Drug Supply Chain Security Act

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Pharma & Healthcare

Drug Supply Chain Security Act

The pharmaceutical supply chain is gearing up for the final deadline of the Drug Supply Chain Security Act (DSCSA). On November 27, 2023, pharmaceutical supply chain entities such as manufacturers, distributors, and pharmacies will be required to provide serialized data in transaction information when a product changes ownership. The main purpose of the Drug Supply Chain Security Act is to protect the US domestic supply chain for prescription drugs and to make sure that bad actors and counterfeit products are kept out. This special report highlights the nuances of the Act along with tracking India’s stance on the same and how are Indian companies and government bodies are slated to bring the transforming dynamics in drug distribution…

Over the past several years, life sciences companies have faced mounting pressure from many directions, including increasing regulatory requirements, non stop technological advances, and intense pricing pressure. And the unprecedented events of the past year only provided more reason to modernize compliance and elevate the value and partnerships within your organizations and with external stakeholders, highlighted a Deloitte study.

This is not all… the counterfeit issue is one of the biggest concerns pharma sector has been facing globally. As shocking as it may sound, the World Health Organization stated that approximately 11% of medications sold in developing countries are counterfeit, resulting in 144,000 additional deaths annually from imitation antibiotics and anti-malarial drugs alone. According to the Drug Enforcement Administration, the US confiscated 9.5 million counterfeit pills from April 2020 to April 2021 – more than the previous two years combined. This is a likely driver of the 100,306 drug overdose deaths in the US over that time.

Lack of traceability in the drug supply chain is a problem for companies as much as it is for consumers and the Food and Drug Administration (FDA). The tracing of pharmaceutical drugs to improve the visibility throughout the pharmaceutical supply chain is not a new concept. Turkey introduced serialization requirements in 2010 and other markets such as China, South Korea have regulations in place. Since last decade, China has required all the supply chain partners involved in the drugs distribution to record information of individual drug units in a traceability system. The importance of drug traceability has been increasingly emphasized and mandated by several countries across the world.

Anubha Dixit, Tongadive

The European Union introduced their Falsified Medicine Directive (EUFMD) in February 2019 to digitally trace each unit of medicine and counter illicit drugs in the European market. Therefore, government and regulatory bodies are making drug traceability an integral part of supply chain to establish authenticity and mitigate the risk of counterfeit product through digital drug verification. The Drug Supply Chain Security Act (DSCSA), as defined by the FDA, “outlines steps to achieve interoperable, electronic tracing of products at the lot, unit, and now package level to identify and trace certain prescription drugs as they are distributed in the United States. This will enhance the FDA’s ability to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful. These requirements will also improve detection and removal of potentially dangerous drugs from the drug supply chain to protect US consumers.”

Giving insights into the Act, Pallikkara Viswanathan, Life Member of IIMM Bangalore, elaborated, “The Drug Supply Chain Security Act is likely to improve the detection of the possibility of the potential spurious or counterfeit drugs at time of manufacturing and distribution. This will also act as the mechanism for the government and pharmaceutical companies to bring about a concerted drive in protecting the consumer’s health conditions in supply chain.”

“The quality of the drugs manufactured & distributed is considered to be important under the Drug Supply Chain Security Act, as it was intended to give more important authority to regulate, manufacture, the drugs, products, on creation of a particular pharmaceuticals’ product, to fit into the unique type of patient’s requirement, in order to use the particular process type of active pharmaceuticals ingredients, also the right type of tools, as this is likely to become necessary to change to the required medication, either it may be in the tablet form, or in the form of syrup, (liquid) which may be necessarily convenient for usage, better digestion, also to avoid the use of necessary non-essential ingredients, in order to avoid the drug or product, causing allergy among patients, as some of the medicines sometimes are likely to cause harm if taken incorrectly, as by this intake, the patient become exhaustive, (fatigue) also lead to ill-health, which necessarily becomes important to obtain the correct doses needed, with the correct prescription liable to be obtained in supply chain,” he highlighted.

The Drug Supply Chain Security Act requires a stature that the products shall not be received at the receiver’s end, from the manufactures, until a complete transactional report with complete accuracy, history of information, in inventory is reconciled at the receivers’ end, before the shipping of the products. The Act had given preference to Post Covid-19 in terms of regular lead time of four to six weeks longer period, ensuring short term resilience, with disruption in raw materials, active pharmaceuticals ingredient, with worldwide shortage on Personal Protecting Equipment in supply chain.

