The DSCSA establishes a new system for traceability of prescription drug products through phased-in requirements for manufacturers, repackagers, wholesale distributors, and dispensers. The DSCSA will enhance supply chain security through a series of new obligations phased in over the ten-year period from 2013 to 2023. Four key requirements take effect in 2015 as part of that phased approach:
- All supply chain participants must work only with authorized (i.e., duly registered or licensed) trading partners.
- Companies must pass, capture, and maintain certain information with respect to each product transaction.
- Companies must implement processes and procedures to respond to requests for information from federal and state officials.
- Companies must have systems and processes to investigate, verify, and respond to suspect and illegitimate products.
The statutory definitions in the DSCSA are foundational to all of the obligations under it, including the obligations taking effect in 2015. For example, the first step in analyzing any company’s DSCSA obligations is determining whether that company is acting as a manufacturer, wholesale distributor, repackager, or dispenser. A single company can act in different capacities with regard to different products and different transactions, so that determination is critical. The DSCSA sets out specific definitions for each of those sectors. Similarly, all of the traceability obligations attach to a “transaction”, which is specifically defined in the statute and includes numerous, specific exemptions.
For more information on several of key definitions and challenges in the application of those definitions see the PDSA letter to the FDA re: DSCSA Q&As.
Authorized Trading Partners
The DSCSA requires all supply chain trading partners to transact only with other trading partners that are authorized. This generally means that a company can only purchase products from, and sell products to, other companies that are properly licensed or registered. This can create operational challenges, for example, when a trading partner is not otherwise required to be registered. For more information on the authorized trading partner requirement, see PDSA letters (link | link) and a Food and Drug Law Institute article on Authorized Trading Partners.
Passing and Receiving Information
The traceability requirements that commence in 2015 are based on the passing and maintaining of three types of information.
- The transaction information, which includes the name of the product, its strength and dosage form, its National Drug Code, the container size, the number of containers, the lot number, the transaction date, the shipment date, and the name and address of the businesses from which and to which ownership is transferred.
- A transaction history, which is a paper or electronic statement that includes the transaction information for each prior transaction back to the manufacturer.
- A transaction statement, which is a paper or electronic statement by the business transferring ownership of the product attesting that it has complied with the DQSA.
Important nuances apply within each sector, but the traceability obligations effective January 1, 2015 generally require businesses to (i) provide the transaction information, transaction history, and transaction statement to the subsequent owner for each transaction, and (ii) capture and maintain for six years the transaction information, transaction history, and transaction statement for each transaction, whether as the buyer or as the seller. This obligation begins on January 1, 2015 for manufacturers, wholesaler distributors, and repackagers, but the FDA granted a four-month period of enforcement discretion. Dispensers were provided until July 1, 2015 to begin providing, capturing, and maintaining the information, but were also granted four months of enforcement discretion.
Many questions have arisen during the implementation of these requirements. See the PDSA letter to the FDA re: DSCSA Q&As for some of the commonly encountered questions.
Suspect and Illegitimate Products
In addition to simply passing and maintaining information, companies must also be able to use that information to confirm the validity of product that it handles. Beginning January 1, 2015, trading partners must maintain systems and processes for quarantining and investigating products that are suspect or illegitimate. Both of those terms are specifically defined in the statute. As part of an investigation, companies must be able to verify the transaction history and transaction information of a product. In essence, although a company is not required to verify all transaction history and transaction information upon the receipt of each product, companies must be able to retroactively verify the information they have, upon request. If a product is determined to be illegitimate, the partner must notify the Secretary and its trading partners, take steps to disposition the product, and, if requested by an appropriate government official, retain a sample of the product.
In June 2014, the FDA published a draft guidance on Identification of Suspect Product and Notification. PDSA’s comments on the draft guidance provide additional information about this obligation.