On November 27, 2017—the very day manufacturers and repackagers were required to begin using product identifiers in compliance with the DSCSA—the FDA finally issued their guidance document on grandfathering. Despite coming two years later than scheduled, Grandfathering Policy for Packages and Homogenous Cases of Product Without a Product Identifier was happily received throughout the industry.
While the policy only covers grandfathering, it promises future guidance on waivers, exemptions, and exceptions, and—coupled with other known guidance documents on the same topics—it finally puts some big uncertainties to bed. Let’s unpack what the guidance document has to say about grandfathering, and what it means for manufacturers and their downstream trading partners.
The FDA guidance confirmed everyone’s expectations: Drug products manufactured and packaged before November 27, 2018, can enter the supply chain without a serialized product identifier free of penalty. The policy explains that the FDA does not intend to take action against manufacturers “who do not affix or imprint a product identifier to each package and homogenous case of products intended to be introduced in a transaction into commerce before November 27, 2018”. In other words, they are granting a one-year delay for manufacturers to serialize their singles and cases. The policy also explains that the “FDA does not intend to take action against manufacturers and other trading partners who transact such product or verify it for investigatory purposes or saleable returns without using the product identifier.” Meaning non-serialized products that are grandfathered can be traded as usual prior to November 27, 2018.
This is good news for manufacturers, allowing them an additional year to complete their serialization project as well as “stock up” on non-serialized inventory before the new deadline–if it makes good business sense. For details regarding stock up, read my previous blog, “Dealing with the Serialization Deadline: The “Stock Up” Option,” which covers the advantages and the disadvantages of this option.
While the policy adds clarity for manufacturers, their downstream trading partners have a concern: How do distributors know whether the products they receive are grandfathered? Where’s the validation and documentation?
The FDA explains that, “manufacturers retain packaging date information in the ordinary course of business and as a part of batch recordkeeping, and they should provide the packaging date to subsequent trading partners if they request it.”
Will distributors request batch records containing the packaging date? How would these requests be made, responded to, and fulfilled? The DSCSA envisions a future in which pharmaceutical companies track and trace serialized products electronically and interoperably. Requesting and receiving a batch record (often in paper form) runs counter to that vision.
A distributor’s business is based on processing massive transactions at high speed. Upstream delays in receiving spell trouble for downstream order fulfillment. While the expiration date is printed on the product itself, barcoded on the case, and included in the electronic 3Ts (Transaction Information, Transaction History, Transaction Statement), production dates are not. Finding an effective and practical way to communicate the packaging date will be one of the big challenges for wholesale distributors to tackle (among others).
Until all non-serialized inventories are turned over, managing a warehouse with both serialized and non-serialized products is inevitable. I call this a “co-mingled” warehouse. With the grandfathering policy, co-mingling is destined to be a reality to be reckoned with in 2018 and beyond. The ability to manage a serial and lot co-mingled warehouse is crucial for efficient distribution.
LSPediA’s serialization solution RxChain allows companies to manage operations by SKU and by serialization effective date – a perfect tool for dealing with grandfathered products and co-mingled products. RxChain intelligently applies different business rules—serialized receiving for serialized products, and lot-controlled receiving for non-serialized product. Same goes for shipping operations. To learn more about managing grandfathered products, please contact us by email at sales@lspedia.com.
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