Adding further, Viswanathan stated that the Drug Supply Chain Security Act was to come under implementation from November 27 2023, with the consent of the pharmaceutical manufacturing organisations and the government in order to include the unit level serial number into the transaction, the information of the prescription of drugs, products, also be commendable, to exchange data, electronically among the government and pharmaceutical organisations within the country.

“The Drug Supply Chain Security Act is envisioned to strengthen the security of the drug manufacturing & distribution, explore the current state of pharmaceutical in the supply chain, to add to the controls, such as tracking & traceability of the systems, feedback from customer, with Drug Controller of India working with local drug authorities, government and pharmaceuticals companies with a view to ensure patient safety. If the need arises, samples can be seized for further investigation and necessary action can be taken,” Viswanathan added.

What DSCSA Requirements are coming into effect in 2022-2023?

The pharmaceutical supply chain has had nearly 10 years to prepare for the full implementation of the DSCSA, but many stakeholders are still taking steps to comply with the final phase. The final phase is currently underway with penalties and fines beginning November 27, 2023. At this point, the whole pharmaceutical supply chain will be required to ensure the interoperable, electronic tracing of products at the unit level.

Manufacturers, wholesalers, dispensers and other stakeholders won’t be permitted to continue operating within the supply chain unless they meet the following FDA requirements.

  • Interoperable exchange: Trading partners must exchange transaction information (TI) and statements in a secure, electronic format with the use of a product identifier (PI) at the unit level.
  • Interoperable verification: Partners are required to verify the unit level PI interoperably and electronically and validate shipments.
  • Interoperable tracing: Serialization, or unit-level traceability, is mandatory. Every item must be able to be tracked throughout the supply chain. Every PI must include an expiration date, lot number and standardized numerical identifier.

Together, these three requirements will make it easier to verify the legitimacy of a drug and ensure counterfeit medicines don’t enter the market.


On September 24, 2019, FDA published the Wholesale Distributor Verification Requirement for Saleable Returned Drug Product—Compliance Policy. This guidance addresses the readiness of wholesale distributors to comply with the requirement to verify the product identifier upon receipt of a returned product that the wholesale distributor intends to further distribute under section 582(c)(4)(D) of the FD&C Act. The requirement under section 582(c) (4)(D) of the FD&C Act for wholesale distributors to verify saleable returned products prior to redistribution.

Dr Avi Chaudhuri
The Kulinda Consortium

DSCSA requires trading partners to exchange drug product tracing information when they take ownership of drugs, resulting in a tracing record that FDA and others can use to investigate suspect and illegitimate drugs. Under this act, wholesale distributors must have systems in place that will enable them to verify the product identifier, including the standardized numerical identifier, on each sealed homogeneous case of saleable returned product, or, if such product is not in a sealed homogeneous case, on each package of saleable returned product. A saleable returned product may not be further distributed by wholesaler/ distributor until the product identifier is verified. The product should be managed as suspect product and keep as quarantine stock if the product identifier is not successfully verified.

It’s estimated that approximately 2-4% of prescription drugs in the market are saleable returns. VRS will allow these units to be resold in a timely and secure manner while maintaining DSCSA traceability requirements.


With industry and governments worldwide realising the importance of implementing product serialization, it becomes mandatory for all entities within the supply chain to comply with federal and/or state legislation of the countries in which they operate.

As stated in one of Control Print blogs, “Pharmaceutical companies must deal with challenges originating from supply chain security lapses (resulting in theft, diversion, and product recalls), counterfeiting and stringent regulations. In addition to unsettling safety concerns, these challenges also harm the industry’s health by adversely affecting profits, brand credibility and research initiatives.”

“India has been a major hub for the production and export of generic drugs for several decades. However, this has also made it vulnerable to the production and distribution of counterfeit drugs. Counterfeit drugs not only pose a threat to public health but also undermine the credibility of the Indian pharmaceutical industry,” elaborated Anubha Dixit, Founder & CEO, Tongadive. To combat this issue, “The Indian Government has put in place several regulations and measures. It has established the National Medical Products Anti-Counterfeiting Taskforce, which is responsible for coordinating efforts between various stakeholders to combat the production and distribution of counterfeit drugs. In addition to this, the government has mandated the use of barcodes on drug packages to enable track and trace of drugs throughout the supply chain. This is aimed at reducing the scope for counterfeit drugs to enter the supply chain and making it easier to detect and remove them,” she added.

