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Drug Supply Chain Security Act – What’s Next? A whole lot.

The passage of the Drug Supply Chain Security Act (DSCSA) in November 2013 led to a very busy 2014 as FDA and manufacturers, wholesale distributors, and dispensers began the statute’s complex 10-year implementation.  2015 promises to be equally busy.

A Surge Of Activity At Year-End In 2014

2014 closed in a flurry of DSCSA action.  As we reported here, FDA posted a Draft Guidance on Standards for the Interoperable Exchange of Information for Tracing of Certain Human, Finished, Prescription Drugs: How to Exchange Product Tracing Information (the Standards Draft Guidance) on November 26.  Then, just days later, FDA opened a web portal and issued guidance so that wholesale distributors and third-party logistics providers (3PLs) could begin submitting licensure information (as we discussed here).  Finally, FDA issued a Draft Guidance setting out its interpretation of the extent to which the agency believes the DSCSA displaces and preempts state law.  We took issue with the legal analysis in that preemption Draft Guidance, which you can read about here.

On January 1, 2015, one of the DSCSA’s big milestones arrived.  Among other things, the statute required that, on that date, manufacturers begin sending, and wholesale distributors begin receiving and transmitting, transaction information, histories, and statements for human prescription drug products.  At the end of December, FDA issued a Guidance stating that the agency intended to temporarily exercise enforcement discretion with regard to these product tracing information requirements.  FDA stated that it did not intend to take action against manufacturers, wholesale distributors, and repackagers who do not, prior to May 1, 2015, provide or capture the transaction information, transaction history, and transaction statement required by the DSCSA.

So, What’s Next? 

First is that the agency’s enforcement discretion expires on May 1 and, thereafter, manufacturers, wholesale distributors, and repackagers must be transmitting and receiving the transaction data the DSCSA requires.  Closely thereafter, beginning July 1, dispensers must begin receiving this transaction data – though, given the enforcement discretion FDA provided to manufacturers, wholesale distributors, and repackagers, the agency may be asked to extend enforcement discretion for a period of time to dispensers.

The HHS semi-annual regulatory agenda, the CDER Guidance Agenda, and the DSCSA itself provide clues as to what else is coming in 2015.

By November 27, FDA must issue final regulations setting out national standards for the licensure of wholesale distributors and 3PLs.  According to this entry in HHS’s semi-annual regulatory agenda, FDA hopes to have a proposed rule issued in April.  Meeting these deadlines, however, will be challenging, both for the agency and stakeholders.  This will be a significant rulemaking and the DSCSA’s provisions for establishing national standards for licensure of wholesale distributors and 3PLs are new, a bit vague, and, in some places, appear internally inconsistent.

FDA must issue two guidances within 2 years of enactment on the DSCSA (i.e., by November 27, 2015).  First, the agency must establish by guidance a process for the review and granting of exceptions, waivers, and exemptions from the DSCSA.  Second, the statute also mandates issuance of a guidance on grandfathering – that is, continued distribution – of product that is not affixed with a product identifier by November 27, 2017.

The statute specifically requires that the grandfathering guidance be “finalize[d].”  As this language is not present in the section of the DSCSA mandating guidance on waivers, exemptions, and exceptions, it is reasonable to conclude that the grandfathering guidance will need to be finalized by November 27 and the guidance on waivers, exemptions, and exceptions need only be in draft by that date.  However, the waivers, exemptions, and exception guidance must have an effective date that is not later than 180 days prior to the date on which manufacturers must begin affixing product identifiers to products; as such, that guidance will need to be finalized on or about May 26, 2017.

In addition to what must be issued in 2015, the CDER Guidance Agenda published in January sets out an ambitious list of other DSCSA guidances the agency intends to promulgate.  Notably, FDA appears poised to finalize the current Draft Guidance on Annual Reporting by Prescription Drug Wholesale Distributors and Third-Party Logistics Providers.

In the Standards Draft Guidance released in November, the agency stated it intended to issue additional guidance to facilitate the interoperable exchange of product tracing information through standardization of data and documentation practices.  This planned guidance on standardizing data and documentation appears on the 2015 Guidance Agenda.  Numerous questions and requests for clarification have been posed to the agency, and it is possible that FDA will use this guidance to answer some of those queries.

The agency also intends to issue two other guidances:

  • DSCSA Implementation: The Product Identifier for Human, Finished, Prescription Drugs
  • DSCSA: Verification Systems for Prescription Drugs

As manufacturers must begin affixing product identifiers by November 27, 2017, guidance on these subjects, soon, would plainly aid that activity.  What the verification guidance might be is curious – the term is used in several ways in the DSCSA.  Given that it is also addressing product identifier requirements in guidance, this may mean the agency intends to provide guidance on how to determine whether the product identifier affixed to, or imprinted upon, a drug package or homogeneous case corresponds to the standardized numerical identifier or lot number and expiration date assigned to the product by the manufacturer or the repackager.

2014 was a busy year for DSCSA implementation; 2015 promises to be even busier.