Alerts and Updates

FDA Publishes Second Draft Guidance for Further Clarification of Drug Supply Chain Security Act

November 17, 2014

Each state, therefore, is required to analyze its laws to determine if a change to them must be made before the new wholesale drug distributor regulations take effect.

Earlier this year, the U.S. Food and Drug Administration (FDA) requested information and commentary for the implementation of the Drug Supply Chain Security Act (DSCSA) that in part "establishes a Federal system for tracing prescription drug products through the pharmaceutical distribution supply chain and requires trading partners to pass, receive, and maintain certain product and distribution information." (See Duane Morris Alerts from June 24, 2014, and April 11, 2014.) In its latest draft guidance issued in October 2014, the FDA provides some answers to questions based on the information provided in response to its requests in order to "(1) help industry and States understand the immediate effects of the law and (2) clarify section 585's effect on State product tracing and standards and requirements for wholesale distributor and third-party logistics provider (3PL) licensing."

The latest guidance is divided into the following categories: "Product Tracing," "Wholesale Drug Distributor Standards and Licensing" and "Third-Party Logistics Provider Standards and Licensing." With respect to product tracing uniformity, FDA says that, as of the enactment date of the DSCSA on November 27, 2013, state requirements for "tracing prescription drugs through the pharmaceutical distribution supply chain that are inconsistent with, more stringent than, or in addition to" those requirements in section 503(e) of the Federal Food, Drug, and Cosmetic Act (FDCA) (as amended by the DSCSA) are preempted. Further, federal pedigree requirements under section 503(e)(1) of the FDCA will continue to apply until January 1, 2015, after which federal tracing requirements under section 582 of the FDCA will go into effect.

For wholesale drug distributor standards and licensing, FDA says that, under section 585(b), state standards, requirements or regulations with respect to licensing for wholesale distributors are preempted if they do not meet the minimum requirements of section 503(e) of the FDCA (as amended by the DSCSA). Each state, therefore, is required to analyze its laws to determine if a change to them must be made before the new wholesale drug distributor regulations take effect (i.e., two years after the new regulations issued under section 583 are finalized by FDA). If a state's laws are not inconsistent with, less stringent than, directly related to, or covered by federal law, it can continue to license wholesale drug distributors until the new regulations go into effect. Once the federal regulations go into effect, each state's licensing laws must be aligned with the federal minimum standards to avoid preemption by the federal regulations.

State 3PL standards and licensing will likewise be preempted under section 585(b) if a state's standards, requirements or regulations fall below the minimum requirements of federal law. Further, under section 585(b)(2), 3PLs are not allowed to be licensed as wholesale drug distributors. Therefore, "[s]tates would need to establish separate licensing programs for wholesale drug distributors and 3PLs."

For Further Information

If you have any questions about this Alert, please contact Frederick (Rick) R. Ball, Carolyn A. Alenci, any member of the Pharmaceutical, Medical Device, Pharmacy and Food industry group or the attorney in the firm with whom you are regularly in contact.

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