Despite these measures, the problem of counterfeit drugs continues to persist in India. According to a report by the World Health Organization (WHO), approximately one in ten medical products in low and middle income countries, including India, are substandard or falsified. This highlights the need for continued efforts and investment to strengthen the regulatory framework and ensure the safety of drugs in India.

On this front, Anubha Dixit, “The Drug Security Act, set to come into effect by the end of this year, is a significant development in India's pharmaceutical industry. The government is establishing a unified digital portal to bring together all stakeholders, including regulators, manufacturers, distributors, state-run departments, and procurement agencies. This integration aims to address India's fragmented regulatory system, which poses a challenge for procurers and quality assurance.”

The portal will integrate existing IT systems, including the Sugam portal of the Central Drugs Standard Control Organisation (CDSCO), all Central Drug Laboratories, state drug controllers, and manufacturers. However, the manufacturers' changes to the source of active pharmaceutical ingredients (APIs) or even excipients are not necessarily reported to state regulators, which may pose a challenge to drug quality and patient safety. Many Indian pharmaceutical companies have already implemented serialization and track and trace systems to comply with the regulation, but small and mediumsized companies may face difficulties in investing in the necessary technology and infrastructure. The implementation of the CDSCO is likely to increase the cost of production for pharmaceutical companies, resulting in higher drug prices in India, according to Dixit.

Viswanathan highlighted that the Drug Supply Chain Security Act, among the Indian origin pharmaceutical organisations, will create an end-toend verification system to validate the legitimacy of the medicines & drugs to the ultimate level on the way down to the package level system, in order to funnel out illegal or counterfeit drugs and bring about greater transparency in supply chain. Many companies including drug manufacturers, packaging material suppliers, companies on contractual sourcing or the distribution companies are likely to come under constant pressure in order to comply with the regulation set by the government and pharmaceuticals organisations. These requirements may be conditionally strict to maintain high standards to in enhancing quality of products and ultimately safety of patients.

In tune with these fast shaping up developments, on June 16, 2022, the Health Ministry issued a draft Rule introducing amendments to the Drugs Rules, 1945 making QR codes mandatory on the packaging of 300 life-saving drugs from May 1, 2023 to prevent the sale of counterfeit drugs. The draft Rule mandated manufacturers to print or affix barcode or QR code on its primary packaging label or, in the case of inadequate space in primary package label, on the secondary package label that stores data or information legible with software application to facilitate authentication. The store data or information shall include the particulars including unique product identification code, proper and generic name of the drug, brand name, name and address of the manufacturers, batch number, date of manufacturing and date of expiry along with the manufacturing license number.

Earlier the industry body in its representation to the ministry on the implementation of barcode or QR code on the label of top 300 brands of drugs pointed out shortcomings of the QR code and challenges faced by the drug manufacturers while implementing it. “Technically QR code is a machinereadable label, used to store data. It is not a tool for anti-counterfeiting applications. Anybody can generate and print a QR code. Additionally, if QR/ barcodes are printed on the secondary packaging like saleable cartons, and the cartons are not destroyed at the trade/ retail level, it can lead to counterfeiting without the knowledge of the manufacturer/marketer. Excluding the unique product identification code, all other information is already available on the label of the medicinal products as per the requirements of Rule 96. Typically, the unique product identification code is GTIN (Global Trade Item Number) taken from GS1. Hence this QR code cannot be claimed as a mechanism to facilitate authentication. For the top 300 brands, the manufacturers use combi-packs, that is multiple strip/blisters in one carton. It will be difficult to have codes printed on such packs and this will further hamper the aggregation process. In case each blister has to be put in a mono carton, to accommodate the QR codes, then there is a loss of productivity in manufacturing and excessive cost of the mono carton as well as the QR code infrastructure are incurred. The draft rule does specify that in case of inadequate space in the primary package label, the secondary package label can facilitate authentication,” stated Indian Drug Manufacturers’ Association (IDMA).

