The Drug Supply Chain Security Act (DSCSA) was signed back in 2013 and aims to give the Federal Drug Administration (FDA) more power to regulate drugs and protect patients from counterfeit, contaminated, or otherwise dangerous drugs.
The World Health Organization (WHO) says that between 1% and 10% of all medical drugs sold throughout the world are counterfeit, and some countries have a counterfeit rate as high as 50%. To combat this problem and protect patients of these drugs, manufacturers, distributors, repackagers, and dispensers will be required to comply with the provisions of the act, which include providing transaction information on sales of certain prescription drugs
Which companies will be impacted by the DSCSA?
How do you know if your company will be affected?
It would be tempting to say that any company that handles pharmaceutical-grade drugs must abide by DSCSA regulations, but in practice, it’s more difficult to get an exact answer. There are exemptions to the requirements for certain products and transactions, however, and state laws regarding the handling of certain drugs may conflict with how the DSCSA classifies them.
As a general rule of thumb, if a company is a defined by the act as a trading partner, and it deals in prescription drugs not exempted from DSCSA regulations, it’s probably under the jurisdiction of the DSCSA.
Defining Prescription Drugs and Exemptions
It’s important to understand what classifies as a prescription drug under the DSCSA. Section 503(b)(1) of the Food, Drug, and Cosmetics Act defines a “prescription drug” as a drug intended for human use and the DSCSA says the drug must be in “finished dosage form for administration to a patient without substantial further manufacturing (such as capsules, tablets, and lyophilized products before reconstitution).”
In general, over-the-counter drugs, medical devices, and drugs for animals are exempt from the act. Drugs which require a pharmacist to dispense it typically fall under the act, but not always. While a drug may require a pharmacist to dispense it, that doesn’t mean the FDA classifies it as a prescription drug, since state laws might require certain drugs to be handled by a pharmacist though the FDA doesn’t classify it as a prescription drug.
Other products exempted from DSCSA regulations include:
- Blood for transfusions
- Radioactive drugs or radioactive biological products
- Medical gases
- Compounded drugs
- Imaging drugs
- Intravenous products intended to replenish fluids or electrolytes
- Drugs intended for irrigation or sterile water
Defining Trading Partners
Let’s go back to trading partners. How are trading partners defined under the DSCSA?
A trading partner is any company, organization, or entity such as a dispenser, manufacturer, repackager, logistics provider, or wholesaler distributor.
A dispenser is defined as any hospital, retailer, pharmacy, or group of pharmacies under common ownership and control (which don’t act as a wholesaler distributor), or any other person who is authorized to administer or dispense prescription drugs. The associated warehouses or distribution centers of authorized people or groups (which don’t act as a wholesale distributor) are also impacted by the regulations.
Manufacturers are classified as a person who has an approved application under Section 505 or a license issued to them under Section 351 of the Public Health Service Act.
A repackager is a company that relabels and repackages drugs for distribution or sale, including repackaging departments, which are actually a part of most hospitals.
Wholesale distributors are groups who are involved in the wholesale distribution of a prescription drug to any person or group other than the patient. This doesn’t include manufacturers, third-party logistics providers, or repackagers.
A third-party logistics provider refers to an entity that provides logistical support for a drug for other organizations, but does not own the product. The other mentioned categories take direct ownership of the drug.
Transaction Exemptions
So a company must adhere to DSCSA regulations if they’re classified as a trading partner and dealing with prescription drugs, right? Is that all there is to it? Unfortunately no, it’s a bit more complicated than that. As it turns out even if a particular drug is not exempt, a company may still be exempt from many DSCSA provisions when it’s conducting certain kinds of transactions. To put that another way, a product would need to follow the DSCSA under other transactions, but in these specific transactions, they do not.
The list of exempt transactions include:
- Intra-company distribution of products within a single manufacturer, or between members of an affiliate.
- Distribution of samples of a product by a licensed wholesale distributor or manufacturer
- Distribution of “medical convenience kits”, collections of finished medical devices which might include drug products or biological products and are packaged in kits for the convenience of the user, if:
- The kit is assembled in an establishment registered by the FDA as a device manufacturer, the kit doesn’t contain a controlled substance, and the manufacturer of the kit purchased the product contained in the kit directly from the manufacturer or from a wholesale distributor that purchased it directly from the manufacturer.
- The label on the primary container of the drug or biologic product in the kit is not altered and the product in the kit is one of the following:
- A vasopressor, a sympathomimetic, an anesthetic, an anticoagulant, an intravenous solution intended for the replenishment of fluids and electrolytes, a product intended to maintain the equilibrium of water and minerals in the body, or a product intended for irrigation or reconstitution.
The upcoming DSCSA deadline is November 27, 2017, and it will require manufacturers to label each product with a unique product identifier. While it was rumored that DSCSA enforcement has been delayed, in reality, the law has not been delayed. The FDA will merely be exercising discretion and giving companies a little more leeway when it comes to penalties for non-compliance.
The list of DSCSA provisions and exemptions requires close reading because in the end, you are the only person who can decide if your company and product falls under the act. Only with a careful reading of the provisions and an intimate knowledge of your product can you arrive at that crucial decision.
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