DSCSA delay announcement - suggested that 40 per cent of pharma industry professionals are not confident that they will meet serialization deadlines in the US and EU, although they did not drill down to test readiness for the EU and US deadlines separately. Just 18 per cent of those that took part in the survey said they were "extremely confident" that they will meet impending track and trace deadlines.

The enforcement delay effectively gives manufacturers an opportunity push non-serialized product into the supply chain for an extra year, until November 26, 2018 and the FDA has also pledged not to take action against repackagers, wholesale distributors or dispensers who engage in transactions involving these products - with no set time limit.

The question is, how would these parties know when the packs were introduced into commerce during the enforcement holiday, i.e. from November 27, 2017 to November 26, 2018 inclusive? FDA's guidance says it wants them to use other means - such as transaction information or other documentary evidence such as commercial or shipping invoices or bills of lading - to make that determination.

"If the original manufacturers shipping date to the first buyer...falls outside those dates, you should not take possession of the drug because it does not qualify for [enforcement] discretion," according to Rodgers.

As it stands repackagers still need to meet the 2018 deadline to affix product identifiers to packs or homogenous cases as before - although Rodgers said it is possible that may be subject to change as it seems a little unusual that all other supply chain actors enjoy an enforcement delay.

The respective deadlines for wholesalers and dispensers to ensure packs they receive have product identifiers are 2019 and 2020, respectively, under the DSCSA wording. However, the latest guidance suggest they will have to do so for repackagers in 2018, which seems a mismatch and may be an error.

Finally, where product does have a product identifier, FDA expects trading partners to use it in verifying product during the one-year delay.

The FDA has promised to publish its long-awaited guidance on grandfathering - in other words how it intends to handle products manufactured prior to November 27, 2017 - and has said it will explain how grandfathering will be affected by the new compliance policy.

Interestingly, the SEA Vision/Zenith Tech survey found that just 43 per cent of companies surveyed were already supplying serialized products to other markets where regulations are in place, so for many the DSCSA and the FMD are the first step toward serialization.

As a result, they suggest that reliance on implementation partners will increase, and that this "brings about new challenges as demand may surpass capacity as the deadlines draw closer." It is estimated that an average serialisation implementation can around 18 months so for manufacturers who are not yet starting the process even the November 2018 enforcement date will be challenging.

To follow are some comments from serialization experts on the implication of the enforcement delay:

Mark Davison – Blue Sphere Health

"We’re advising late-adopters to use the extension wisely - there is still a lot to do to be ready by November 2018. This delay should not be seen as a one year financial holiday."

Steve Wood – CEO of Covectra

"We believe that this delay will allow for a more orderly implementation of serialization technology, particularly by the smaller pharma manufacturers and CMOs who would have had difficulty being ready by November 2017. Also, this will allow more time for pilots to be conducted by the 3PLs and distributors to test interoperability with the brand owners. In summary, we see this as a positive move by the FDA."

Dexter Tjoa, Director Corporate Strategy, Tjoapack

"It is important to note that the DSCSA regulations do remain in effect and the serialisation requirements for manufacturers still become effective on 27 November 2017. The FDA only intends not to act against non-compliance. In practise, I expect this means that they will not actively probe for non-compliance and will judge any non-compliance incident on a case-by-case basis. However, the FDA can still enforce the regulations and associated penalties from November 27 onwards."

Carlos Machado, Serialization Director at SEA Vision US.

"The delayed enforcement date for the DSCSA provides pharmaceutical manufacturers who are lagging behind or those who are yet to make a start in implementing a serialization solution with bonus time to ensure they are compliant. The decision to delay as a result of concerns over industry wide readiness reflects findings from our recent research that revealed technology selection as the biggest hurdle facing the industry. Given the technical and logistical complexities involved, we expect to see an increase in the number of companies accessing outsourced support ahead of the new November 2018 deadline, to oversee and manage the implementation of technology associated with serialization solutions."

Erik Haeffler, VP Manufacturing Services, Recipharm

"Companies who were on track to hit the deadline, like Recipharm, should now look to refine their solution further through rigorous testing and start to explore the additional business efficiencies that track & trace can offer, such as improved information sharing across the supply chain. Compliance is vital to ensuring patient safety and so this extension should be not viewed as an opportunity to be complacent. "

Brian Daleiden, VP Industry Marketing, TraceLink

"The time and effort for a company and its supply ecosystem to implement a serialization solution is often under-estimated, as are the impacts to business operations. We have seen that many companies, in particular mid-sized and small companies that use contract manufacturing organizations, are only just realizing the complexities of the task at hand. In fact, several surveys carried out by TraceLink and others, have shown that lack of readiness in the external supply ecosystem with CMOs is a contributing factor as to why pharmaceutical manufacturers are not ready for the 2017 DSCSA deadlines. Now is the time to continue pushing ahead, not to pull back."

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