The Next Episode | What 13 Years of DSCSA Teach Us About NDC-12 and Pharmaceutical Interoperability
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- #DSCSA
- #NDC12
- #SCS Logistics Security
- #Supply Chain Security
- #Supply Chain Security Steering Committee
The Transactions Haven’t Changed. The Network Has.
Flying home from the HDA Traceability Seminar last week, I saw some news from Philadelphia that put much of what we had spent the previous few days discussing into perspective.
Growing up in Philadelphia, SportsRadio 610 WIP was part of how I followed sports. For decades, Philadelphians tuned into AM radio to argue about the Eagles, Phillies, Flyers, and Sixers. In 2011, WIP moved to 94.1 FM, and this year its programming expanded nationally through SiriusXM. The teams and conversations are familiar, but the technology carrying them, the audience they can reach, and the environment surrounding them have changed considerably. What was once a local AM radio experience now reaches listeners through platforms that would have been difficult to imagine when those conversations began.
At the seminar, a wise and experienced industry veteran captured a similar idea about the pharmaceutical supply chain in five words: “There are no new transactions.”
We still manufacture, identify, order, ship, receive, dispense, or administer, pay for, return, and recall medicines. What changes is how those transactions happen, the technology supporting them, and the number of organizations and systems that have to work together to complete them. That is a useful way to think about what we have learned from thirteen years of implementing the Drug Supply Chain Security Act and, more importantly, how we should apply those lessons to the changes already ahead.
The ecosystem changed while we were building it
When DSCSA became law in 2013, the technology environment looked very different. Cloud adoption across the pharmaceutical industry was still relatively early, many important systems remained on premises, integrations were commonly point to point, and moving and reconciling the enormous volumes of serialized data the industry would eventually generate was itself a significant challenge. Serialization networks, EPCIS exchange, and verification infrastructure were still developing.
Thirteen years later, serialized identifiers, 2D Data Matrix barcodes, EPCIS, cloud platforms, APIs, verification networks, automation, and increasingly sophisticated data tools are part of the operating landscape. The industry did not simply implement DSCSA over thirteen years. It implemented DSCSA while much of the technology required to support it evolved underneath the program.
The supply chain evolved at the same time. DSCSA was developed around a distribution model in which the major roles and pathways were comparatively easy to recognize. Manufacturers and their CMOs or CDMOs produced and packaged medicines, wholesale distributors moved them downstream, and pharmacies dispensed them. Those functions remain, but the pathways connecting them have multiplied.
Today, a medicine may be manufactured or packaged by a CMO or CDMO, move through a 3PL or wholesaler, enter a specialty or central-fill pharmacy, travel through a parcel network, and reach a patient through a manufacturer-supported or telehealth-enabled access model. Meanwhile, the prescription, serialized transaction data, clinical information, claim, and payment may each travel through different organizations and systems. Modern pharmacy models increasingly connect patient acquisition, prescribing, benefit support, dispensing, fulfillment, and longitudinal engagement in ways that were far less prevalent when DSCSA was written.
This creates an important paradox. The technology available to connect the pharmaceutical ecosystem has become dramatically better, while the ecosystem we need to connect has become more complex. From the patient’s perspective, many of these changes can make access appear simpler. Behind that experience, however, the questions of product identity, ownership, custody, accountability, data exchange, and exception management have not disappeared. They now have to be answered across more organizations and more handoffs.
Work backward from the constraint
There is a simple problem-solving idea running through The Martian: solve the problem in front of you, learn from it, and then solve the next one. DSCSA has followed a similar path. The industry first had to serialize product on an enormous scale, which created a data challenge. Once we could generate the data, we had to exchange it, which created an interoperability challenge. As systems became connected, we encountered master-data differences, trading-partner dependencies, and exceptions that could not always be resolved automatically. Each problem solved exposed the next layer of the challenge.
Perhaps the most important lesson, however, came from the downstream end of the supply chain. Manufacturers, CMOs/CDMOs, wholesalers, and major technology providers could make substantial investments in serialization and connectivity, but interoperable traceability ultimately had to work at the dispenser. That meant reaching an extraordinarily diverse population of retail pharmacies, health systems, specialty pharmacies, central-fill operations, and small dispensers with very different systems, workflows, resources, and levels of technical maturity.
