Unraveling the DSCSA Serialization Puzzle: Implications for Drug Shortages and Patient Care

The pharmaceutical industry is bracing for a seismic shift as the full enforcement of the Drug Supply Chain Security Act’s (DSCSA) drug serialization requirement looms on the horizon with a deadline of November 27, 2024. Despite the FDA’s decision to delay full enforcement by a year, concerns persist about the readiness of the pharmaceutical supply chain to meet this critical mandate.

The Data Deluge: Confronting Serialization

With drug serialization, the ability to trace medications from manufacturer to end-user is greatly enhanced. However, the transition to serialized data poses significant challenges. Currently, transactions capture aggregate data, but serialization will result in multiple line items for the same product, each with its own unique serial number. The sheer volume of data generated is staggering, with millions of transactions processed daily by wholesalers. Even a small error percentage could translate to substantial data discrepancies.

The approximate error rate currently sits at 30%. A distributor that connects 1400 manufacturers to over 330,000 sites of care delivers 11 million products safely and securely each day¹—but under DSCSA standards, 3.3 million additional products would have to be quarantined. Even just a 1% error rate would mean more than 110,000 items quarantined every day until the product and data match, underscoring the need for meticulous implementation of drug serialization requirements.

Navigating the Maze: Addressing Data Discrepancies

The complexity of the pharmaceutical supply chain is magnified by the potential for data mismatches. A scenario where a drug is shipped to the wrong destination, leading to quarantining and reordering a perfectly good product, is not far-fetched. The onus falls on wholesalers to rectify these errors promptly, a daunting task given the labyrinthine nature of the supply chain. Efforts to streamline data management and ensure accuracy are paramount to avoid disruptions in medication distribution.

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Implications for Patient Care: The Specter of Drug Shortages

Drug shortages have plagued the health care landscape, exacerbating patient care challenges. As of March 2024, 323 drugs are on the shortage list in the United States. That’s the highest number the American Society of Health-System Pharmacists has recorded since they began tracking shortages more than 2 decades ago — and 48 of those drugs were added just since January 2024.²The introduction of drug serialization threatens to aggravate this issue further. The prospect of quarantining products due to data mismatches could precipitate unnecessary shortages, with pharmacies compelled to order replacement stock to meet patient needs. Despite the FDA’s intention to mitigate shortages through a stabilization period, concerns persist about the industry’s preparedness to avert this looming crisis.

The Balancing Act: Leveraging Technology for Optimization

In the quest to navigate the delicate balance between avoiding overordering and mitigating shortages, stakeholders are increasingly turning to technology and AI solutions. The challenge lies in optimizing inventory levels to meet demand without worsening supply chain inefficiencies or creating unnecessary waste. By leveraging advanced analytics and predictive modeling, companies can gain valuable insights into demand patterns, supply chain dynamics, and inventory optimization strategies. These technological advancements empower stakeholders to make data-driven decisions, minimizing the risk of shortages while optimizing inventory management practices. As the industry grapples with the complexities of drug serialization, the integration of technology promises to play a pivotal role in achieving supply chain resilience and efficiency.

Toward a Solution: Collaborative Action

Addressing the challenges posed by drug serialization demands a concerted effort from all stakeholders. Industry organizations, policymakers, and regulatory agencies must collaborate to navigate this transition effectively. The call for a phased approach to implementing DSCSA requirements highlights the need for clear guidance and support from regulatory bodies. By fostering a collaborative environment, stakeholders can work toward ensuring a seamless transition to serialized data while safeguarding patient access to essential medications.

While the FDA’s decision to delay full enforcement of DSCSA requirements provides a reprieve, the pharmaceutical industry must remain vigilant in its preparations. The challenges posed by drug serialization and the specter of drug shortages underscore the need for proactive measures and collaborative solutions. By addressing data discrepancies, enhancing supply chain resilience, and fostering industry-wide cooperation, stakeholders can navigate this transition and uphold the integrity of the pharmaceutical supply chain.

About the Author

David Schweihs is the senior vice president of healthcare and supply chain solutions at Inmar Intelligence.

REFERENCES

1. Hearing on Prescription Drug Shortages, 118th Congress 34. 2024. Statement of Eugene G. Cavacini, Sr VP and COO of McKesson Pharmaceutical Solutions & Services.

2. Kansteiner F. Number of Ongoing US Drug Shortages Reaches New High, Pharmacist Group Says. Last updated April 11, 2024. Accessed May 21, 2024. https://www.fiercepharma.com/pharma/novo-nordisk-attracts-senator-scrutiny-after-dropping-discounted-insulin-product-levemir.