The pharma supply chain transformation continues to underpin an explosion of digital solutions that are addressing a multitude of dimensions across the sector. TripleTree recently dove into the key trends driving change in the pharma supply chain. Now we are spotlighting a key provision that will influence the future of M&A activity in this space.
One common thread throughout the pharma supply chain is the desire for more transparency and tracking capabilities. With the full implementation of the Drug Supply Chain Security Act (DSCSA) in the United States in late 2024, it’s important to understand the intent, key provisions, and a prognostication on the impact to relevant M&A activity.
The DSCSA and Its Impact:
The DSCSA is a landmark US law designed to build an interoperable, electronic system to track and trace prescription drugs at the package level. The goal is to protect consumers from counterfeit, stolen, or otherwise harmful products. As of November 27, 2024, the FDA’s ‘stabilization period’ ended and the full enforcement of DSCSA's interoperability requirements took effect, mandating that all trading partners—manufacturers, repackagers, wholesale distributors, and dispensers—must be able to exchange product transaction data electronically.
Key DSCSA Provisions:
- Serialization and Product Tracing: Every prescription drug package must have a unique product identifier (a 2D barcode) containing its Global Trade Item Number (GTIN), serial number, lot number, and expiration date.
- Data Interoperability: Trading partners must exchange this information electronically using a secure and standardized format, such as the Electronic Product Code Information Services (EPCIS) standard.
- Authorized Trading Partner (ATP) Requirements: All entities in the supply chain must be licensed and authorized to conduct business, ensuring that only legitimate partners are participating.
Key Takeaways:
We are still in the early phases of the post-stabilization period, but the practical realities of DSCSA compliance requirements have surfaced issues around compliance “exceptions” (e.g., mismatch between product and corresponding electronic data), data quality & interoperability, and an overweighted burden on dispensers. There are a number of emerging technologies and tech-enabled vendors which we believe will fuel M&A activity over the coming years as both large strategics and investors will seek out solutions with clear ROI, a scalable growth trajectory, and a pathway for addressable market expansion.
At TripleTree, we’ll continue to provide insights about how the pharmaceutical industry is driving technology changes across healthcare - resulting in meaningful solutions that are addressing the industry’s rapidly evolving challenges. Read more about how technology is transforming the healthcare landscape in previous TripleTree publications or reach out for more information.
