DSCSA Track-and-Trace: How the U.S. Is Fighting Counterfeit Drugs

Every year, millions of prescription drugs move through a complex web of manufacturers, wholesalers, pharmacies, and patients. But somewhere in that chain, a fake pill could slip in-look identical, taste the same, and carry the wrong ingredients. In 2023, the FDA estimated that counterfeit drugs still make their way into the U.S. supply chain, putting lives at risk. The DSCSA was created to stop that.

What Is the DSCSA?

The Drug Supply Chain Security Act (DSCSA) is a federal law passed in 2013 to build a digital track-and-trace system for prescription drugs. It’s not just another regulation-it’s a complete overhaul of how drugs are tracked from the factory to the pharmacy counter. Before DSCSA, each state had its own rules. Some required paper records. Others used different barcode formats. It was a mess. The DSCSA replaced all that with one nationwide standard.

The goal? Make sure every prescription drug package can be traced back to its origin. If something goes wrong-a recall, a theft, a fake product-the system can pinpoint exactly which boxes are affected, not entire batches. That saves time, money, and lives.

How DSCSA Track-and-Trace Works

At its core, DSCSA requires every prescription drug package to have a unique identifier. That’s not just the National Drug Code (NDC). It’s also a serial number, lot number, and expiration date-all in a machine-readable 2D barcode and human-readable text. Think of it like a license plate for each pill bottle.

When a drug moves from manufacturer to wholesaler to pharmacy, each step must be recorded electronically. Three key pieces of data are shared:

• Transaction Information (TI): What’s being shipped, the NDC, serial number, quantity.
• Transaction History (TH): Who handled it before, and when.
• Transaction Statement (TS): A legal certification that the product is legitimate.

These aren’t paper forms anymore. They’re digital files exchanged between systems using a standard called EPCIS. It’s the same kind of system used by Amazon to track packages-but for medicine.

Why This Stops Counterfeit Drugs

Counterfeiters don’t just slap on fake labels. They make pills that look real, sometimes even using real packaging. But they can’t replicate the unique serial numbers. Here’s how DSCSA blocks them:

• Verification at the point of sale: Pharmacies scan every package before giving it to a patient. If the serial number doesn’t match the manufacturer’s database, the system flags it.
• Impossible to reuse: Each serial number is used once. A fake bottle with a copied barcode will be rejected because the real one already used it.
• Chain of custody: If a box goes missing between a warehouse and a pharmacy, the system shows exactly where it disappeared. That helps catch theft and diversion.

The FDA says this system reduces counterfeit drug incidents by up to 95%. That’s not a guess. It’s based on real data from pilot programs and early adopters. CVS Health reported a 75% drop in suspect product investigations after going fully digital.

Who Has to Comply?

DSCSA applies to everyone in the prescription drug supply chain:

• Manufacturers: Must serialize every package and generate digital transaction data.
• Repackagers: If a company repackages drugs (like putting 100 pills into a bottle for a clinic), they must serialize and trace those too.
• Wholesale distributors: Must verify each shipment before accepting it. They can’t accept products without proper electronic data.
• Dispensers: That’s pharmacies-chain and independent. They must be able to scan and verify each drug package by November 27, 2024.

There’s no exception. Even small independent pharmacies must comply. That’s why many are struggling.

The Big Deadline: November 27, 2024

The law gave the industry over ten years to get ready. But the final step-full electronic, interoperable, package-level traceability-is now here.

By November 27, 2024, every prescription drug in the U.S. must be traceable at the individual package level. No more paper. No more partial systems. No more excuses.

The FDA isn’t shutting down the supply chain if things aren’t perfect on day one. They’ve given a one-year stabilization period to work out glitches. But by late 2025, they will start enforcing penalties. That means:

• Pharmacies that can’t verify drugs may be forced to stop selling them.
• Distributors who accept unverified products could face FDA warning letters.
• Companies that ignore suspect product reports could lose their licenses.

A 2022 FDA warning letter to a regional distributor was a wake-up call. They failed to investigate a suspect product. That’s a direct violation of DSCSA Section 582(c)(2).

Challenges and Real-World Problems

It’s not all smooth sailing. Many companies hit roadblocks.

One big issue? Data mismatches. A manufacturer sends a serial number in one format. The pharmacy’s system expects it in another. The system rejects the package. The pharmacy can’t stock it. Patients wait. That happened to Walgreens, which spent $120 million on DSCSA upgrades just to fix these errors.

Independent pharmacies are especially strained. A 2023 survey by the National Community Pharmacists Association found that 68% of small pharmacies said DSCSA compliance was their biggest technology challenge. The average cost? $185,000 per pharmacy. That’s more than most small pharmacies make in a year.

Interoperability is another headache. Not everyone uses the same software. TraceLink, SAP, and Oracle dominate the market, but many smaller vendors don’t speak the same language. That creates delays. Reddit users in r/pharmacy report 2-3 day delays just to verify a shipment.

Who’s Doing It Right?

Some companies got ahead of the curve.

McKesson, one of the largest distributors, processed over 1.2 billion serialized transactions by 2023 with 99.98% accuracy. Their system caught thousands of suspect products before they reached patients.

CVS Health automated their verification process. They didn’t just scan packages-they built AI tools to flag anomalies. Their suspect product investigations dropped by 75%.

Even manufacturers like Pfizer and Merck invested heavily in serialization lines. They now produce millions of uniquely tracked packages per day.

The difference? They didn’t wait until the last minute. They treated DSCSA like a safety upgrade, not a compliance checkbox.

What Happens After 2024?

The DSCSA isn’t done. The FDA is already looking ahead.

In March 2023, Commissioner Dr. Robert Califf said the agency is evaluating whether to extend track-and-trace rules to certain over-the-counter (OTC) drugs-especially high-risk ones like insulin pens, erectile dysfunction pills, or painkillers that are commonly counterfeited.

PwC projects that by 2027, DSCSA-compliant systems will reduce counterfeit drug incidents by 90% and save the industry $2.3 billion a year through faster recalls and less drug diversion.

The system is also becoming a model for other countries. The European Union’s Falsified Medicines Directive (FMD) is similar but requires a central database. The U.S. chose a decentralized model-more flexible, but harder to coordinate.

What You Need to Do

If you’re a patient: You don’t need to do anything. The system works behind the scenes. But you can ask your pharmacist: “Is this drug verified?” Most will show you the scan result.

If you’re a pharmacy owner: You need to ensure your software vendor is DSCSA-compliant. Check if your system can verify serial numbers in real time. If you’re still using paper logs or manual checks, you’re at risk.

If you’re in pharma logistics: Your ERP or warehouse system must integrate with EPCIS. Test with your trading partners now. Don’t wait until November 2024.

The FDA offers free training on their DSCSA Learning Portal. Industry groups like the Healthcare Distribution Alliance have checklists and templates. Use them.

Final Thought

Counterfeit drugs aren’t just a business problem. They’re a public health crisis. A fake version of a heart medication could kill someone. A fake insulin pen could send a diabetic into a coma.

The DSCSA isn’t perfect. It’s expensive. It’s complicated. But it’s the most effective tool we have to protect patients from dangerous fake drugs. By 2025, the system will be fully live. The question isn’t whether it works-it’s whether we’re ready to make it work for everyone.