The Drug Supply Chain Security Act (DSCSA), established in 2013, set a foundation for tracking and verifying pharmaceutical products across the United States. However, while the regulations have been phased in for over a decade, its regulatory requirements continue to evolve, introducing new challenges for the industry. As the landscape shifts, pharmaceutical companies, distributors and other key stakeholders must remain agile and prepared to adapt to ongoing changes to ensure compliance and safeguard the drug supply chain. 

Exemptions designed to ease supply chain strain

DSCSA was enacted to create a more secure and transparent pharmaceutical supply chain. Prior to its enactment, various state-level initiatives aimed to achieve similar goals. The FDA has established a phased enforcement plan for DSCSA, with specific deadlines for different stakeholders:

• Manufacturers and Repackagers: May 27, 2025
• Wholesale Distributors: August 27, 2025
• Large Dispensers (26 or more FTEs): November 27, 2025
• Small Dispensers (25 or fewer FTEs): November 27, 2026

The end goal after all the DSCSA enforcement dates is for a fully interoperable supply chain—products serialized; data exchanged with trade partners.

L4 traceability and DSCSA compliance

Having a robust Level 4 (L4) traceability solution is critical to meet DSCSA requirements, combat counterfeiting and enhance supply chain visibility. Contract Pharma recently surveyed over 100 pharmaceutical organizations of different sizes, geographic locations and product portfolios using various L4 solutions. The findings—analyzed in this L4 Benchmark Report and referenced throughout the article—provide valuable insights into the current state of the L4 market by examining the experiences and priorities of these companies.

According to the report, 41% of surveyed companies cited manual rework processes as a major pain point, indicating that existing solutions require significant human intervention, leading to inefficiencies and increased operational costs. Additionally, 31% of respondents reported dissatisfaction with data exchange errors, a critical issue given DSCSA’s emphasis on accurate product traceability.

These findings underscore the need for wholesalers and other trading partners to brace for a potential surge in quarantined products. Many are already exploring automation solutions to minimize manual rework, streamline processes and prevent bottlenecks in the supply chain.

Navigating exception management

One of the major challenges under DSCSA is exception management. Exceptions refer to supply chain disruptions such as incorrect shipments, wrong addresses and damaged products. If exceptions are not managed within a specific Service Level Agreement (SLA), the products are quarantined and cannot continue moving through the supply chain.

Systech outlines a four-step process that allows businesses to manage exceptions quickly, whether they occur on the line, in the warehouse or across the supply chain.

1. Automate: The first step is to integrate automation solutions to streamline operations by reducing hours spent checking and reconciling data. With 61% of surveyed companies prioritizing seamless data exchange, automation tools play a crucial role in ensuring compliance.
2. Analyze: Next, identify potential exceptions by carefully examining files for data accuracy. This involves using tools that can check the formatting and completeness of data, helping to prevent errors before they escalate into larger issues.
3. Collaborate: Exceptions often involve multiple stakeholders across the supply chain. Effective collaboration requires all involved parties including manufacturers, distributors and contract packagers—to work together to resolve issues.
4. Rework: Rework refers to fixing issues after they have occurred. Advanced rework tools enable companies to handle physical product corrections, a crucial component of managing exceptions that go beyond just data adjustments. With 39% of respondents reporting difficulty integrating their current L4 solutions with existing systems, improved interoperability is key to making rework processes more efficient.

Other key considerations

Verification Router Service (VRS) is another important component of DSCSA compliance, streamlining the process of verifying pharmaceutical products in real time. By automating verification requests, VRS helps downstream trade partners efficiently track and authenticate products throughout the supply chain. This not only minimizes the risk of human error but also enables companies to quickly address issues such as returns or potential counterfeit products. As the DSCSA framework continues to evolve, implementing VRS remains a critical step in maintaining compliance and ensuring the security of the pharmaceutical supply chain. 

Staying ahead 

Contract manufacturers and packagers can leverage technologies to enhance efficiency and stay ahead as the regulatory landscape matures. Seamless integration of these technologies depends on a well-managed roadmap, proactive planning and cross-functional collaboration between packaging, IT and regulatory teams. By anticipating future needs, organizations can better secure their operations, improve traceability and future-proof supply chains. 

Aggregation: While not a legal requirement, aggregation has proven to be essential for many to enhance supply chain visibility and operational efficiency. It streamlines reconciliation, simplifies recalls and helps prevent diversion by linking individual units to cases and pallets. Aggregation is a must for ensuring full traceability. Those who invest now will gain a stronger, more resilient supply chain. 

Data integration (APIs, cloud systems): As DSCSA compliance requires seamless data exchange among trading partners, integrating modern technologies like Application Programming Interfaces (APIs) and cloud-based systems is essential for contract manufacturers and packagers. APIs allow for real-time, automated data sharing between different stakeholders in the supply chain, which ensures that all parties have access to the same up-to-date information about each product’s status, reducing the potential for costly errors.

Cloud systems also play a key role by enabling centralized data storage and accessibility, allowing businesses to efficiently manage and analyze large volumes of supply chain data. By leveraging cloud solutions, CMOs and packaging partners can significantly lower compliance costs, enhance regulatory reporting accuracy and simplify data management processes. 

Artificial intelligence (AI): Emerging AI technologies have the potential to improve efficiency and reduce errors by automating manual processes, analyzing data and predicting potential issues in the supply chain before they escalate. One example of this application is line clearance, where the use of smart cameras can augment the process of inspecting production lines to ensure they are free from contamination or residues from previous runs. By integrating AI solutions into their operations, CMOs and packagers can better detect and reduce errors while optimizing workflows as compliance becomes more robust. 

What’s next?

As companies navigate compliance requirements and shifting deadlines, collaborating with industry partners, automating processes and leveraging innovative technology, will be essential to maintaining supply chain integrity and ensuring patients have uninterrupted access to critical medications. With 81% of surveyed companies identifying compliance reliability as a top priority, a forward-thinking approach will keep businesses compliant and operationally strong while securing supply chains and protecting patients.

Joe Lipari is Director of Product for Systech and is responsible for its serialization, traceability and brand protection product suite. Joe has successfully executed the product vision by expanding Systech’s cloud-based traceability platform to include end-to-end supply chain use cases, deploying an intelligent data layer to harvest and visualize critical packaging data and creating comprehensive, connected product roadmaps across the Systech platform.