Delayed Enforcement Provides a Business Opportunity

By David Lennard, Vice President and Ellyn McMullin, Research Associate, Axendia 

On July 1st, FDA  published guidance stating that: “FDA does not intend to take action against dispensers who, prior to November 1, 2015, accept ownership of product without receiving the product tracing information, as required by section 582(d)(1)(A)(i) of the FD&C Act.”

Last December, FDA published guidance informing industry that it did not intend to Supply-Chain-Squares (3)take action against manufacturers, wholesale distributors, or repackagers who did not, prior to May 1, 2015, provide or capture the product tracing information required by the new Drug Quality and Security Act (DQSA).

Key provisions of DQSA were expected to go into effect on January 1, 2015.  However FDA guidance documents for industry have been slow to emerge.  On November 2014, FDA published their Guidance for Industry on “Registration of Human Drug Compounding Outsourcing Facilities” (Section 503B of the Federal Food, Drug and Cosmetic Act) which described the process for registering which reflects their current thinking in light of existing data standards, information technology and information management resources.

On December 24, 2014 a guidance document was released regarding the Drug Supply Chain Security Act (DSCSA) implementation.  While product tracing requirements for manufacturers, wholesale distributors and repackagers were scheduled to go into effect on January 1, 2015, FDA advised that they would not be enforced until May 1, 2015 “to minimize possible disruptions in the distribution of prescription drugs in the United States.”

The pervasiveness of globalization and outsourcing in the industry has transformed supply chains into supply networks – spanning from raw material to patient. As a result, both large and small companies often have complex networks of suppliers, contract manufacturers, packager, third party logistics, distributors and dispensers. These can vary widely based on product types, geographic location and local regulatory requirements. Under DQSA, each of these organizations has a role to play, and data to report to trading partners and regulators.

Thus the enforcement reprieve for all trading partners is significant to the entire supply chain.  It illustrates the impact of one component on the interoperability of the entire supply network.

Our research shows that industry’s initial reaction to the law has focused primarily on understanding the mechanism and the complexity of exchanging serialized data through their supply chains.  Companies now have the opportunity to think holistically about the day- to-day functioning of the business and how they can leverage this effort to improve business outcomes.  Our recommendation is to “seize the day”.

Where to start?

  • Begin mapping your current processes, supply networks and procedures to identify gaps.
  • Implement a plan to mitigate gaps in your business and those of your trading partners.
  • Then develop the processes and systems that will be needed to support this regulation!

Ask yourself:  How can you use the data to benefit your business and your relationships with your partners?


Think of it this way:  Under the new regulation, at any moment, you could be in “RECALL” mode with a regulatory mandate (subject to enforcement after May 1st) to provide data with a 1 DAY deadline based on information coming from many constituents in your supply chain.

Even if you have the bare minimum processes and systems in place already, use the extra time FDA has given you to get business value from DQSA.

If want to improve business outcomes, start NOW!


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