Pointing out the limitation for implementation in aluminium trips/ blisters which is primary packaging of drugs, it said, “The readability of the QR code is difficult and grading is not possible due to reflection and a knurled surface of aluminium strips/blister strips.” The industry body further said “The top 300 brands list is dynamic and existing brands may slip out of the list or new products may be added every month. Hence there should be a periodic annual revision, effective April 1.”

It emphasised the need for creation of a Central Portal where manufacturers can upload the printed codes batch wise so that if there are issues with counterfeits the manufacturers can be absolved of the necessity to confirm that the counterfeit drug is not manufactured by them. Besides this, it also suggested that once these authentication measures are implemented, further label changes should be frozen for the next 5 years as continuous changes in the label requirements can cause confusion among companies, doctors, trade, as well as patients.

On the technology adoption front, the Indian pharma industry has been investing in digitalization and automation to improve the efficiency and transparency of the supply chain. Technologies such as blockchain, artificial intelligence, and the Internet of Things are being explored to improve the security and traceability of the pharmaceutical supply chain. In addition to technological investments, the industry is also focusing on collaboration to improve the efficiency of the supply chain. The Indian government has launched several initiatives, such as the Production Linked Incentive (PLI) scheme, to encourage collaboration and investment in the pharmaceutical industry, Dixit highlighted.


A recent study revealed that the global healthcare supply chain management market was worth US$2.2 billion in the year 2021. The market is projected to grow at a CAGR of 13.2%, earning revenues of around US$5.3 billion by the end of 2028. Global Healthcare Supply Chain Management Market is growing at a high CAGR because of the emergence of cloud-based and mobile-based solutions along with the adoption of GS1 system of standard in the healthcare industry globally. The increased need to improve the operational efficiency, reduce the operating costs, improve the profitability and quality are also driving the global healthcare supply chain management market. 

As the global concern about drug diversions, theft, and counterfeiting increases, governments and regulators are pushing for new laws and regulations to prevent these problems. Pharma businesses should invest in a track and trace system to mitigate supply chain risks, satisfy regulatory requirements, and enhance their bottom line.

Gavi, the vaccine alliance, highlighted that getting healthcare products to everyone isn't always easy. Barriers range from stock running out or expiring, and challenges with identifying who needs vaccines or medicines, to drug counterfeiting, which can cost an estimated US$30.5 billion each year. This poses a significant problem for the health of people and economies. A new digital system to verify and trace vaccines and medicines aims to tackle these concerns.

The premise is simple: to make sure vaccines reliably get where they're needed, you need to know where they are now, and where they've come from. This visibility is critical for a health system's ability to plan – helping to avoid stockouts and waste. To tackle these issues, Gavi provided seed funding of US $5 million in 2020 to kick start development and initial testing of a tool to verify the authenticity for vaccines, tests and medicines and other health products – the Traceability and Verification System (TRVST).

It's as simple as scanning a barcode using a computer or smartphone app. When a manufacturer is ready to ship a batch of health products, they'll attach a digital barcode, known as a GS1 barcode, to the product and upload the barcode and important information – like destination, product type and expiry date – to a global database, accessible to countries using the programme. The information contained within the unique serial number on the barcode makes it easier to identify the product as genuine and track its location through GPS and unique geo location numbers. The government in that country, or a health professional on the ground, can then scan a box of the health products, such as COVID-19 vaccines, and get verification from the system that they are genuine and trace them through the supply chain.

Talking about technological interventions, Viswanathan stated that under the Drug Supply Chain Security Act, manufacturers of pharmaceutical products, government, suppliers within the state or the country adhering to the contract are required to serialise the individual packages, with Quick Response codes, Radio Frequency Identification, maximum price details, connected to cloud computing, to provide with the electronic proof of origin, as per government regulations, in order to maintain high standard patent, safety, quality, innovation, regulations, which are intended to reduce counterfeiting & spurious drugs and ensure quality of every product that travels through the value added chain in supply chain.

Dixit reaffirmed that the industry in India is adopting new technologies to mitigate the counterfeit issue. One such technology is blockchain, which has the potential to provide a secure and transparent supply chain. Blockchain can help prevent counterfeit drugs from entering the supply chain by providing end-to-end traceability and transparency. It can also help to ensure that drugs are being transported and stored under proper conditions.

