The United States drug supply chain is a complex and decentralized system that involves multiple entities. This includes suppliers, distributors, manufacturers, repackagers, wholesale distributors, third-party logistics providers (3PLs), dispensers, and medical facilities such as hospitals and retail stores. To protect this system against potential threats and the illegal movement of counterfeit drugs, the Drug Supply Chain Security Act (DSCSA) was enacted in 2013.
With more than a decade of effort, the pharmaceutical industry has established agreed-upon methods and technologies to exchange transaction information, verify product information, and track products throughout the supply chain, thus improving the security of the U.S. drug supply chain. Through implementing the requirements of the DSCSA, the industry has initiated a comprehensive framework to improve the integrity of drug distribution by requiring the transition to an electronic, interoperable ecosystem in which trading partners must have “the systems and processes to facilitate tracing.”
However, the ambitious scope of this legislation, coupled with its stringent requirements for data exchange, verification, and traceability, presents various challenges for stakeholders across the sector.
The deadline stipulated by the DSCSA has passed in November 2023. Presently, we are in a “stabilization period” where the FDA is temporarily exercising enforcement discretion for specific requirements of the DSCSA. This is to enable trading partners and solution providers to improve their capabilities before November 2024. However, there are varying levels of capabilities among different trading partners – both small and large, and there is a need to implement changes in a stepwise manner. This presents a significant challenge. For instance, dispensers cannot test or improve their systems until wholesalers are able to send serialized data. Wholesalers, on the other hand, have had to wait for manufacturers to be able to send serialized data. It is taking time to harmonize the entire system.
Over the past decade, I have worked closely with stakeholders across the supply chain to develop an electronic ecosystem that is interoperable and compliant with the introduced act. As the industry worked on designing and developing various capabilities, I provided support by creating a series of simulations. These simulations helped us understand the nuances of product and information flow, as well as any exceptions that may occur. By identifying complex issues through simulations, we were able to provide feedback and adjust the emerging designs, standards, and specifications that support the industry’s efforts.
The role of simulation technology in the pursuit of DSCSA compliance
As companies in the U.S. pharmaceutical industry work towards achieving DCSCA compliance, they are facing various challenges and pain points, specifically related to serialization and data exchange. One such challenge is testing serialized data exchange through the entire supply chain, as the lack of serialized data makes it difficult for downstream trading partners to test and prepare their systems.
Serialization requires a unique identifier to be assigned to every drug package. This process involves a significant revamping of the way product inventories are handled across the supply chain. Its purpose is to enable accurate documentation and sharing of the ownership transfer of a drug. However, implementing serialization entails complex data management and operational adjustments that not all entities may be capable of executing. The challenge of implementing robust data exchange systems that can accurately exchange ownership information and trace products through diverse technological platforms can seem insurmountable. We needed to rethink how ownership and product exchange in the supply chain could be harmonized to accommodate new data layers, product verification, and traceability while considering the nuances of supply chain and trade.
Simulation-powered digital twins have emerged as powerful tools in this context. By creating dynamic, virtual simulations of the supply chain, stakeholders can visualize the flow of drugs and information, identify challenges, and test various scenarios for resolution. It’s a risk-free way of validating potential changes that need to be made, but most importantly, it offers a vantage point of the whole system to see where issues may lie. The industry can then make better-informed decisions about their compliance.
Consider the digital twin as a way for organizations to zoom out their perspective and see more accurately where they sit within the full chain to understand and trace the flow of products and information. These digital twins offer the perfect way for every organization to gain better visibility of the system they operate and how processes outside their organization affect them. Departments and organizations can gain insights into the processes and decision points of those they interact with.
Add to this the power of simulation, and it is then possible to explore the different scenarios that could occur. This allows for the preemptive identification of issues that could impede compliance, paving the way for a more proactive approach to meeting DSCSA requirements. Industry stakeholders can use simulation to play out scenarios, such as disasters or nefarious activity, that would be prohibitive to execute in real life. What’s more, using simulation-powered digital twins aids in operational streamlining. Also, it plays a crucial role in verifying the effectiveness of serialization and data exchange protocols, ensuring that every step of the supply chain is aligned with the DSCSA statute.
During a workshop with a trading partner and regulatory stakeholders, the effectiveness of using digital twin technology was highlighted. Participants interacted with simulated DSCSA data for different supply chain participants across multiple scenarios. These scenarios introduced product and information flow exceptions. The simulation allowed participants to see the perspective of each simulated supply chain participant, work through exception resolution processes, and identify unresolvable situations. By simulating various supply chain scenarios and potential exceptions in the virtual space of the digital twin, the workshop participants were able to identify candidate resolution processes and data-sharing opportunities. Traceability and transparency exercises through simulation-powered digital twins significantly bolstered consensus on interoperable processes and data to enhance drug supply chain security and compliance.
What next?
The adoption of simulation technology and digital twins marks just the beginning of a technological renaissance in drug supply chain management. Looking forward, AI’s predictive analytics will offer an opportunity to create increasingly accurate simulations, enable predictive modeling, and identify potential system-wide design issues.
Right now, with the help of these simulations, we are making real progress toward achieving the requirements of a decentralized model supported by interoperability standards and specifications.
About Bob Celeste
Bob Celeste is the founder of the Center for Supply Chain Studies, a nonprofit organization designed to support the healthcare supply chain in advancing education, improving efficiencies, and streamlining compliance through the adoption of simulations. Instrumental in the publication of the first Drug Supply Chain Security Act (DSCSA) in 2013, Bob has a huge reputation in the pharmaceutical industry, specializing in business process re-engineering, information development and standards development. A regular keynote speaker, Bob continues to talk on a range of topics pertinent to pharmaceutical and medical device supply chain issues, advocating for robust electronic drug tracing standards.