IMPLICATIONS OF THE HDA-PROPOSED VERIFICATION ROUTER SERVICE WEBINAR & REGULATORY UPDATE

Transcription

1 IMPLICATIONS OF THE HDA-PROPOSED VERIFICATION ROUTER SERVICE WEBINAR & REGULATORY UPDATE DECEMBER 2016

2 SUMMARY The Healthcare Distribution Alliance (HDA) recently announced the completion of their analysis of nine different potential approaches to meet the wholesale distributor s DSCSA saleable returns verification requirement in They selected two different approaches as the most workable: 1. For drug manufacturers to provide a list of the unit-level serial number in each shipment 2. Something they called a verification router service This webinar will provide our standard quarterly update of the latest changes to global regulations and it will explain what a verification router service is, and the implications of its use in the U.S. pharma supply chain. Companies who prefer not to collect aggregation data prior to 2023 may wish to make use of the verification router service approach to meeting the needs of the wholesale distributors, but don t make any decisions until you learn what the implications are. PRESENTER DIRK RODGERS Regulatory Strategist, Systech International Dirk Rodgers is Systech s Regulatory Strategist and founder of RxTrace.com where he writes regularly in an exploration of the intersection between the pharmaceutical supply chain, track and trace technology, standards and regulatory compliance.

3 AGENDA

4 THE DSCSA 2019 WHOLESALE DISTRIBUTOR SALEABLE RETURNS PROBLEM WHOLESALE DISTRIBUTOR SALEABLE RETURNS According to HDA data, 94% of the returns to wholesale distributors from their customers, are saleable. This results in 58.8 million saleable units being returned to wholesale distributors each year. Saleable means there is nothing wrong with them. They are still sealed in their original manufacturer s packaging and they are not damaged, recalled or outdated. Customers return drugs for many reasons, but the worst is when they simply enter a quantity that has an unintended extra digit. They call that the fat-finger return. In those instances, the customer returns up to 90% of the original order. In 2015, the processing of these returns has consumed an estimated average of 37.8 Full Time Employees and cost an average of $3.3M per large wholesale distributor. That s without the DSCSA.

5 THE DSCSA 2019 RETURNS VERIFICATION PROBLEM Beginning [November 27, 2019], upon receipt of a returned product that the wholesale distributor intends to further distribute, before further distributing such product, the wholesale distributor shall verify the product identifier, including the standardized numerical identifier, for each sealed homogeneous case of such product or, if such product is not in a sealed homogeneous case, verify the product identifier, including the standardized numerical identifier, on each package. DSCSA Section 582(c)(4)(D) Wholesale distributor VERIFICATION OF SEALABLE RETURNED PRODUCT No matter how a wholesale distributor meets this requirement, it will significantly add to the cost of processing returns. DSCSA SALEABLE RETURNS VERIFICATION TIMELINE Here is a timeline that shows where we are today, and when this requirement on the wholesale distributors kicks in. It looks like it s pretty far out in the future, but as you will see below some of the approaches to solving this problem require an accumulation of data well prior to the effective date. For that reason, now is the time to decide which approach the industry will use.

