Who's Wagging Who: Why Distributor Compliance is (more) Important

  • By Mark Shaffer
  • July 05, 2018
  • Life Sciences
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The FDA. The governmental group of experts who sit in Silver Spring, MD sends shivers down the spines of any life science company who has been unfortunate enough to land on the wrong side of an FDA audit. Combine the letters FDA with the numbers 483 – and that’s a mixture no company wants to be a part of.

Companies are so desperate to remain compliant, that they have created entire departments to maintain compliance. FDA created guidelines have led to the boom of industries that never even existed before. It’s created new ways of marking and coding products, of disseminating data, and of using information. Pre-California e-Pedigree, few would have known what a 2D Datamatrix code is, and now it’s poised to be printed on every single prescription drug product in the US.

The byproduct of DSCSA legislation has been standardization on packaging. This has been an absolute boon for distributors like Amerisource Bergen, McKesson, and Cardinal – who were looking for ways to get the packages they received standardized, but weren’t able to figure out how. The DSCSA guidelines did it for them. Every package was expected to be printed a certain way, in a certain format, and with a certain grade. This was government mandated uniformity akin to what Walmart tried (unsuccessfully) to do with the “Master Case Labeling Standards and Expectations” they trotted out in 2016.

The only difference was – this had government backing.

A recent study by Amerisource Bergen and McKesson showed that nearly 94% of what was in their warehouse wasn’t coded properly per the DSCSA guidelines. Oddly enough, each distributor has a series of guidelines that they have asked their customer to follow that are identical to the GS1 and HDA guidelines expected to be followed for DSCSA compliance. That would mean that 94% of the warehouse didn’t meet ABC or McKesson guidelines, either. The distributor guidelines, incidentally, already ask for correct aggregation labeling as well – meaning case and bundle labels with gradeable, legible, print and apply labels.

So who holds the power? When you ask a serialization expert for a pharmaceutical company what will happen if they aren’t compliant with DSCSA guidelines by 11/27, the answers from “we’ll get fined” to “nothing” and everywhere in between. The only constant is the inconsistency in view of what the FDA can actually do.

But ABC, McKesson, and Cardinal – the Big 3 – they control $406.5 Billion in distribution revenue. For comparisons sake – the next 7 names do roughly $20 Billion combined. The guidelines set forth by those three companies are clear. “C” Grade bar codes, four lines of human readable, and cornerwrap print and apply aggregated labels. They also want them now. Not in 2023 – now.

So, what does all this mean for a pharma manufacturer? It means that being compliant with the FDA is mandatory, but we already knew that. More importantly, it means that your ultimate customer – the folks responsible for buying over $406B in your products annually – want you to package a certain way, and they want it packaged that way today.

The Big 3 may not be able to author a 483, but they CAN send pallets of poorly coded product (and remember – 94% is poorly coded as of today) back to you. Domino knows what your customers want. Do you? If you do, fantastic – let us help you make sure your products are coded correctly. If you don’t, that’s not a problem either. It’s an opportunity for us to work together to make sure your products get sold and stay sold.

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