In addition to blockchain, other technologies such as artificial intelligence (AI) and the Internet of Things (IoT) are also being explored by the industry in India to improve the security and traceability of the pharmaceutical supply chain. AI can be used to analyze data from various sources to detect patterns that indicate counterfeit products, while IoT can be used to monitor the temperature and humidity levels of drugs during transportation and storage.

The adoption of these technologies is still in its early stages in India. However, according to a report by Accenture, the adoption of blockchain technology in the Indian pharmaceutical industry is expected to grow significantly in the coming years. The report estimates that the market for blockchain-based solutions in the Indian pharmaceutical industry will reach $200 million by 2025. Overall, the industry in India is recognizing the importance of adopting new technologies to mitigate the counterfeit issue and is investing in solutions that can improve the security and traceability of the pharmaceutical supply chain.

Dr Avi Chaudhuri, Founder, The Kulinda Consortium, highlighted, “The emerging barcode programme for domestic medicines represents a turning point for India in its battle against counterfeit variants. After several years of planning, the Ministry of Health, and Family Welfare (MoHFW) has now issued a set of draft guidelines on how the pharmaceutical industry should proceed. The benefit to both government and the citizenry is immense if a national anti-counterfeiting programme is well constructed and then successfully deployed. Often overlooked in the creation of such regulatory mandates is the interest of the third pivotal stakeholder — the pharmaceutical industry. The assumption is that it will simply be a compliant participant because the laws shall compel them to do so. I reject that coercive approach to governance and instead believe that industry’s enthusiastic acceptance is essential to both engagement and sustenance.”

The static content of the proposed barcode on a given medicine can be easily replicated by anyone with intent, thereby creating the ultimate nightmare scenario — providing false reassurance to helpless consumers that the fake medicine they happened to purchase was actually genuine. To reduce that possibility, each package barcode should contain a unique serial number.

Although it could be surmised that the agency intended to launch a serialization program, the draft regulation does not contain explicit language in this regard and therefore industry is left with a regulatory mandate that lacks clarity. A strong case was additionally made that India join other nations in ensuring that barcode content and format conform to recognized international standards to allow proper decipherability at the later reading stage by an empowered stakeholder.

According to Dr Chaudhuri, “The best-laid plans can get derailed in the absence of cost containment. India is a rising economic power, but it is also a fact that a large segment of the populace faces daily struggles in meeting life’s costs. Adding a further financial burden to that reality can be indefensible. And yet, the duty of protecting society against fake medicines makes for an equally compelling counter-argument, as now recognised by the Central Government.”


Charting out the roadmap to success, Dr Chaudhuri offered insights into every single node of the value chain and ways to deal with the growing menace of counterfeits… A well-designed mass serialization programme can offer substantial protection. However, placing a unique number on a drug package is not a trivial task, compounded by the further challenge of ensuring seamless authentication outcomes. To ensure success, both drug companies and the MoHFW must be uncompromising in pledging that every saleable drug package covered under the mandate contains a readable barcoded, without exception or error.


Placing a serialized barcode on each drug package can be undertaken in two ways — direct online coding or application of a coded label. Online coding is not new to the Indian pharmaceutical industry, where the practice has been undertaken for a few years now for exported products. The cost factors here include procurement of high-resolution printers and vision systems to validate the print matter, both operationally integrated with online rejection systems. Although ongoing operating cost is favourable with online coding, the economics of implementation and production impact also need to be considered. Brand owners must additionally ensure that vendor excellence is given the highest priority. Unlike India’s export serialization program, the MoHFW mandate is intended for the home market. Any deficiencies in print quality, data integration, or consumer authentication will reduce programme confidence and sully that brand owner’s public reputation. Companies taking the online coding approach should therefore only recruit well-established solution providers with known technology prowess, a track record of implementation excellence, and commitment to ongoing support.

The second approach to serialization is to apply a barcoded label on the package. The deployment method here can involve online label printing and application. There are several excellent vendors that provide such print-and-apply machinery. A significant advantage to this approach is that the drug package is endowed with a visually salient and identifiable token for authentication. Whereas a barcode printed directly on the package is likely to become lost in the midst of all the other print matter, a security label would stand out visually and also provide the further advantage of identifying any attempts at removal due to the standard practice of procuring tamper-evident labels.

