HRG Ensures Rx Can Meet Tracking Mandate

February 22, 2019By Articles, Industry Intuition, Resources focused on Independent Pharmacy, Views

As seen in “RX/News” in Chain Drug Review, January 21, 2019

WAUKESHA, Wis. – With retail pharmacies facing a federal mandate to process, track and store drug pedi­gree data, Hamacher Resource Group, Inc. (HRG) is rolling out a unique sys­tem help them meet their compliance requirements.

The offering, licensed from Advasur and tentatively called the Rx Track-­and-Trace Compliance Service, fills “a real gap in the marketplace for ap­plications solely focused on the retail dispenser,” says HRG vice president of strategic relations Dave Wendland.

Other services have helped pharma­ceutical companies and distributors meet their requirements under the “track and trace” Drug Supply Chain Security Act (DSCSA). Now it’s time for dispensers to meet a DSCSA dead­line, says Wendland. “Manufacturers as of November 2018 have serialized their items. Wholesalers have implemented their systems. The next cog in the supply chain is the retail pharma­cies.” Their deadline is late November of next year, when they must obtain equipment, train staff and put processes in place to ensure verification of medicines under terms required by the statute. “It sounds like it’s really, really far away, but it isn’t.”

Dave Wendland

In contrast to other services de­veloped to store information or pro­vide visibility to advance ship no­tices (ASNs), HRG’s offering is built around a smart system, with artificial intelligence. “It’s rule based,” says Wendland, “and we’ve got a team of auditors in place that will be monitor­ing transactions and paying attention to the red flags that are generated by that artificial intelligence, and taking corrective actions prior to a product being received. So in essence, our pro­cess identifies and rectifies potential problems before they occur. And be­cause our auditors are proactive in that process, it is a huge point of difference in the market.”

To assure dispensers that their data is protected and secure, Advasur manag­ing director Randy Hoggle notes that the company is experienced in build­ing health care systems with three-tier security architecture for U.S. govern­ment agencies. The company built its DQSA eCompliance Repository Sys­tems with state-of-the-art platform and network security, physical security, and Malware controls. Advasur also has implemented data privacy and pro­tection, cryptography, and access con­trol management systems. Security au­dits and validation of data control are continuously performed, says Hoggle.

The need for such a service for dis­pensers is heightened by next year’s DSC SA mandate for retail pharmacies. By November 27, 2020, dispensers will only be able to accept prescription drugs accompanied by T3 data, namely transaction information, history and statement. Any shipment that doesn’t contain those three elements must be quarantined or corrected before the medications can be dispensed.

Secondly, pharmacies have to store tracing documentation for six years and have it available for the Food and Drug Administration within two business days of a requested audit. “When you think about the number of transactions that we’re talking about — whether it’s a high-volume or mid-volume pharmacy — considering the number of suppliers and sources they draw from, the accumulated data is immense,” notes Wendland. “When you ‘re searching through six years worth of data — which a lot of dispensers to this point have collected via paper or through an archaic system, — it becomes very difficult to find a needle in the haystack. And retailers really to this point have not needed to store that information.”

While pharmacies have done an outstanding dispensing job and been highly trustworthy, problems do occur, as with a lot number from a supplier being changed or moved, and a different number filling the supply chain. A second concern is inconsistency in the National Drug Code (NDC). Thirdly, a quantity may be out of sync, starting with one amount from the primary drug wholesaler, but ending up different as it moves through a secondary or tertiary level. Increasing quantities are especially glaring. Also, a product’s expiration date may not match its lot’s. Being alert to these red flags can prevent adulterated, counterfeit, outdated or incorrectly repackaged products from getting into the drug distribution system.

HRG’s service was originally launched by a supermarket chain with more than 2,000 pharmacies, and it has since been significantly honed. The supermarketer has hundreds of drug suppliers, so the system is tracking tens of thousands of transactions on any given day. “Being in that environment is like getting a car out on a closed raceway,” comments Wendland. “You’re seeing all the possibilities at all speeds and curves.”

Having proven its merit for the grocer, the service is being repurposed and broadened for the rest of the retail industry, says HRG president Dawn Vogelsang. The wider rollout is “the result of the success and the improvements that have been made along the way.”

Next year’s deadline for unit-level traceability, with a concomitant requirement for 2D bar code readers at the retail level, made this an ideal time for HRG’s involvement, says Wendland. “We intentionally didn’t look at the manufacturers because they’ve got their ducks in a row. Health care distributors aligned themselves over the last couple of years in either homegrown systems or through purchased applications. But we saw a real gap in the marketplace for applications that were solely focused on the retail dispenser.”

When it comes to equipment needs, a pharmacy does not need any additional hardware other than —eventually — the 2D barcode readers in lieu of NDC readers. The service employs a Web-based interface, so despite the fact that data is being stored in outside repositories, the retail end-user can access specific information from the internet. “It’s a very elegantly built system,” says Wendland. “Its ease of use on our end for the auditors makes it scalable, and from a dispenser standpoint they can have limited purview, or larger visibility. It’s up to how we structure the relationship.”

Dawn Vogelsang

Vogelsang says other such services are generally just repositories, merely places for data storage. “There’s nobody really helping the retailer proactively monitor — relieving them of that burden. We know that if the expectation is for a pharmacist in the store to be conducting the validation at the time a shipment is received, that’s unrealistic in today’s world with all of the demands on pharmacists who are trying at the same time to dispense product. That’s why the Rx Track-and­Trace Compliance Service is different from the other solutions that are out there.”