6 POSSIBLE SOLUTIONS ANALYZED BY THE HDA

7 At the HDA Traceability Seminar held last month, the HDA reported on nine different pilots they just completed. All nine of them were aimed at documenting what would be required to meet the 2019 saleable returns problem, each using a different approach. Below is a list of all nine pilots, categorized by analytic approach. Four approaches were documented in live pilots, two were documented in desktop pilots, and three were documented in white papers. The approaches chosen for white papers were ideas that had some obvious flaw that was recognized from the start. The white papers simply explained why they would not work. The desktop pilots were performed on ideas that had flaws, but HDA wanted to confirm whether or not their first impression was accurate. The live pilots were performed on ideas that seemed like they would work to solve the problem. Those that were piloted are: 1. Manufacturer sends to wholesale distributor product identifiers for only the units purchased by the wholesale distributor. The wholesale distributor later use that data to verify the SNIs on returns. Notice that this is the idea that has led some wholesale distributors to demand aggregation data from drug manufacturers in They now realize that the aggregation data would be necessary for use by the manufacturer to inform the wholesale distributor of the product identifiers they were shipped. Theoretically, in that case, the wholesale distributor would not need the full aggregation data. 2. Central repository: All manufacturers send data to a central database, wholesale distributors verify the SNIs there. 3. Distributors scan product on outbound, build a database for themselves, and use it to verify the SNIs on returns. 4. Verification Router Service router to link to the manufacturer s databases so wholesale distributors can go directly to them to verify SNIs on returns. In the end, HDA recommended only two of these ideas for implementation by the industry. These are #1 and #4 above. The first one is a slight modification of their previous demand for aggregation data in Below is how HDA shows it.

8 HDA RECOMMENDATION #1 Manufacturers would still need to capture aggregation, but they would use it during the shipping process to build the list of SNIs that are included in the shipment, as shown in step 1. Later, when the wholesale distributor receives saleable returns, they would use that list to verify the SNIs on each package or homogeneous case. Problem solved. The Verification Router Service is a new recommendation. Here is how the HDA shows it. HDA RECOMMENDATION #2 Step zero is, the industry has to design, build and fund a third-party Verification Router Service. HDA chose not to identify how this would work, but they acknowledged that it could take any one of many different forms. Once the VRS is built and operational, wholesale distributors would use it to contact the appropriate manufacturer to request a verification of the SNI s on returned drug packages and cases. Simple. Right?

9 THE HDA-PROPOSED VERIFICATION ROUTER SERVICE AND ITS IMPLICATIONS VERIFICATION ROUTER SERVICE DESIGN AS PILOTED DSCSA-Triggered Business Requirement is. Here is a photo of the actual slide from the HDA that shows how this idea was designed for the pilot. HDA acknowledged that it could be implemented in many different ways and that this design was probably not the most efficient, but for pilot purposes, it worked well.

10 Here is how it worked in the pilot: At the core of the pilot VRS is a GTIN-to-IP address table. The manufacturer would need to publish their GTINs and the IP address of their EPCIS repository in the VRS. This approach is too simplified to work in the real supply chain where different manufacturers sometimes share GTINs for a period of time, but it worked fine in the pilot (sequence below follows categories as numbered above.) 1) In operation, the next thing to happen is, a wholesale distributor receives a saleable return. As part of their processing of that return, they would scan the DSCSA product identifier on the first unit or homogeneous case and extract the GTIN and serial number. 2) The wholesale distributor sends that GTIN and serial number to the VRS where the VRS uses the GTIN to find the IP address of the manufacturer s EPCIS. 3) In the pilot, the VRS then sends the GTIN and serial number to the manufacturer s EPCIS for verification. If the VRS concept is to be used by the industry in the future for real production, odds are, this step would be implemented differently. 4) But in the pilot, the manufacturer s system responds to the VRS with the current status of the unit or case with the corresponding GTIN and serial number. 5) Finally, the VRS passes that information on to the wholesale distributor for use in their saleable returns process.

11 In the illustration above, I have created an animation of how I believe it is likely to be implemented in reality. Instead of the VRS communicating with the manufacturer s EPCIS and then passing the information back to the wholesale distributor, you will see that the VRS simply provides the wholesale distributor with the IP address and lets them communicate with the manufacturer directly. This is a much lighter weight design for the VRS and should result in much better scalability, performance and security. For each wholesale distributor you see a request sent to the VRS and it responds to the wholesale distributor with the manufacturer s IP address. The wholesale distributor then sends a request directly to the manufacturer with the GTIN and serial number of the unit, and the manufacturer replies directly to the wholesale distributor with the status of that unit or case. Of course, this could also be done with a list of GTINs and serial numbers, rather than one at a time, to make things even more efficient. Now, I ve mentioned that the distributor would communicate with the manufacturer s EPCIS, but odds are that both the manufacturers and the wholesale distributors will need to deploy a web service layer around their systems that implement this VRS-specific communications. Below is an illustration of the web services that would need to be implemented and exercised to get this to work. If this is going to be viable, the industry is going to need to develop the VRS standard very soon so it can be implemented by solution providers and deployed all around the industry.