Label application would have a similar initial cost compared to online coding, though ongoing cost would certainly be higher. There is however one type of drug package for which label application represents the only viable approach. And as it turns out, a small amendment by the MoHFW to barcode content would even make it highly economical.


Currently, the legal requirement for placing batch number and expiry date on blisters is met by an overprinting process with low-cost dot-matrix printers. The MoHFW requirement can be met by applying a small security label that would contain a barcode with just two data items (GTIN and serial number) and possible agency branding, as shown in the left panel of Figure 1.  It is not necessary for the barcode to contain additional content that will in any case be directly printed online by way of the dot matrix printers, informed Dr Chaudhuri

He further elucidated that label application on blister packs would offer several key advantages. The first is that brand owners can procure pre-printed rolls of barcoded labels in advance from a reputable supplier. This is because the data contents in the barcode are not dependent on production because both GTINs and serial numbers are predetermined.

Second, any requirements to associate batch details or other data proposed by the MoHFW, as spelled out in the draft regulations, can be undertaken during production by electronic means in the backend without having to deploy an expensive online printing setup. The associated data would then be instantly accessible during authentication. Brand owners would need to recruit a worthy solution provider to work in conjunction with the label supplier and ensure that printed barcodes are correctly associated with MoHFW-mandated data on the packaging line, and then certify proper commissioning for later authentication in the market.

The third advantage is the substantial savings in capital expenditure because there is no need to procure expensive print-and-apply systems. All that is needed is an applicator on each packaging line because only pre-printed labels have to be affixed. The only other machinery requirement is a standard barcode reader to commission (activate) the coded packages going to market.

Medicines that are especially sensitive or vulnerable to counterfeiting should require an additional protective nonclonable feature, such as a fingerprinted token. The purpose of this additive is to guarantee that any copied labels will be instantly flagged as being suspect so that not even a single authentication event would yield a false outcome. A label supplier with access to such technology can embed and deliver this additional security layer on the pre-printed labels when needed, as shown in the right panel of Figure 1. Taken together, a pre-printed label application scheme would provide all of the solution requirements for India, with the additional advantage of offering the most cost-effective approach to blister coding.


“It is important to re-emphasize the critical importance for attaining the widest possible consumer acceptance, and with it, a strong and wilful reception by the public to undertake product authentication. Consumer acceptance will unfold automatically if the government can make the case that it has created an excellent and reliable platform for protection, with rapid verification outcomes that provide on-the-spot assurance at the time of purchase. Many of the design elements outlined in these articles have focused on creating a programme with exactly that purpose,” asserted Dr Chaudhuri.

According to him, the key challenge for both government and industry is to maximize drug authentications once the programme has been launched. It is therefore critically important to undertake extensive efforts at public awareness and motivate the highest level of authentication. A concerted effort at public education will undoubtedly have substantial success. Consumer authentications have a multiplicative impact due to the vast number of inspections across the marketplace. And that in turn would serve not only todetect counterfeit drugs but also detertheir appearance.”

Dixit concluded that the drug supply chain traceability angle is becomingincreasingly important as regulatorsand stakeholders demand greatertransparency and accountability inthe pharmaceutical supply chain. Theimplementation of regulations such as theDrug Supply Chain Security Act (DSCSA) in the United States and the Falsified Medicines Directive (FMD) in Europe is driving the adoption of serialization and track and trace systems globally.

“In India, the government has also introduced several initiatives to improve the traceability of the pharmaceutical supply chain. The Indian Government has mandated that all pharmaceutical products must carry a unique identification number (UIN) or a barcode, which will allow the products to be tracked and traced throughout the supply chain. The implementation of serialization and track & trace systems is also being driven by technological advancements, such as blockchain, which can provide an immutable record of the drug supply chain. Blockchain technology can help to improve the security and transparency of the supply chain by providing a decentralized and secure platform for tracking and tracing products,” she highlighted.

Looking ahead, the drug supply chain traceability angle is expected to become increasingly important, with regulators and stakeholders demanding greater transparency and accountability in the pharmaceutical supply chain. The adoption of serialization and track & trace systems is likely to become more widespread globally, with emerging markets such as India playing a critical role in the implementation of these systems.

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