The new question for retailers: ‘Are you tracking?’

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Product transparency is fast-becoming an industry standard — across virtually every channel. This visibility throughout the supply chain supports consumer preferences for locally sourced and/or ethically produced product, and allows manufacturers and distributors to proactively update progression and status as well as minimize disruption and mitigate customer risk.

Dave Wendland

As it relates to transparency across the pharmaceutical supply chain, one of the most important laws affecting pharmacies is the 2013 Congress-enacted Drug Quality Security Act (DQSA). The law is comprised of two distinct parts: the Compounding Quality Act and the Drug Supply Chain Security Act (DSCSA), which is focused on tracking and tracing prescription drug products through the entire pharmaceutical distribution supply chain.

The requirements of DSCSA apply to all business types, from manufacturers, distributors and repackagers to third-party logistic companies and dispensers (including all retail pharmacies). This was largely a pre-emptive response as states — most notably California and Florida — were taking measures into their own hands to establish rules and guidelines for tracking and tracing pharmaceutical drugs through the supply chain to ensure patient safety.

During the House Appropriations subcommittee hearings conducted in March to review the Food and Drug Administration’s $6.2 billion budget request for FY2021, lawmakers questioned FDA Commissioner Stephen Hahn about drug supply chain security and foreign inspections. The coronavirus outbreak had revived concerns for some that the U.S. is far too reliant on China, India and other countries for manufacturing finished drugs and active pharmaceutical ingredients (APIs).

While Hahn said he believes the U.S. drug supply is “safe and secure,” he acknowledged that FDA does not always have “full and robust information about the supply chain,” and that the agency needs to look into manufacturing redundancies and determine where APIs and finished drugs are sourced. Hahn also testified that FDA needs legislative authority to require medical device manufacturers to notify it of shortages. As a result of the global pandemic, measures should be considered to make substantive changes to how, where and when pharmaceutical products are manufactured.

In the initial stages of the coronavirus spread, we saw hand sanitizers being produced in the black market and entering the supply chain. The same potential exists for counterfeit prescription drugs to find their way into a disrupted market, such as hydroxychloroquine as a potential medication to combat COVID-19. In addition, consumers hoarded or stockpiled medications in fear of an elongated quarantine or lapse of professional services which can lead to products moving more expeditiously through the supply chain, causing track-and-trace requirements to be compromised.

Looking forward, Hahn said that moving to advanced manufacturing can promote more agile production of drugs and medical devices in the U.S. “I think we have to do whatever we can to stimulate advanced manufacturing in pharmaceuticals and to encourage domestic production. I think that will give us the appropriate redundancy and allow for essential medicines and vaccines, in particular, to ramp up when we need to,” he said.

Managing the movement of goods through the supply chain touches virtually every industry. The full route to market — from the farm operation that grew romaine lettuce that was then transported through multiple distribution points, reached retail shelves (and hands) and ultimately landed on a consumer’s plate and caused illness — must be traceable in detail to understand where the mishandling originated. This visibility must extend to apparel, durable goods, electronics and every other product that can affect consumer safety.

Another burgeoning area that is ripe for improved traceability and one that is squarely in the crosshairs of the retail health care space is cannabidiol (CBD) and hemp-derived products. Without regulation of these products, some may have questions about the growing, harvesting, production and additional ingredients in the flood of CBD products that have been entering the market. Visibility not only to the source of the crops, but also the level of THC at the point of manufacturing or packaging will become imperative to ensuring these products are safe and effective, which will increase consumer ­confidence.

Through the years much has been written about end-to-end visibility across supply chains. The promise of blockchain, the need for interoperability across entire supply chains, and access to time-critical (accurate) information is constantly in the news. Visibility is more vital than ever before.

The most obvious, and usually the primary reason that companies increase supply chain transparency is to comply with internal governance and external regulations (as evidenced by DQSA). The return on the mounting investments to deploy transparency remains difficult to quantify. However, there are also consumer-oriented reasons to promote transparency — not the least of which is to demonstrate and reinforce trustworthy and responsible business practices.

Regardless of the driving force behind transparency, it has quickly become a table stake across every industry. And retail leaders are increasingly being asked, “Are you tracking?”

Dave Wendland is vice president of strategic relations at Hamacher Resource Group Inc. (HRG).



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