All You Need to Know Manufacturer s DSCSA Perspec've Why to Work Closely with Wholesalers. Confiden'al Copyright 2014 All Rights Reserved

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1 All You Need to Know Manufacturer s DSCSA Perspec've Why to Work Closely with Wholesalers Copyright 2014 All Rights Reserved BOOT CAMP Bseptember 9, 2014

2 Panel Discussion: Work Closely with Wholesalers and Dispensers to meet Requirements and Put a Long- Term Strategy in Place Moderator: Carl Acce.ura, VP & GM, PharmoRx Therapeu;cs Panelists: Priya Gopal, Associate Director, Novar;s Dirk Rodgers, Founder, RxTrace Mike Daly, Director, Valeant Pharmaceu;cals Copyright 2014 All Rights Reserved

3 Work Closely with Wholesalers and Wholesalers Dear Valued Manufacturer Partner P DSCSA LeUers in Winter/Spring Manufacturer- Wholesaler Business Process Impacts Manufacturer- Wholesaler Contracts & Agreements Impacts Copyright 2014 All Rights Reserved 3

4 Work Closely with Wholesalers and March 10, 2014 Regarding: Title II Drug Supply Chain Security of The Drug Quality and Security Act (DQSA) signed by President Obama November 2014 Contracts and Agreements Impacts Dear McKesson Supplier, This letter is being made available to all suppliers from whom McKesson purchases pharmaceutical products making them aware of the recently signed DQSA law. McKesson encourages all Suppliers to review the requirements for manufacturers of pharmaceutical products in Title II of DQSA. The full text of the law can be found at: Of critical importance are the following near term key dates: - May 26, 2014 Expected release date of FDA suspect product identification guidance. - November 26, 2014 FDA to issue standards for interoperable exchange of transaction information (TI), transaction history (TH) and transaction statement (TS). - January 1, 2015 Manufacturers/Suppliers must provide TI (including lot level information), TH and TS in a single document when transferring ownership of a product. Below are critical manufacturers compliance dates to enable McKesson to be fully compliant with DQSA by January 1, The requirements are for all products meeting the definition in DQSA Section 581 Definitions (13) Products. These dates were selected to provide adequate time to effectively test and correct data exchange errors well before the January 1, 2015 deadline. Our goal is to migrate to the successful exchange of data without creating service level issues with your products. - March 22, 2014 By this letter McKesson is asking Manufacturers/Suppliers to take action on the following 2 items and send your responses to TraceabilityTeam@mckesson.com: 1. If your company is selling McKesson a RX product you believe is exempt from DQSA requirements, please provide documentation including specific disqualifier by item. 2. Provide a list of RX products you ship to McKesson where you do not meet the following definition of Manufacturer. Manufacturer The term manufacturer means, with respect to a product- (A) a person that holds an application approved under section 505 or a license issued under section 351 of the Public Health Service Act for such product, or if Copyright 2014 All Rights Reserved 4

5 Work Closely with Wholesalers and Memo to Manufacturers Regarding the Drug Quality and Security Act What We Would Like You to Do By January 1, 2015, manufacturers will need to send transaction data in electronic format for Lot Traceability. Advance Ship Notices (ASN) - electronic documents transmitted via EDI satisfy the requirement set forth on transactional data exchange. We will also accept transactions in EPCIS data format. AmerisourceBergen will be looking to comply with the requirements with the following: We will accept an electronic ASN file thru EDI, preferably via AS2, using HDMA published guidelines effective on or after April 30, If you are not able to submit electronically through EDI, we can recommend a third-party provider to create the ASN and they in turn can submit electronically through EDI on your behalf. Should you decide to implement an electronic ASN format AmerisourceBergen will happily test the functionality with you to ensure your system is aligned with us, starting in July Additionally, ABC has contracted with a third party to provide ASN Syntax and format testing. We will accept an EPCIS data formatted file, using GS1 US guidelines version 1.2 to be published in April/May You will need to continue to send the paper packing slips as you do today, as we use the packing slips to adhere to other unrelated regulatory requirements. What You Can Expect from AmerisourceBergen AmerisourceBergen is committed to working with you as we establish processes that will help enable our manufacturer partners to comply with this new legislation. We ll be providing regular communications on this effort to keep you informed on our progress and we will be working with you to ensure that there is training and/or onboarding available as we implement the new federal mandate. Contracts and Agreements Impacts Copyright 2014 All Rights Reserved 5

6 Work Closely with Wholesalers and Wholesalers Dear Valued Manufacturer Partner P DSCSA LeUers in Winter/Spring Manufacturer- Wholesaler Business Process Impacts Manufacturer- Wholesaler Contracts & Agreements Impacts Interoperability Data Standards & Challenges P Lay the founda'on for electronic tracing P Pilot opportuni'es as 2017 requirements hit Strategies on efficient capture & exchange of Data P GS1 Work Groups and GS1 Pharma Industry Call P EPCIS 1.1 and Use Cases building for DSCA compliance Copyright 2014 All Rights Reserved 6

7 Compliance Driven Business Results C + ROI The Vision Manufacturers inves;ng to comply with drug safety laws can realize enormous collateral business gains from scan data to increase the visibility to and control of products in the supply chain. Commercial models can be transformed based upon trading serial numbers. The Play Establishing an interoperable system among trading partners and other stakeholders (i.e. real ;me scanning of units in & out ), simultaneously increases the efficiency and effec;veness of inventory management and financial repor;ng. Copyright 2014 All Rights Reserved 7

8 Compliance Driven Business Results (C+ROI) The Benefits 1 Increased accuracy of inventory accoun;ng and disposi;on 2 Improved supply- demand balancing to be.er signal produc;on requirements 3 Improved tracking of new product sales and reorders 4 Reduced ;me and expense devoted to chargeback and rebate reconcilia;on 5 Reduced cargo security risks and inventory the` 6 Improved effec;veness and efficiency of the product recall process 7 Increased supply chain velocity- reduced lead ;mes 8 Increased knowledge of shipments into each class of trade- fewer drug shortages 9 Improved effec;veness and efficiency of product returns processing 10 Reduced financial exposure and liability due to expired and damaged goods 11 Improved tracking and tracing of drug samples and clinical trials inventory 12 Reduced gray market diversion and unauthorized pricing arbitrage Copyright 2014 All Rights Reserved 8

9 Strategic Opportunity First to Market u;lizing abuse deterrent packaging for opioids can differen;ate across the stakeholder spectrum & create a new standard in pa;ent management Posi;oning as a leader in Product Safety and Improved Services & Outcomes Improve Physician Confidence Increase Prescrip;ons Establish Preferred Formulary Posi;ons Overcome Pre- Authoriza;on Hurdles Address 340B Drug Discount Program Tracking Enhancing REMS compliance Create Outstanding ROI Copyright 2014 All Rights Reserved 9