Tuesday, May 26, 2015

Vendor Managed Inventory Under the DSCSA - RxTrace.com

Dirk Rodgers of RxTrace.com writes another interesting article around Vendor Managed Inventory and the impact of DSCSA on it.

Read the full article here - An excerpt:
"I wrote this essay on Vendor Managed Inventory (VMI) back in 2013 which was aimed at what would likely happen to VMI under the California pedigree law (see “Vendor Managed Inventory Under California ePedigree”).  But even though that law is now obsolete (see “The California Pedigree Law Is Now Officially Inoperative“), surprise, some of the same issues crop up when VMI is performed under the DSCSA.  So I converted the original essay to speak to VMI under the DSCSA.  I think you will agree, it is still pertinent…
One of the complexities of the modern pharmaceutical supply chain occurs when a pharmaceutical dispensing organization “outsources” the management of their on-premises inventory to their supplier, or “vendor”.  This is known as Vendor Managed Inventory, or VMI.  There are several good reasons this might be done, including eliminating the need to deal with issues that have more to do with supply chain execution mechanics and fluctuating supply and demand than they do with the core competency of dispensing drugs.
When VMI is used in the pharma supply chain the supplier is typically a wholesale distributor whose core competency is in dealing with those exact issues.  That’s just what they do.  The wholesaler benefits from the VMI relationship because they become the exclusive supplier to the VMI customer.  VMI can be a “win-win” proposition as long as costs are kept in-check.
But what will happen to VMI relationships now that the Drug Supply Chain Security Act (DSCSA) is in effect?  The DSCSA itself does not have anything to say about these business relationships so we just have to follow the logic of the law to figure it out on our own.  The main thing to look for when applying the DSCSA is any change of ownership of a drug.  Those are the times when a seller must provide Transaction Information (TI), Transaction History (TH) and a Transaction Statement (TS) to the buyer."