Consequences of DSCSA Non-Compliance for Pharmacies & Distributors

Every medicine has a journey—through manufacturers, distributors, and into the hands of dispensers who patients rely on. The Drug Supply Chain Security Act (DSCSA) ensures that journey can be traced, verified, and trusted at every step.

But without compliance, that journey breaks.

Shipments can be legally rejected, inventory can become unsellable, and the ability to operate smoothly can come to a sudden halt. Instead of focusing on patient care and timely fulfillment, healthcare organizations are left dealing with missing verification, disconnected traceability, and a regulatory blind spot that puts both business and patients at risk.

At its core, non-DSCSA compliance exposes pharmacies, dispensers, and distributors to:

1. Regulatory & Legal Penalties

• FDA inspections, citations, warning letters, or enforcement actions from the U.S. Food and Drug Administration.

• Non-compliance can trigger supply chain investigations, license impact, or mandated recalls.

• Increased risk of lawsuits from trading partners and stakeholders for failure to maintain traceability or product security.

2. Financial Losses

• Inability to sell or distribute products without valid traceability records (T3: Transaction Information, History, Statement).

• Costly product quarantines, emergency audits, operational shutdowns, or wasted inventory.

• Losses from destroyed or recalled goods not properly verified or documented.

3. Inability to Verify or Receive Product

• Pharmacies and dispensers may be denied shipments by compliant distributors if documentation is missing.

• Distributors risk stock rejection at receiving docks for incomplete T3 or invalid lot verification.

• Lack of interoperable traceability disrupts core product movement and procurement.

4. Exposure to Counterfeit, Stolen or Unsafe Drugs

• Increased probability of handling illegitimate or diverted drug products due to absence of required product tracing.

• Patients face safety threats, and organizations carry liability for dispensing compromised medication.

• Brand and business reputation damage if fraudulent products enter the supply chain undetected.

5. Loss of Business & Trust

• Trading partners may terminate contracts if your organization cannot participate in secure, traceable data exchange.

• Independent pharmacies, hospitals, and distributors risk exclusion from the legal U.S. drug supply network.

• Loss of patient confidence and market competitiveness.

6. Operational Inefficiencies

• Manual record-keeping increases human error, missing compliance data, and slow audit response time.

• Time-consuming reconciliation, investigation, and reporting processes disrupt staff productivity.

• No real-time alerts or centralized system for product traceability, verification, or compliance reporting.