Are You Prepared for DSCSA?- Dave Wendland

Shownotes

HB: Alright, so today, we have a special guest on the Talk to Your Pharmacist podcast. Dave Windland serves as VP of Strategic Relations at Hamacher Resource Group. Dave is a 27-year veteran of the consumer packaged goods industry and is passionate about optimizing results across the retail supply chain. He’s been a sought-after speaker for industry conferences and is a frequent editorial contributor. Dave provides dynamic, thought-provoking presentations, idea-generating articles and purposeful business guidance. As VP of Strategic Relations and one of the co-owners of Hamacher Resource Group, Dave has connected, counseled and offered business improvement solutions to a variety of manufacturers, distributors, retailers and technology providers. With his birds-eye view of retail and fresh approaches to branding, he is able to assess and offer creative ideas to help companies of all sizes, whether they are market leaders or new to the industry. Dave, welcome to the Talk to Your Pharmacist podcast!

 

DW: Well it’s a pleasure to be here, Hillary. Thank you so much for having me.

 

HB: Well, thank you. And now that our listeners have heard a little bit about your background, maybe you can fill in any gaps from that intro and maybe share a little bit about your personal life.

 

DW: Well, I certainly am, as you mentioned, passionate about the pharmacy industry. And it actually goes back long before I joined the organization. My late father was president of a pharmaceutical distribution company in the Wisconsin area. And literally, Hillary, we would sit at the kitchen table when I was a child and he would talk about pharmacies, and he would talk about some of his best friends, which were pharmacists. And the only bad new story I have about that is I was living in California after graduating from college, and my parents had 40-yard-line Green Bay Packer tickets. And he asked me if I wanted them. And I said, “Dad, I’m living in California. I’m not going to come back for any games.” And he gave them to a pharmacist friend of his. Ten years later, I moved back to Milwaukee and really wished I had had those tickets.

 

HB: That’s a fun story. Thanks for sharing that, Dave. Well, we’ll go ahead and kind of get started here because the topic for today’s conversation is going to be all about Drug Supply Chain and Security Act or DSCSA. So for our listeners out there who might be unfamiliar with what that means and why it was established, could you share a little bit of insight into that regulation?

 

DW: Absolutely. And you know, it’s interesting, Hillary. It’s certainly not confined to DSCSA law and the regulation I’m about to speak to, better known probably as track-and-trace or track-and-trace regulations, is a U.S.-based law that was passed by Congress in 2013. Interestingly, it truly is a global movement. Virtually every developed country has established some guidelines on how to track and maintain the integrity of the supply chain, especially around the critical drug supply chain, which we face here in our country. And obviously, with direct purchases, with importation and unfortunately, counterfeiting that takes place, getting arms around that supply chain internationally and the DSCSA here in the U.S. is absolutely crucial to patient safety.

 

HB: And you know, I think back in 2013, if I can recall correctly, I do have a colleague that helped actually craft some of that language. She was working on the Hill and is a pharmacist colleague, Constance Payne, who has been on the podcast a couple episode back. She was sharing that a lot of that stemmed from some of the meningitis outbreaks and the congressional leaders were just trying to figure out how do they make sure that something like that doesn’t happen again to where a product that enters the supply chain can potentially be contaminated and then, of course, to some of the other issues that you spoke to regarding importation, etc.


