Insights

The Wholesaler Dilemma: How to Legitimately Sell Returned Medicine

By Marc Blekkink, Managing Partner, Movilitas.Cloud

Every year in the United States, millions of pharmaceutical products are returned in saleable condition. If verified as legitimate and safe, these drugs can be placed back in the supply chain for resale—but for that to happen, the manufacturer must validate them as genuine.

The Healthcare Distribution Alliance (HDA), the national organization representing primary pharmaceutical distributors, helped drive a system called the Verification Router Service (VRS) to help wholesalers and manufacturers exchange the information needed to verify returned pharmaceuticals.

 

VRS Requirements and Process

Approximately 60 million saleable pharmaceutical returns occur in the U.S. market every year, accounting for 2-3% of total sales (Source: HDA). The main reason why pharmacies return pharmaceutical products to wholesale distributors is overstocking. According to a recent report from HDA, overstocking caused 87,2% of product returns.[1] Additionally, “the total annual costs associated with the returns process have increased since 2015, and now average $4.7 million per company.”[2] This means that wholesale distributors must be able to obtain and provide product authenticity quickly and simply to reintroduce the products into the supply chain safely and efficiently.

The Drug Supply Chain Security Act (DSCSA) mandates that wholesale distributors verify the serialized product identifiers of any saleable returned pharmaceuticals. The requirement comes into force in November 2020.

To meet the requirement, a wholesaler must verify returned products with the manufacturer before they can be resold. The wholesaler initiates a verification request to the manufacturer, who must respond within 24 hours with a verification response. Verification includes ensuring the product identifier is correct and true, including the serial number, lot number, expiration date, and Global Trade Item Number (GTIN).

To facilitate the verification process, the HDA brought together pharmaceutical manufacturing and distribution stakeholders to create a framework for exchanging information automatically. The result is the VRS, an automated service and protocol that enables wholesalers to verify product identifiers with the correct manufacturers. VRS providers handle requests for specific groups of product identifiers. A wholesaler needs to make use of an official VRS provider to have access to the VRS network to verify a product identifier. The network uses a Lookup Directory (LD) to automatically route the request to the correct VRS provider that handles this product identifier. Finally, this VRS provider makes a query to the manufacturer’s database and sends the response in real time back to VRS provider of the wholesaler. A VRS provider can be both a requester and responder, which means the wholesaler and manufacturer can have the same VRS provider.

 

How Movilitas.Cloud Product Verification DSCSA Can Help

The Movilitas.Cloud scanning and verification solution includes a VRS and Lookup Directory that helps streamline the exchange of product tracing information between wholesale distributors and manufacturers. When a product is scanned, the VRS consults the internal LD to determine how to route it, automatically sending the request to the VRS of the product manufacturer. The product identifiers are then verified against the manufacturer’s product serialization data in real-time.

With the Movilitas.Cloud solution, you can comply with the DSCSA Saleable Returns Verification requirement quickly, usually in an hour or less, connecting easily to every manufacturer’s repository of serial numbers for verification and validation so that you can resell returned pharmaceutical products. Take a look at our guide to learn more about how Movilitas.Cloud can help you solve your DSCSA compliance and tracking challenges.

Download Guide

 

[1] 90th Edition HDA Factbook: The Facts, Figures & Trends in Healthcare (2019-2020)

[2] https://www.hda.org/sharedcontent/news/2017-12-05-hda-foundation-releases-annual-factbook