The Drug Supply Chain Security Act: Current Impact

On November 27, 2013, President Barack Obama signed the Drug Quality and Security Act of 2013 (DQSA) into law, bringing a successful conclusion to efforts by the industry and consumer groups to create a national pharmaceutical serialization and track and trace regulation under the FDA’s jurisdiction, one that eliminates the patchwork of state laws in addition to providing new regulations for compounding pharmacies. Title II of the DQSA, the Drug Supply Chain Security Act (DSCSA), is the most complex pharma track and trace law every enacted. Its many layers of complicated rules and regulations provide challenges that companies will indeed need to untangle. The ultimate goal is to enhance the FDA’s ability to help protect patients and other consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or otherwise harmful.

The FDA safeguards are intended to prevent substandard, altered, or counterfeit drugs from entering the distribution chain. The new law does away with fragmentary and inconsistent state laws and establishes national standards for all entities within the drug supply chain, beginning with the manufacturers and ending with the dispensers. (Yes, repackagers and wholesale distributors are included!) Cargo theft will be thwarted and counterfeiting identified. When recalls are necessary, an efficient system will be in place. The safeguards will also provide consumers with access to drugs that are safe and effective. The law requires FDA to develop standards, guidance documents, and pilot programs and to conduct public meetings, in addition to other efforts necessary to support efficient and effective implementation. (Yes, FDA is developing a schedule for implementing the law’s requirements!) Some new requirements for the identification, tracing and tracking of pharmaceutical products took effect beginning January 1, 2015, with 10 years allowed for full implementation and enactment.

Drug manufacturers, wholesale drug distributors, repackagers, and many dispensers (primarily pharmacies) will be called on to work in cooperation with FDA to develop the new system over the next 10 years. Some of the new DSCSA provisions that are to be in place by the end of ten years include, but are not limited to:

  • • Tracing provisions: All entities in the chain must establish a way that the drugs can be tracked for each step in the process, including who handled the specific drug each time it was transferred from one entity to another in the chain and including where and when it was sold. This will enhance the detection and notification of illegitimate products in the drug supply chain
  • • Identification measures: Packages for certain prescription drugs need to have easily readable by unique bar codes. This will enable verification of the legitimacy of the drug product identifier down to the package level.
  • • Methods to detect and respond to suspected drugs: Standards for identifying potentially dangerous or counterfeit drugs that are not approved must be developed and more efficient recalls of drug products must be facilitated. The suspect drug must be quarantined for additional investigation.
  • • Implement verification measures: Establish a process to verify the drug is what it claims to be. Within 24 hours of a request from the dispenser to the manufacturer or repackager, the entity must be able to confirm that the product identifier is accurate.
  • • FDA notification: If a counterfeit, unsafe or unapproved drug is detected, clear procedures for notification of the FDA must be implemented.
  • • Licensing of wholesale distributors: All must report the status of their licenses to the FDA which will be stored in a database and accessible by the public.
  • • Third party logistics providers must be licensed: Third party logistics providers are those that warehouse, store or ship drugs. This will be the first time they have been required to be licensed.

The message is clear! For industry, failure to comply with the requirements of the law can result in penalties. However the implementation of the new law is fluid and dynamic. Therefore, it is critical to become familiar with the law and work with your trading partners to ensure they are familiar with the law. This means our drug manufacturers, repackagers, wholesale distributors, and dispensers (primarily pharmacies). The good news is that the Agency is expecting to release a long list of guidance documents related to the DSCSA and it would be behoove all partners to stay informed and pay attention to this.

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