The Race for Pharma Traceability

The LocatorX Team

November 22, 2019

November 22, 2019

Americans are not shy about prescription drugs. Nearly half of the U.S. population (46%) took one or more pills in the last 30 days, according to a recent survey by the National Center for Health Statistics. 

This is no overnight trend — the number is actually a slight drop from ten years ago. A key difference, though, is the virus-like increase in counterfeit drugs and resale of drugs through online markets. People are acquiring their medication through these shady avenues when legit prescriptions are too expensive, their doctor won’t sign off on a refill, or in the myriad cases of misuse. This is where counterfeiters enter the picture, cashing in on the demand with imposter prescriptions. 

Counterfeit Issues in Pharma Supply Chains

The problem extends well beyond money being lost. As millions of families are tragically learning, one wrong pill can be fatal, including the 27% of counterfeit pills seized by the DEA that contain “potentially lethal doses of fentanyl.” Countless others are laced with street chemicals or hard drugs like cocaine and heroin.

It’s a mountain of a problem, with no direct path to the top. Experts agree, though, that improved traceability is an obvious and necessary step forward. In the fall of 2013, Congress enacted new legislation to address the flaws in our prescription supply chain. The Drug Quality and Security Act (DQSA) — and more specifically Title II, the Drug Supply Chain Security Act (DSCSA) — calls for an “electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.”

In other words, the DQSA outlines steps for a digital tracking system, standardized across the pharmaceutical industry. By tracing each pill container from its origin to the final destination, those involved in the process can protect consumers from counterfeit, stolen, or contaminated drugs, and remove potentially dangerous drugs from the supply chain before they can be used.

Here’s the catch: The pharma supply chain is big. Real big. 

Pharma Traceability

Proper traceability requires a sweeping update to one of our largest industries. North America accounts for more than one-third of the global pharmaceutical drugs market or around $340 billion in 2017. And its size is matched only by its complexity. For the desired level of traceability, the planned overhaul will touch on everything from barcode printing to packaging automation, not to mention the development and testing of product identification codes and tracking systems (aka serialization). 

There’s work to do, and that’s putting it lightly.

Knowing the hurdles and scope of this transformation, the DQSA was laid out in phases that stretch across an entire decade. The final phase — known as Enhanced Drug Distribution Security (EDDS) — begins in November 2023. 

In the run-up to 2023, businesses involved in this supply chain are tasked with learning the ins-and-outs of DQSA regulations and making strides toward compliance. Requirements are laid out for manufacturers, distributors, dispensers, and third-party logistics providers (trading partners).

The race is on, and pharma-related companies are investing heavily in equipment and process upgrades to meet regulations in time for various deadlines. One such deadline is November 27 of this year, at which point wholesalers will be restricted to transactions only involving products with a product identifier. A similar requirement for dispensers lands on the same day in 2020.

For better or worse, companies in this supply chain are taking their own own routes to meet the obligations expected of them, with no catch-all process in place. Thousands of diverse businesses are on the clock to make significant (and costly) changes, with the shared purpose of improving operational efficiency and saving lives. 

The dangers of counterfeit and mishandled drugs become more glaring with each new report — for instance, a recent estimate that fake drugs kill more than 250,000 children a year. It’s safe to say that, with the current infrastructure, these woes will only worsen. So while traceability guidelines are adding pressure to these business owners, the initiative is long overdue. Well-meaning businesses in the pharmaceutical industry will be eager to oblige, even with the challenges that undoubtedly lie ahead. 

Traceability Technology

Advancements in blockchain and the Internet of Things (IoT) are an exciting subplot in the pharma traceability story. For example, the Healthcare Distribution Alliance (HDA) began work in 2017 on a blockchain-based network to meet track-and-trace components of DQSA regulations. Today, the network (The MediLedger Project) is being piloted by 9 of the top 20 pharmaceutical companies in the world, and 2 of the top 3 U.S. wholesaler distributors. 

New technologies are not without their own risks, including performance issues and security vulnerabilities. This is par for the course with digital transformation. Creativity and risk-taking may be not only beneficial but necessary for thousands of businesses to meet traceability demands. This is, in a way, fighting fire with fire — as modern technologies have made the black market of pharmaceuticals what it is today. Pharma companies will need all the help they can get, and emerging tech will play a major supporting role in the coming years.

The sense of urgency is palpable. Counterfeiters and resellers are likely going into overdrive ahead of the coming changes, reinforcing the need for standardized traceability and other countermeasures — and fast. It will require a vigilant eye to keep our families safe as the pharma industry races toward its next chapter. 

For more information on identifying potential counterfeits and next steps to take, we encourage readers to visit If you have health issues that could benefit from prescription medication, you should ask a qualified doctor rather than search online or seek pills from friends or strangers. Spread the word and stay informed — it’s better to be safe than sorry when it comes to prescription use.


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