Where’d that come from?

December 22, 2014By Industry Intuition, Views

by Dave Wendland, as seen in Healthcare Distributor magazine, Out of the Box column

October/November 2014

It’s the law

On November 27, 2013, President Obama signed into law the Drug Quality and Security Act (DQSA), which amends the Federal Food, Drug, and Cosmetic Act. Title II of this law establishes a timeline for entities involved in the pharmaceutical distribution chain to implement a national track and trace system. Manufacturers and wholesale distributors that transfer ownership of a product will be required to provide the subsequent owner with transaction history, transaction information, and a transaction statement in a single document.

Benefits appear to outweigh inherent disadvantages


  • Provides traceability of medicines in the supply chain.
  • Stems the flow of illegal and dangerous counterfeit medicines.
  • Creates national standards that preempt state-by-state pedigree laws.
  • Improves recall processes.
  • Improves stock management according to expiry dates.
  • Enhances patient safety.


  • Adds costs throughout the supply chain.
  • Creates potential bottlenecks in the flow of goods.
  • Implementation delays may cause disruption.
  • 2D Barcodes are not readable by all pharmacies.

A global issue

In regions where regulatory enforcement systems are weak, counterfeiting thrives. According to statistics cited in a white paper published by IBS, as much as 40 percent of the drugs circulated in South America are counterfeit; in West Africa, the number jumps to 70 percent. It is growing threats to the global drug supply chain such as these that are driving regulatory requirements worldwide.

Given that more and more governments around the globe have enacted track-and-trace legislation (specifically China, Brazil, Korea, and Argentina), it has been estimated that following U.S. compliance with the DQSA regulations, over 70 percent of global medicines will be addressed by 2017.

Moving forward

With the historic passing of the new serialization law, the industry now has the opportunity to create a uniform system of product traceability. The law requires FDA to develop standards, guidance documents, and pilot programs and to conduct public meetings, in addition to other efforts necessary to support effective implementation. The timeline for product tracing requirements for manufacturers, re-packagers, and wholesale distributors will become effective January 1, 2015.

Putting the puzzling pieces in place

The FDA will be calling on drug manufacturers, wholesale drug distributors, re-packagers, and many dispensers (primarily pharmacies) to work cooperatively to develop the new system over the next 10 years including provisions for: Product Identification; Product Tracing; Product Verification; Detection and Response; Notification; Wholesaler and Third-Party Logistics Provider Licensing.

Make no mistake; this is a massive undertaking for our industry and perhaps among the furthest reaching in recent memory impacting each node of the pharmaceutical supply chain. And, I wouldn’t be surprised that during its 10-year implementation we see over-the-counter medications and other healthcare product tracking emerge.

"Serialization – Pharma Faces 2015 Deadline," Pharmaceutical Online, March 4, 2014.
"Bogus Medicines Flood Developing World: U.N. Report," Reuters, March 1, 2007.
"Combating Counterfeit Drugs," U.S. Food and Drug Administration, February 2004.
"Pharmaceutical Serialization & Authentication," Touch Briefings, 2009.
"Tackling Track-and-Trace: An Overview and Pathway to a Solution," IBS Enterprise, 2013.


Leave a Reply