The Importance of Drug Supply Chain Security

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The US pharmaceutical supply chain is an extensive one, with drug wholesalers, manufacturers, distributors, and dispensing pharmacies comprising only a few of its various links.

As noted by a commentary published in JAMA Health Forum,1 in 2013, Congress passed the Drug Supply Chain Security Act (DSCSA) as a component of the Drug Quality and Security Act, with the goal of requiring members to create an electronic, interoperable system that can be used to exchange, track, and verify Rx drugs at the package level by Nov. 27, 2023.

However, on Aug. 24, 2023, as many members of the industry may be aware of, the FDA delayed this enforcement for one year (until Nov. 27, 2024), in what is being referenced as a “stabilization period.” It’s important to note that this delay, as mentioned by Bob Celeste of the Center for Supply Chain Studies in previous Pharma Commerce conference coverage,2 only applies to certain aspects of DSCSA; it is intended to implement and trouble systems, and to continue to build and validate these interoperable systems.

Efforts to provide supply chain safeguards dates back to a time pre-DSCSA. In 1987, Congress passed the Prescription Drug Marketing Act, which, by controlling the reimportation of drugs manufactured domestically and creating requirements for maintaining records of drug distribution and sales, was intended to prevent counterfeit drugs from entering the pharma supply chain. Another major milestone then came in 2004, when FDA required barcodes on all medications.

Fast-forwarding to present day, the DSCSA features three main elements:

  • Phase 1: Develops a mechanism to trace products at the package level. Supply chain stakeholders are divided into five classes of authorized trading partners (ATPs), manufacturers, repackagers, wholesale distributors, dispensers, and third-party logistics providers (3PLs).
  • Phase 2: Describes how the products are to be handled and traced by ensuring serialization of all pharmaceutical products. This is accomplished by converting product information into alphanumeric sequences.
  • Phase 3: Implementing an electronic, interoperable system for tracing at the individual drug package level across systems. At this phase, ATPs must investigate products that are suspected of being adulterated; they must inform the US Department of Health and Human Services, along with other ATPs in the supply chain handling the same product, of any suspicions.

Enacting these requirements has not been a simple feat, despite the FDA’s efforts to release guidances and conduct pilot programs. One of the challenges revolves around engaging in transactions. In order to do so, stakeholders are required to maintain APTP status, a process that involves being licensed; some of these licensing standards are still being created, including for wholesalers and 3PLs. In regard to ATPs, there is confusion among stakeholders as to which groups fall into which particular ATP class.

Although the FDA has said that the enforcement of license regulations will be delayed until two years following finalization, these standards will still need time for implementation. Despite this, the agency plans to conduct facility inspection around this same time.

Another component of the DSCSA requires the FDA to conduct a technology and software assessment that would assess the practicality of smaller dispensers to comply with the law and publish the results within 8.5 years of enactment. This deadline has since passed, without a trace of any study results, leaving smaller drug dispensers at risk of non-compliance.

According to the authors of the commentary, the FDA has interpreted the DSCSA in a way that “reflects a missed opportunity to promote a cohesive framework of data exchange.”

As a result, they continued, “given vulnerabilities from illicit or negligent handling of medical products, the US pharmaceutical supply chain is under increasing scrutiny for its current level of standardization and ability to respond to compromised products. Ultimately, the DSCSA’s emphasis on tracking and tracing products can improve the integrity of the US drug supply, but only with adequate structure and implementation for supply chain participants. Establishing clearer and stronger regulatory expectations is needed to meet this goal.”


1. Kannarkat JT, Denham MW, Sarpatwari A. Improving Drug Supply Chain Security. JAMA Health Forum. 2024;5(1):e234819. doi:10.1001/jamahealthforum.2023.4819

2. Saraceno, N. Trade & Channel Strategies 2023: A DSCSA Update. Pharmaceutical Commerce. December 13, 2023. Accessed January 17, 2024.

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