FDA’s stabilization period and subsequent targeted exemptions, including certain small-business dispenser exemptions now extending through November 27, 2027, illustrate the practical significance of that endpoint. The lesson is not simply that some participants needed more time. It is that large-scale transformation should be designed by working backward from where the transaction ultimately has to succeed and identifying the most significant constraints in the network early enough to address them.
For DSCSA, the small dispenser became one of those constraints. A sophisticated upstream network could not, by itself, create end-to-end interoperability. The product and its information still had to reach a downstream participant capable of receiving, interpreting, and acting on them, including when something did not work as expected. Had we understood every constraint at the outset, the implementation path might not necessarily have been shorter, but we could have designed and tested more deliberately around the places where the network was most likely to struggle.
That is a lesson we can apply now.
The next handoff reaches beyond the traditional supply chain
The transition to a uniform 12-digit NDC may appear simpler than DSCSA because the change begins with something familiar: the identifier assigned to a medicine. The network touched by that identifier, however, is broader than the statutory tracing network established by DSCSA.
NDCs are used not only in manufacturing, packaging, distribution, and pharmacy systems, but across clinical, commercial, retail, government, and financial processes. They can appear in prescribing and dispensing systems, claims and reimbursement, payer and PBM infrastructure, rebates and chargebacks, government programs, reverse logistics, product databases, and historical records. They also extend into general retail, where medicines move through mass merchants, grocery stores, convenience stores, and other point-of-sale environments.
The physical pharmaceutical supply chain is therefore only part of the NDC-12 implementation network. A package can move correctly from manufacturer to wholesaler to pharmacy or retailer while the identifier associated with it simultaneously has to remain usable across a very different network of software, payment, clinical, and financial transactions.
That significantly expands the number and variety of potential constraints.
If we approach NDC-12 primarily as a labeling, packaging, or manufacturer master-data conversion, we risk repeating one of the hardest lessons from DSCSA: discovering important downstream dependencies after upstream implementation decisions have already been made. Working backward means asking whether the identifier can survive the entire transaction. Can a retailer scan it? Can a pharmacy dispense it? Can a claim be adjudicated and a payer reimburse it? Can a wholesaler process the associated financial transaction? Can a return be reconciled years later, and can a historical record still identify the same medicine after the transition?
These systems do not all perform the same function, and they do not all need the same information. They do, however, need to recognize that they are talking about the same product. The challenge is therefore larger than whether individual systems can accommodate twelve digits. It is whether product identity and meaning remain intact as the medicine moves across physical, clinical, retail, digital, and financial networks.
DSCSA taught us to look carefully at the handoff. NDC-12 gives us the opportunity to apply that lesson earlier by identifying the constraints, endpoints, and dependencies before they become barriers to implementation.
Preparing for the next episode
The pharmaceutical industry has built an extraordinary amount of infrastructure since 2013. Manufacturers and CMOs/CDMOs transformed packaging and serialization operations, wholesalers rebuilt receiving and distribution processes, technology companies created networks and services that did not previously exist, and pharmacies adapted to an entirely new model of serialized data exchange. The work remaining should not obscure what has been accomplished, but what has been accomplished should not obscure what we learned.
The technology will continue to change, and the ecosystem will almost certainly become more interconnected. The lines among manufacturers, CMOs/CDMOs, distributors, pharmacies, retailers, technology companies, healthcare platforms, payers, and financial intermediaries will continue to evolve. The transactions themselves, however, will remain remarkably familiar.
Thirteen years of DSCSA give us an opportunity to approach the next episode differently: start with the transaction, work backward from where it must succeed, identify the most significant constraints early, and test the connections between participants rather than only the systems within them.
NDC-12 will extend those connections beyond the traditional pharmaceutical supply chain and into a broader network of retail, clinical, financial, government, and technology systems. The ecosystem will be more complex, but the lesson from DSCSA is remarkably simple: design for the next handoff before you reach it.
After all, there are no new transactions. The opportunity is to get better at connecting them.