Baymar Consulting LLC is driven to provide pharmaceutical distribution supply chain security solutions to companies seeking to detect and prevent suspect product incidents under the Drug Supply Chain Security Act, such as potentially diverted, stolen or counterfeit products or those which may have been the subject of a fraudulent transaction.
The Nature of the Problem
Our nation’s pharmaceutical supply chain remains at risk. Corrupt individuals continue to have the upper hand, penetrating an under-regulated drug distribution system to engage in fraudulent transactions involving diverted and counterfeit drugs.
Signed into law by President Obama in November 2013, the Drug Supply Chain Security Act (DSCSA) established new requirements for trading partners (manufacturers, wholesale distributors, dispensers, and re-packagers) that engage in transactions involving products. Unfortunately, rampant fraud is likely to continue plaguing our pharmaceutical supply chain, despite this new law. Savvy criminals, undeterred by the changing regulatory landscape, will adapt and thrive as long as prescription drug diversion and counterfeiting crimes are viewed as low risk, high reward ventures.
In fact, as new federal licensing standards for wholesale distributors are developed and ultimately issued by FDA over the next several years, supply chain threats may increase significantly. Driven by the belief these new standards will be more rigorous than the status quo, and perceiving their window of opportunity to be closing, it should be expected that drug diverters will aggressively exploit any current vulnerabilities in state licensing programs. Some of this drug diversion activity could even be reckless and desperate in nature, resulting in serious supply chain incursions. FDA and state regulatory agencies are cautioned to be especially vigilant during this period of transition. While regulators are busy implementing the DSCSA, the bad guys are just as busy, working hard to defeat it.
The DSCSA requires trading partners to have systems in place by January 1, 2015 to promptly investigate suspect products in their possession or control, validate applicable transaction history and transaction information associated with such incidents, and otherwise investigate to determine if suspect products are actually illegitimate products. These concepts and requirements are likely unfamiliar territory for many trading partners. They may also pose a serious challenge to those with limited resources. A robust commitment to evaluating and strengthening supply chain security programs will help to minimize the impact of these potentially burdensome new requirements by decreasing the frequency of suspect product incidents. Tailoring supply chain security programs to address each trading partner’s unique exposure to current supply chain threats is highly recommended.