12 My suggestion is to take advantage of the existing GS1 Object Naming Service, or ONS. ONS has been around for a long time but I don t think it is being used for anything. It would only take a few modifications of ONS to make is suitable for implementing the central portion of the VRS in my design as shown here.

13 QUARTERLY REGULATORY UPDATE SYSTECH QUARTERLY REGULATORY UPDATE DECEMBER 2016 Regulation covered for the following countries: Saudi Arabia Egypt China United States Brazil E.U.

14 SAUDI ARABIA The government of Saudi Arabia published an update to their serialization requirements last month. This update re-confirms the serialization deadline of March 12, of next year. It shows no mention of aggregation. The serialization requirement is for all human and veterinary drugs that are packaged and ready to be marketed. Exceptions include: Free samples Nonregistered drugs ordered by hospitals for specific patients and in particular quantities Drugs cleared for personal use. I wonder if these are over the counter drugs, maybe? Drugs cleared for repackaging purposes The GS1 Datamatrix barcode must contain the usual data elements, including: GTIN Expiration date Batch/Lot Number Serial Number And the Printing Location for The GS1 Data Matrix barcode must be on one side of the secondary packaging preferably on a flat surface. To facilitate the reading process, it should be placed on the same side where possible. I assume they mean that the human readable must be placed on the same side of the package as the barcode. Learn more at

15 OMAN The Ministry of Health published a new document back in October that provided some details on their serialization requirements. Beginning on December 31, 2017 Inner packs (Trade Item/ Secondary Packaging) must have a GS1 Datamatrix barcode, and Case level (Tertiary Trade Item Packaging) must have either a GS1 Datamatrix or a GS1-128 barcode encoding: GS1 GTIN Expiry Date Batch/Lot Then, beginning on December 31, 2018, the GS1 Datamatrix barcode must include the serial number. CHINA Back in October the China FDA posted a message on their website that appears to provide some cryptic background on what they expect related to pharma traceability. First of all, you see I have included a warning that interpreting the meaning of documents released by the CFDA is notoriously hard and error prone. This new notice appears to indicate that, going forward, drug manufacturers are responsible for establishing a traceability system, not the government. They appear to only encourage that s the word that is translated encourage manufacturers to assign a unique identifier on the smallest unit of sale. What does it mean? Should you Follow the old China approach? Follow GS1 standards? Skip serialization altogether? I don t know. Learn more at

16 BRAZIL For Brazil we expected that the new law would be fully enacted that will enable ANVISA to publish new regulations that implement a better traceability solution than RDC-54 from EGYPT We expected a new regulation from Egypt.

17 UNITED STATES In the United States, we were hoping the FDA would publish one or more of those missing guidance documents. Over the last year they also said that they intended to publish a few other guidance documents that were outside of their specific mandate from Congress. E.U. The one update I have from the European Union is that the European Medicines Verification Organization has finally set up an information website so they can communicate with companies who will need to begin transmitting information to their E.U. Hub in February of The URL is on this slide. Not much is out there right now, but for those of you who trade in that market, this will be an important website to monitor going forward.

18 Systech is the global technology leader in product safety, and consumer and brand protection. Systech pioneered serialization and is defining the future of authentication. The world s largest pharmaceutical companies trust their brands to Systech s technology solutions. Systech unifies and optimizes enterprise serialization, track and trace, and authentication technologies to ensure regulatory compliance, mitigate risk, and drive efficiency and profitability. One Research Way Princeton, NJ United States SystechOne.com 2016 Systech International. PROPRIETARY AND CONFIDENTIAL.