McKesson, a leading healthcare company for wholesale medical supplies and equipment, pharmaceutical distribution, and healthcare technology, delivers one-third of prescription medicine in North America, supports 15,000 pharmacies and more than 9,000 oncologists and other medical specialists, and offers more than 250,000 SKUs of brand and private label medical-surgical supplies.
Striving – and achieving – supply chain excellence is a top priority for the company, which takes a global approach to procuring and sourcing its products, and reports 99.98 percent order accuracy in North America.
DATAVERSITY® had an opportunity to learn from Scott Mooney, Vice President, Distribution Operations for McKesson Pharmaceuticals, about the company’s Data Management for the Drug Supply Chain Security Act (DSCSA), which outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States. Mooney discussed how McKesson is leveraging GS1 Standards for Data Management in support of DSCSA and supply chain optimization and how it is experimenting with Blockchain for DSCSA.
DATAVERSITY (DV): How does the use of GS1 supply chain standards impact McKesson?
Mooney: We have found that GS1 standards are best suited for product marking/identification and to exchange DSCSA data, regardless of data structure such as Blockchain. We implement standards for full supply chain visibility, which includes globally identifying products and locations (including partner locations), capturing data associated with them in the supply chain.
GS1 Standards are tremendously valuable to our operations because they make our systems truly interoperable with that of our trading partners. They make our business processes more efficient to be able to meet the requirements set forth in DSCSA. Not only are we confident in our ability to meet or exceed DSCSA deadlines, but we can also leverage standards beyond just compliance to be a proactive and communicative supply chain partner.
DV: Can you provide more detail on how McKesson manages DSCSA requirements?
Mooney: McKesson is a full-service wholesale distributor and also has packaging and a generics manufacturing business, as well as being a solution provider for our customers. As such we are both an author of DSCSA data as well as a recipient of DSCSA data, and we serve to assist our customers in storing and managing their DSCSA data through our solutions.
McKesson began transacting DSCSA data with our upstream and downstream trading partners on January 1, 2015 and has been completely electronic in those efforts since that time. While there was enforcement discretion granted for the manufacturer’s November 2017 serialization requirement, McKesson has continued to move forward in working with the industry to create the ability to verify returns for the November 2019 deadline and is looking towards the November 2023 full serialization requirements.
We take the management of DSCSA data very seriously because like most distributors, we internally host DSCSA data, and about 70 percent of dispensers generally use distributor-provided systems to store DSCSA data. Because we have our partners relying on us to manage it with integrity, DSCSA data is treated as very sensitive. Additionally, any failure to maintain DSCSA data would basically be a violation of the law. Our team has worked hard to navigate through the law and understand the confidentiality clauses.
Maintaining data accurately and in a secure, organized manner from the beginning has been a priority. For those customers who may desire to store their DSCSA data in their own repository or to use another solution provider, we generate DSCSA-enabled ASNs to send the daily transaction data to them.
DV: Why the experimentation with Blockchain?
Mooney: Our Blockchain pilot programs have been in partnership with the Center for Supply Chain Studies and MediLedger, which is a Blockchain solution created by Chronicled. We began exploring Blockchain for a DSCSA use case in late 2016.
The scope of the pilots has been focused on the verification of returns, meaning if a consumer returns a DSCSA product, we need to perform two tests on the product. First, we must locate the original DSCSA Transaction Data for the original purchase by the customer of the product. We can do this with existing internal systems. Then a distributor needs to be able to confirm that the Product Identifier information that is affixed to the product corresponds with the manufacturer’s assigned data, and after passing those requirements the product is triaged to review its suitability for restocking, such as reviewing its condition before going back into the supply chain.
With the DSCSA’s November 2019 deadline, distributors are required to confirm the Product Identifier affixed to a saleable return before accepting the product, and they need to be able to identify where to send a query to a manufacturer for a particular product Global Trade Item Number (GTIN).
This process must be able to be updated for acquisitions, transfers of product lines, or other inevitable business changes. We determined that Blockchain can provide a platform for manufacturers to manage a “lookup” directory used by distributors to make these inquiries on a mass scale. Wholesalers will need to verify 60 million returns annually.
Beyond the 2019 deadline, we see Blockchain being useful to meet the requirements of the 2023 DSCSA deadline, which calls for unit-level traceability to be fully in place. We call this stage “facilitating the gathering,” meaning we are not yet certain how Blockchain will support our business in the future but the pilots will provide important learnings.
They could confirm how Blockchain would help break down obstacles presented with a centralized data sharing structure and enable a “point-to-point” DSCSA transmission model, based on the trusted partners who are permissioned into a DSCSA Blockchain. This phase would also allow someone to “know” that a transaction for a particular serialized GTIN occurred and request the DSCSA transaction data from the trusted parties.
In general, we are very much aligned with how GS1 US envisions Blockchain’s scalability curve — breaking down silos and enabling internal and external systems to share data is going to be critical to make Blockchain work. As we explore Blockchain, having the foundation already built based on GS1 Standards makes us more confident that we are all working off of the same data set in the same repeatable format.
From the start, the exploration of Blockchain for a DSCSA use case has involved manufacturers, wholesalers, dispensers, and solution providers. All are eager to explore the possibility of how Blockchain might be useful in the DSCSA use cases.
DV: What has McKesson so far taken away from the Blockchain pilot?
Mooney: The learning to-date for McKesson has been mixed. The initial assumption was that the Blockchain might be something that could manage the full DSCSA transactional activity between all trading partners.
I think at this time, the thinking is more around using Blockchain to aid in the lookup directory for returns and to be able to perhaps aid in facilitating the gathering of DSCSA data from off-block data repositories, with the Blockchain recording that transactions may have occurred but not carrying the full details of those transactions.
Many Blockchain experts believe that a Blockchain will point to many off-chain data storage resources. Data could be stored in accordance with GS1 standard data structures and transactional data captured using a special standard called Electronic Product Code Information Services (EPCIS).
The pharmaceutical industry in the U.S. is committed to the use of EPCIS for the chain of ownership in the supply chain, both in accordance with DSCSA and to combat the circulation of counterfeit goods in general.
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