Asked why Advasur developed a system that went beyond a basic repository, Hoggle says “it was all about the dispensers from the beginning. We have pharmacists on our senior leadership team, and it was important to us that the Advasur Dispenser DQSA eCompliance System development team included pharmacists. We want to help dispensers meet the federal mandate and run their businesses more efficiently. The Advasur service is built to perform more than just ASN deposit, retention, search and retrieve; it also allows dispensers to use the ASN data to better manage their business, audit for returns, recalls and withdrawals, and take advantage of rebates, chargebacks and other manufacturer incentives.

Our work with the federal government on projects similar to this leads us to believe that the current DQSA requirements are the just the beginning and many additional requirements will be forthcoming. For instance, an automated shipping notice 856, according to the DQSA requirement, has set fields of information that must be completed, but there is no requirement for accuracy. That gap will be addressed at some point, so Advasur built a Smart 856 artificial intelligence system that scans and flags mistakes as the 856 is transmitted so issues are caught and addressed while the product is in transmission or can be addressed immediately upon receipt.”

Wendland says compliance with DSCSA requirements is a significant issue for retailers ranging from an independent pharmacy group to a small chain and all the way up to the largest retailers in the country. “Those with multiple entities will be relieved to find a system that’s a one-stop solution that provides more than just a repository, that provides the eyes and ears to truly give external visibility to something that they would otherwise either have to hire people for or build some pretty extensive systems to manage.”

Who is the ideal customer? Vogelsang says, “It’s really anybody who buys their product from more than one location or more than one source. Some small independent pharmacies may say, ‘Oh, I buy absolutely everything from my primary wholesaler,’ and if that’s truly the case, then their wholesaler has a solution for them and they probably don’t need a solution like ours. But, in today’s environment, there’s significant generic buying that happens outside of that primary wholesale relationship. Whether you’re a chain of five or 500, you’re probably doing some direct-to-retail buying outside of your primary relationship. And that’s where the complexity of the solution really pays for itself.”

If independent pharmacies “are honest with themselves and really look at their payables,” adds Wendland, “they’re going to acknowledge receiving shipments from maybe not as many sources as a large chain, but still having dozens of sources, if not more.”

The focus of the Rx Track-and-Trace Compliance Service is “the upward chain of command,” he says. “It starts with the point of distribution, with the last person who handles that product before handing it to a dispenser. It could be direct-to-retail through a manufacturer, or buying group, or a consortium. It could be one wholesaler to another wholesaler to a third party to a retailer. We should be able to look upstream to who got it into that point of distribution, where it originated and if there was anything along that chain that looks suspect. That’s what our auditors are going to red flag to try to resolve on behalf of the retailer and/or get the retailer to say, ‘This is something that we can’t resolve, but we strongly urge you to quarantine the product, talk with that supplier, and cut off that supplier if need be.”

Lest there be any doubts about the urgency of the need for such a service, dispensers should know that the DSCSA includes initial penalties of imprisonment for up to a year or a fine of up to $1,000, with sanctions for subsequent violations increasing to up to three years in jail or $10,000. When it comes to equitable remedies such as restitution, disgorgement of profits and product seizure, the federal criminal code authorizes a fine up to $250,000 for individuals or $500,000 for entities. As to who will police the law, Wendland notes that the FDA was given an extra $60 million dollars to investigate drug counterfeiting over the next three years. “So clearly there’s a mission in place to ensure the reliability of the supply chain. Retailers are putting themselves at risk if they don’t have a means of ensuring the reliability of a product, and the fines can be devastating.”

It only takes one missed transaction to be penalized and “put under the microscope from that point forward,” says Vogelsang.

Meeting the DSCSA requirements is actually just the low-hanging fruit, says Wendland. With pharmacists still being one of the most trusted professionals, celebrated for their dedication to helping patients, “anything that can be done that ensures they’re not doing harm instead of good is a key motivator. Verified pharmaceuticals support patient safety. That’s what we’re helping them deliver.”

The offering is all the more enticing against the backdrop of the opioid crisis. “Anytime you’ve got something like oxycodone, it’s ripe for counterfeiting,” notes Vogelsang. “This system will prevent the adulterated drug, which is far more dangerous than the legal product. So there’s definitely an ability for this process to help ensure that those who are legitimately needing oxycodone get the authentic drug.”

HRG’s 39-year legacy of working across the retail health care supply chain optimizes the system’s potential, she adds. “Our understanding of the supply chain fits a need here. We’re partnering with a technology company that doesn’t have as much of that knowledge They’ve built a really solid system. We bring the knowledge of the market and the understanding of what’s important at retail.”

Says Wendland, “The partners who have worked with us over our history would say that our process and data management are two very strong pillars that our organization has been built on. This service plays directly into those strengths of process management; putting auditors in place, and data management; understanding what goes into a legitimate product, what an NDC structure is, what a good ASN looks like and how to manage the integrity of that data.”

Advasur’s involvement comes after its management team built the Med­Contrax Contract Processing Network, which is used by numerous health care IT market leaders. Advasur also developed the DHHS/CDC Surveil­lance, Preparedness, Awareness and Response (SPARx) system after 9/ l l to track and trace government supplies for bioterrorist treatment responses.