DW: In fact, the broader law is called the Drug Quality and Security Act. And there were two parts of that law. To your point, the first part really addressed compounding and the issues that stemmed from that meningitis breakout, which was absolutely a devastating breakdown of the supply chain. The second aspect of it was a 10-year plan that focused on manufacturers, repackagers, wholesale distributors, dispensaries, also known as pharmacies, and third-party logistic providers who might be following a pass-through or a third-party logistic distribution role within the supply chain as it relates to the broader group of pharmaceuticals. So indeed, there were two parts of it. One was focused on the compounding piece. And then the one we’ll talk about today is the second portion, which really stemmed from that same 2013 law and there were various dates and milestones that were developed as part of that. The first milestones were actually implemented in 2015, which affected dispensers. And they called that Phase 1, which was allowing pharmacies to verify that the trading partners they were doing business with were, in fact, legitimate trading partners and that they were registered or licensed with the FDA or a state authority. And so, as you mentioned at the onset, perhaps some of the listeners to this podcast may not feel that they’re deeply involved in the DSCSA law as of yet. In 2015, they became active. Whether they wanted to believe that or not, they were involved in it. The next milestone, however, is a 2020 deadline, which is looming. We may think that 2019 just began, and I’m still writing 2018 on many of my correspondence, however, 2020 is right around the corner. And in November 2020, all dispensing pharmacies have to have the ability to process, track and store pedigree details. And the pedigree details are pretty — quite complex and require a mounting amount of storage space, primarily because the law says that the pharmacies are going to have to store this for six years on each and every product they receive. So in essence, that 2020 date, as I mentioned, is looming, and it will require some different systems and some different repositories in order to keep and store that information. And attached to that, Hillary, for you and your listeners’ benefit, is the FDA could at any point call back information, whether they’re suspicious of activity in the supply chain or they’re just doing a random audit of the supply chain or there was some other disruption that they needed to investigate, the requirement by dispensers as of November 2020 will be that within 20-48 hours, they need to recreate all of the required transaction-level data about any suspect drug. So that’s where that repository, it’s one thing — at home, I’ve got what I call a repository. It’s also known as my junk drawer; everything goes in there. Ask me to find a paper clip, it will take me more than 24 hours. Looking for the paper clip among all of these pharmaceutical transactions that are made requires a pretty robust repository, just given that amount. And finally, let me comment on the last date, which is the 2023 date. If you recall, I mentioned this was part of the 10-year plan. So it was launched in 2013 with three phases. The first was implemented in 2015. The second going into effect 2020. And the last and final goes into effect 2023. And that November date suggests that at that point, an electronic system has to be in place across the supply chain — so including dispensers — that requires 2D or two-dimensional bar code reading of the serialization of any drug. What that means is manufacturers are now serializing drugs. Some of the listeners on this podcast have probably received some product that has now been generated within the last two years that comes through with a 2D symbol on it. And they’re looking at it, saying, “I can kind of understand what’s there, but I can’t read it.” By 2023, the readers will have to be in place and what they’re asking for is an interoperable system, which basically means an electronic exchange system that allows movement of information about these serialized products. And it was interesting, even last week, the FDA announced a pilot program, Hillary, where they’re inviting any dispensers as well as wholesalers and manufacturers, third parties like ourselves, to participate in a pilot program to demonstrate that the interoperability of these systems, include barcode reading, can be achieved by 2023. That was a lot of information, so I apologize if I sounded like an encyclopedia salesman.

 

HB: Well, Dave, there’s certainly a lot to keep up with, and that’s helpful that you were able to focus in on some of the pharmacy requirements. And going back to what you mentioned, the regulation being called track-and-trace, there are multiple points along the supply chain: T1, T2 and T3. T1 being the manufacturer. T2 being the wholesale distributor. And T3 being on the pharmacy, which we’ve focused on so far. And as you mentioned, the manufacturers actually are the ones who are having to adhere to these time crunches, I guess, if you will, first. So since they’re the first ones in the supply chain, they’ve got to adhere to some of those different types of solutions.

 

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HB: Dave, what are you seeing as, you know, you just mentioned there’s an FDA pilot program. What are you seeing as some potential solutions for solving for track-and-trace. I know blockchain has been mentioned as a possible solution, although I think since it’s still a new and emerging technology. What are you seeing in the marketplace as some solutions for pharmacies to start looking at to be able to meet these regulations?

 

