Pharmaceutical Traceability
Implementation of the Drug Supply Chain Security Act (DSCSA)
Passage of the Drug Quality and Security Act (H.R. 3204) was a major win for HIDA and for the healthcare supply chain. The law created a uniform national standard for tracing pharmaceuticals through the supply chain. The law ensures the safety of drugs for patients and preempted the burdensome patchwork of state pedigree laws, allowing distributors to conduct business the same way in all 50 states. The resulting ability to uniformly trace medical products and stop counterfeit drugs from entering the U.S. supply chain is essential, for both patient safety and supply chain integrity. Title II of the DQSA, the Drug Supply Chain Security Act (DSCSA), outlines steps to build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed. The DSCSA directs the FDA to establish national licensure standards for wholesale distributors and third-party logistics providers, and requires these entities report licensure information to FDA annually.
What Members Need to Know
The second phase of the DSCSA will go into effect November 27, 2023, and requires the interoperable, electronic tracing of pharmaceutical products at the package level. (Currently, the DSCSA generally requires products to be traceable at the lot level.) The 2023 requirements, which apply to any wholesale distributor that sells pharmaceutical products, are comprised of three specific, but highly interrelated statutory components: interoperable exchange, interoperable verification, and interoperable tracing. In a recent guidance entitled “Enhanced Drug Distribution Security Requirements Under Section 582(g)(1) of the Federal Food, Drug, and Cosmetic Act—Compliance Policies,” the FDA announced a 12-month enforcement discretion and system stabilization period for the final phase of the DSCSA, but the law will still take effect on November 27, 2023. The reason for the stabilization period is because the FDA listened to industry and assessed industry readiness. The agency determined industry would not be ready to meet all requirements by November 27, 2023. As a result, those trading partners would not have been able to legally ship or receive pharmaceuticals beginning on November 27. The FDA announced the stabilization period so that the pharmaceutical industry could avoid supply chain disruptions, drug shortages, and negative impacts on patients.
Although the DSCSA directs the FDA to establish the above-mentioned national licensure standards, FDA has still not released any standards to date. HIDA has allied with other associations and corporations to encourage the FDA to publish these licensure standards to prevent creating confusion in the current market that will generate an additional hurdle for states when they must backtrack after the federal regulations are issued. Additionally, as the agency develops federal regulations, HIDA believes it is important that any standards be consistent with Congress’ intent to establish a national system and that the national standard establish both a floor and a ceiling to wholly preempt state wholesale distributor licensure requirements.