On October 22, the FDA issued a new guidance document: Wholesale Distributor Verification Requirement for Saleable Returned Drug Product and Dispenser Verification Requirements When Investigating a Suspect or Illegitimate Product – Compliance Policies

The guidance includes a 3-year delay in enforcing the DSCSA’s saleable returns verification requirement for distributors. The enforcement start date is now November 27, 2023.

Enforcement of this requirement was originally delayed by one year from the original of November 27, 2019.

This new shift in timing surprised many in the industry. Manufacturers and distributors have been working diligently to implement solutions and meet the requirement this month. In addition, manufacturers, CPOs and 3PLs made great progress meeting previous enforcement deadlines for other DSCSA serialization requirements.

What Growing Pharma and Biotech Companies Need to Know

Manufacturers may not need a solution in place for compliance to meet saleable returns verification requirements until November 2023. Companies that are currently marketing products commercially in the U.S. have likely implemented solutions already. Emerging companies preparing for commercial launch within the next six months are also likely already prepared. Emerging companies still building commercial supply chain and serialization capabilities, on the other hand, can avoid the costs of complying with the saleable returns verification requirements for at least three more years.

However, pharmaceutical wholesalers and distributors may still enforce saleable returns verification as a business requirement prior to the enforcement deadline. These channel partners bear the primary responsibility for performing saleable returns verification and have been working hard to ensure compliance. As a result, they may choose to enforce the requirement on manufacturers regardless.

What To Do Today

Monitor the Big Three

The path forward likely depends on the response of the Big Three pharmaceutical wholesalers (McKesson, Cardinal, and AmeriSourceBergen). The industry generally follows their lead. If wholesalers plan to move forward with saleable returns verification as a requirement for manufacturers in 2020, then manufacturers will need to proceed with implementing EPCIS or VRS if they want their returned product resold. As of now, we are not seeing a response from any of these major players. They will likely communicate their intent to manufacturers within the next couple of weeks.

Specialty and rare disease product manufacturers should discuss strategies with their Specialty Distributors (SDs) and channel partners

While the industry generally follows the Big Three, each party is free to set their own direction. If your distributors make the requirement optional or delay their own implementations of saleable returns verification, then manufacturers should hold off on going live with their own solutions. This will avoid the costs of maintaining these solutions and avoid rework if (or when) requirements and solution designs change over the next three years.

However, under DSCSA, Specialty Pharmacies are considered Dispensers rather than Distributors and as such are not subject to the Saleable Returns Verification requirement.

Emerging biopharma companies should develop a strategy now for DSCSA compliance including saleable returns verification requirements

Manufacturers currently preparing to build commercial supply capabilities have three options for handling the requirement:

  • Do not allow returned product resale. This requires quarantining returned product and sending it back to the manufacturer for destruction with a chargeback for the product plus handling costs. This may be the preferred direction for many specialty, premium, and rare disease treatments.
  • Send EPCIS (serialization) data to the distributor at the time of sale so that the distributors have the data to verify product against if it is returned.
  • Implement a Verification Router Service (VRS) solution. VRS sends verification requests from the distributor’s systems to the manufacturer’s serialization repository, returning a virtually instantaneous response.

Bottom Line for Manufacturers

Follow the lead of your distributors and implement a saleable returns verification solution when it becomes mandatory for you to do so.