DW: It’s a terrific question, and they do come in various sizes, shapes and forms. So I’ll comment on a couple. I do want to just take one small step back on the T3 information for that transaction, T1, T2, T3 or TI, which is actually Transaction Information is the information about what that particular drug is. So the TI is the lot number and the expiration date and the strength, dosage, MDC. The second T in the T3 is actually Transaction History, and that is the chain of command. Where was that product through the supply chain? If it originated with a manufacturer, went to a distributor, went to a buying group, back to a distributor and then to a dispenser, that would all be contained in the TH or Transaction History. And the last T is a Transaction Statement, which is an authorization that generally says, the last person to receive this has the authority to distribute this product. So I just wanted to clarify that briefly because although you’re not incorrect that there are different cogs in this gear and manufacturer and the wholesalers were the first to address this, the T3 information, those three elements, the information, history and trading partner — I didn’t want to confuse the listeners. Regarding the different solutions out there, Hillary, one solution that may be perfect for a pharmacy could be that the pharmaceutical distributor, their primary distributor that they’re working with, could in fact keep those records on behalf of that pharmacy. Now, there’s a couple of things I would caution about that. One is today, I find very few pharmacies that aren’t working with multiple suppliers. Now, that’s not to say they’re working with multiple primary distributors, but they probably are buying some products as direct shipment from manufacturer. They may be getting some product through a secondary or tertiary wholesaler, and they could very well be getting a product from a repackager or a third party logistics partner, all of which must provide this level of detail to them. So the primary distributor, if 100% of the purchases are through the primary distributor and that wholesaler suggests that they’ll store that data for the minimum-required six years and make it available in that 24-48 hour window, could be a perfect solution. So that’s one to consider. A second is there are a number of solutions, they were largely written and originally implemented for the wholesale community, but they are repository-type solutions, which basically says, I’m going to give you a place to store your stuff. I’m going to give you a junk drawer to put all of your information into. There are a number of repository solutions out there, all of which have different bells and whistles attached to them. But largely, their function is that of a repository. There are other solutions that handle the acceptance of the data and ask the pharmacy to build their own repository. So they’re the front-end solution that says, “Hey, I can collect for you the transaction information that you need to build some type of a database on the back end to store it,” and that solution could exist. I would caution those that are looking at that as a fail-safe solution because pharmacists are so busy today and likely IT and running an IT department is probably not high on their list. The final solution or the one that we’re actually at Hamacher Resource Group representing to the retail pharmacies kind of combines the best of all worlds. We’re looking at something that handles the front-end transactions, places that information into a six-year minimum repository, secure, safe and dedicated for each pharmacy. And then thirdly, as reporting and what I’ll call intelligence to the system. And the intelligence in this case is twofold. It’s a rules-based engine, smart engine, that starts to look at the kinds of things that could deride (?) that chain of command. So as an example, if a quantity is incorrect along that supply chain movement of the product, the rules-based engine is going to pick that up and flag it. Another might be it doesn’t have an NDC associated with it or a lot number seems to be out of sync. In addition to the rules-based engine, the second part of the smart system that we have adds an auditor, an internal Hamacher person literally is reviewing any of the rule-based flags that come up and on behalf of our pharmacy clients will be serving, will be striving to resolve that issue upstream. So if there is a quantity misalignment, our auditor will first call the supplier who last touched the product just to say, “Why is this quantity wrong?” And then go upstream to the next cog in that wheel of necessary to try to resolve it before it hits the pharmacy drawers. So those are the four or so types of solutions that are out there today. And all of them, each of them have their unique advantages and disadvantages. But we did a pretty exhaustive search before we decided to jump into this track-and-trace arena and feel quite confident in the solution that we’ve brought that meets those compliance requirements and provides that oversight and intelligence, unlike any other system.

 

HB: Yeah, thanks, Dave, for reviewing some of those available options. And what’s your general sense of the readiness of pharmacies, you know, adopting some of those solutions so that they’re ready for 2020 and when they’ve got to be able to comply with these regs?

 

DW: I’m sensing that — through conversations, Hillary, I’m sensing that there are a number of folks that are still waiting to decide what direction they’ll want to take in order to meet that requirement. On the independent pharmacy front, I’ve most often heard that they are looking upstream to their primary distributor, which might become their partner in the track-and-trace. For a more sophisticated pharmacy that is indeed looking and providing or purchasing, perhaps, only 92% or 95% of their product through a distributor, they are looking for a more robust solution today. And I would say those are the forward-leaning pharmacists. But I’ve talked to mid-sized and even larger chains that are not exceedingly further ahead. They’re still examining their options, and they’re still looking for the best way to put together a solution that meets these regulations. And the challenge, quite honestly, is as I said, 2020 feels far away, however, if not in place and tested and working by November of 2020, and an auditor happen to walk in and not be met with the obligations that that pharmacist have, there are purported penalties that are going to follow that. Specifically, in the law, it says, “Failure to comply to the DSCSA guidelines is a prohibited act, according to Section 206. And failure to bear the product identifier could result in a criminal investigation with heavy fines, license suspensions and imprisonment.” I never like to swing a bat to say, this is the way to move people off the diamond and start putting the solution in place. However, the revocation of a license or the disruption to business or workflow or the risk of heavy fines is reason enough for me to encourage my pharmacy friends to start looking for a solution now rather than before it’s too late.

 

HB: Wow, yeah, that is a very alarming consequence. So we certainly want to make sure that pharmacists are aware of those implications. They’re very severe.

 

DW: Well, at the same time, Hillary, and you know, really, yes, the fines are daunting.

HB: Sure.

 

DW: But I also believe that from a patient commitment, to ensure the patient’s safety with the prescriptions being dispensed, to really provide the assurance and confidence to their patient base, the pharmacists owe it to themselves not only to put a good solution in place but if I had a pharmacy today, I would broadcast to my patient base that I’m prepared, that I am tracking on their behalf the safety and efficacy of every single drug according to the law. Now, it goes without saying today. But the first time a headline hits, every patient in America is going to stand back on their heels and say, “I wonder if my pharmacy is compliant.”

 

HB: Yeah, no, I think that that’s a great point, Dave. You know, we’re seeing issues with importation of drugs.

 

DW: Hillary, we are up on our 30 minutes. And I certainly appreciate the opportunity to be involved in today’s podcast.

 

HB: Great. Thanks so much for being a guest.

Host

Hillary Blackburn

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