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Dealing with Negative Returns: How to be Responsibly VRS-compliant?

Dealing with Negative Returns: How to be Responsibly VRS-compliant?


Surge in negative returns during the VRS process in the drug traceability industry can cause millions of dollars to companies. Negative returns are often incurred when single scanners are unable to screen through 2D barcodes, which multiscanners can do. The use of AR-enabled multiscanners can bring improvement in the rate of negative returns by eliminating the chance of non-readability.
Editor: Kaustav Sarkar Last Updated: 18-Nov-2020

A lot has been discussed about the building blocks of traceability- Unique identification through serialization, data capture through 2D and Datamatrix barcodes, link management and data communication through scanning; Thanks to the Drug Supply Chain Security Act requirements that have kept all the stakeholders of the pharmaceutical industry, one of the oldest industries in the world, busy with the realization and the implementation of every step of compliance since 2013. We have discussed enough why all these steps have helped reducing the circulation of counterfeit drugs in the mainstream supply chain of the drug industry, thus provoking the near-elimination of fatalities caused due to the consumption of these medicines.

But there’s more to it that needs our equal attention. Every action has its equal and opposite reaction and so is the case with the pharmaceutical supply chain that is warming up to the need for compliance at a galloping speed. The ramifications as a result of this might seem insignificant, but growing figures of drug wastage force us to think otherwise.

Here’s how.

Let’s eliminate, not waste

Drug manufacturing is a continuous process, which ought not be terminated at any given point in time. So while the world was worried about manufacturing DSCSA-compliant medicines, a manufacturing unit untapped by regulatory bodies was still pumping medicines with single-scanner barcodes.

So, by the time these drugs reached the pharmacist, they were rendered unidentified by the advanced GS1 multiscanners already in place. Now, what happens next? Here’s where the entire process of saleable returns comes in, again a brainchild of DQSA, to ensure that the unidentified are correctly identified, repackaged and brought back to the mainstream drug supply chain- all in a distributor’s warehouse setting.

It is not as simple as it may sound, at least when we analyze the numbers.

Close to two-third of all drugs returned for sale still end up in trash due to negative verification. This, nullifies the purpose of the VRS (Verification Router Service) compliance standards that were meant to ensure that saleable drugs remain in the line of management and the counterfeit is discarded.

What is negative verification in the context of pharmaceutical tracking?

VRS can be better understood if we conceived ‘Negative Verification’ clearly. So, what exactly it is? Once the unverified drugs are sent back by the dispensers or the pharmacists to the wholesale distributors, they have to be verified for authenticity and repackaged or purged, depending on the information obtained about the visibility of the medicine.

Existing drug batches with 2D barcodes often fail the test and are rendered ‘unverified’ because the advanced multiscanners guided by DSCSA requirements fail to read the dated codes and simultaneously gather information. This scenario is known as Negative Verification.

How much of the drugs is lost to it? According to a GS1 barcode study conducted in 2018, merely 6.6% of the 2D barcodes with all the four elements- National Drug Code (represented by a Global Trade Item Number®, GTIN®), serial number, lot number and expiration date- could be read by present-day scanners. This translates into the fact that only 93.4% of the entire lot went down with negative verification.

This brings us to the challenges that arise from negative verification and its surge.

Challenges of negative verification

Handling the saleable returns already involves cost of handling, which is time consuming too. Unverified saleable returns will just add to the figures because manual intervention is required for verification of the products from manufacturers, which further stretches time and cost, not withstanding the products lost to expiry in the process.

It is noteworthy here that as per statistics released by the FDA and the GS1, almost all of the 93.4% of negatively verified products can be easily resaleable amounting to $11bn annually, which leaves the wholesalers no other option but to get labour involved in the verification process. Consider this.  Wholesalers with a capacity of stocking 75,000 units receive an average of 226,000 units of saleable returns everyday.

-What happens to these returned items?

The step we are going to discuss now is extremely crucial for warehouse distributors since this decides whether he is VRS-compliant or not. Once a product is returned unidentified or considered a suspect, the DSCSA requires you to come up with a prompt clarification within 24 hours. Now this also includes the time required for branding a product ‘unverified’. That leaves distributors with less than 24 hours to verify and send the FDA a justification for your course of action or file an FDA 3911 notice.

-Filing the 3911 notice during saleable returns

Those who are aware of the process would know how difficult and time-taking filling up this form is. It must be mentioned here that the file is prepared only when a distributor decides to ‘destroy’ an unverified saleable return. Three pages of cumbersome instruction, coupled with 23 questions to validate your response to a consignment takes more than an hour to furnish. Furthermore, the FDA-assigned incident number has to be saved for all subsequent submissions related to the notification.

It is left to one’s imagination how much labour it would require to fill up all those forms after the verification process to meet the 24 hour deadline set by the DSCSA, unless of course you have resorted to VRS systems that can both handle verification requests for wholesale distributors and replies for drug manufacturers.

What if you fail to meet the deadline? Well, this brings us to our next major challenge that requires independent attention.

Failing to meet the DSCSA compliance

If any of the above-mentioned steps are missed or the process of informing the FDA about the unverified or destroyed returns are conducted incorrectly, stakeholders will be subjected to pay millions in fine or might receive a Form 483 Warning Letter. Stakeholders also have to embrace the fact that they have to document every single step along the way of the returns turned to destroy or saleable goods, which should be produced at the time of VRS audit. Failing which, there is a further risk of being fined and receiving another warning letter.

The brand image is clearly at stake in such a situation.

This brings us to our next point of discussion- the SOLUTIONS.

Will merely having multiscanners suffice?

Many would agree but we don’t, especially because of the gravity of the work and its impact on the drug supply chain management- revenue wise and operation wise. It needs mentioning here that an unverified lot can stall the end-to-end operations of the supply chain, leading to revenue loss and delayed delivery of medicines to anticipating customers.

Multiscanners can help, certainly, but can they really do more than just gathering the expiry date and production date of medicines? Solving the issue of increasing negative verification would require a lot more, including documentation.

While there are a number of multi scanning and rapid screening service providers, there are only a handful to use the vision scanning technology tracking the entire journey of the drug in the supply chain, thus validating its authenticity in the supply chain. Augmented Reality (AR)-enabled multiscanners are built on the concept of API-first technology that enable them to communicate with any two FDA labeler code owner without having to interfere with their existing framework. The patch-up is simple and easy to use, ensuring that the right data is obtained from the right sources within fraction of a second. This is possible only with RX-enabled multiscanners.

Now, that our primary solution nears closure, let’s focus on how our secondary problem of duly filling up the FDA 3911 notice.

The data retrieved by the AR-empowered RX-multiscanners are organized and processed by a traceability portal that trails the entire journey of the drug consignment and the status it is in- consignment management, quarantine or destroy.

Details of the results at every stage is populated automatically, helping manufacturers, wholesale distributors to speed up the process of filling up the FDA form. You need not look into the data manually or shuffle through hand-written reports to find the exact data to populate. Choose your VRS provider judiciously and check if they have any of the above-mentioned features to offer.

With just above a month left for the VRS compliance deadline, it is high time you chose quality over costs; Because such features might score high on the investment quotient, but stakeholders must remember that it would not add up to the figures any further, but reduce them. Imagine how much time and money they can save in streamlining the verification process, leaving them the scope to think about the next DSCSA milestone in 2023 in advance.

So, be compliant the right way!