Annual Reporting

The Food and Drug Administration (FDA) recently issued a Draft Guidance entitled "Drug Supply Chain Security Act Implementation: Annual Reporting by Prescription Drug Wholesale Distributors and Third-Party Logistics Providers."

guidance outlines the annual reporting requirement for Third-Party Logistics Providers (3PLs) which began on November 27, 2014 and for prescription drug wholesale distributors (Wholesale Distributors) slated to begin on January 1, 2015. The Drug Supply Chain Security Act (DSCSA) requires the Food and Drug Administration (FDA) to make Wholesale Distributors' reported information publicly available on its website, and FDA plans to post the information reported by 3PLs as well. In this draft Guidance, FDA identifies required information and voluntary reporting of "additional information." By requesting additional information, FDA intends to provide uniformity for Wholesale Distributors and 3PLs on its online platform—thereby enabling supply chain participants to confirm compliance by others in the supply chain.

We are now in the second year of the ten-year implementation of the DSCSA. While many of the DSCSA requirements have yet to be formulated, many significant requirements are well under way and January 1, 2015 is an important trigger date.

Initial Reports: What, When and How

What

Wholesale Distributors: Wholesale Distributor will provide for each of their facilities:

Identity

  • Name (including all trade names);
  • Facility address (as set forth in the license);
  • Unique facility identifier (UFI); and
  • A designated "contact person" with email and telephone number.

License information

  • State
  • License number
  • Expiration date; and
  • Disciplinary action within a 12-month period.

3PLs: DSCSA defines a 3PL as any entity that "provides or coordinates warehousing, or other logistics services of a product in interstate commerce on behalf of a manufacturer, wholesale distributor, or dispenser of a product, but does not take ownership of the product, nor have responsibility to direct the sale or disposition of the product." For each of their facilities 3PLs will provide:

 Identity

  • Name (including all trade names and dba's);
  • Facility address (as set forth in the license);
  • Unique facility identifier; and
  • A designated "contact person" with email and telephone number.

 License information

  • State;
  • License number;
  • Expiration date; and
  • Disciplinary action with 12-month period (all relevant information is required for 3PLs).

Facilities that conduct both wholesale distribution and 3PL services must report under both categories.  FDA is currently relying on the D-U-N-S® Numbers, Dun & Bradstreet's free service, for facility identifiers. FDA previously issued a Guidance on Identifiers that also sets out a system for alternate identifiers.

While DSCSA requires that Wholesale Distributors and 3PLs provide state licensing information, not all states have set up licensing systems. In those instances where no state licensing requirement exists, the facility must register with FDA. FDA is still working to establish a system for licensing wholesale distributors and 3PLs, however. Nevertheless, Wholesale Distributor and 3PL licensing is largely governed by state law. The DSCSA requires compliance with all state obligations, including those arising in states requiring licensing for products being distributed into the state.

When

The annual reporting period is between January 1 and March 31. The initial reporting period for 3PLs, however, is November 27, 2014 through March 31, 2015. Newly licensed entities must report within 30 days of being licensed.

Reporting for "significant disciplinary action" is required within 30 days of the final action by the state or federal licensing authority.

How

The FDA website portal permits facilities to enter all the reporting information through a single account. An alternative route to reporting is available through the FDA's Electronic Submissions Gateway using extensible markup language (XML) files in a Structured Product Labeling (SPL) format. Alternate methods require contacting FDA.

Federal Preemption of State Licensing Requirements

In October 2014, FDA issued its Draft Guidance entitled "The Effect of Section 585 on the FD&C Act on Drug Product Tracing and Wholesale Drug Distributor and Third-Party Logistics Provider Licensing Standards and Requirements"(DSCSA Preemption Guidance). This draft guidance is a preemption reminder to states who have pedigree and product tracing "standards and requirements." As of January 1, 2015, the DSCSA preempts state requirements that increase or decrease the obligations of Wholesale Distributors or 3PLs. Most immediately that means the Transaction History (TH), Transaction Information (TI) and Transaction Statement (TS) requirements of the DSCSA trump state requirements. See our prior reporting on the subject here and here. FDA has not issued its final regulations so a determination of whether a state's requirements fall above or below the federal requirements will have to wait until FDA issues final regulations.

FDA Licensing Regulations

Under the DSCSA, the licensing regulations for Wholesale Distributors and 3PLs must be issued within two years of enactment (i.e. November 27, 2015) and will be effective one year later for 3PLs and two years later for Wholesale Distributors.

The Preemption Issue

Article Six, Clause 2 of the United States Constitution establishes the United States Constitution and federal statutes as "the supreme law of the land." In the Drug Supply Chain Security Act (DSCSA) Congress created a federal system for product tracing and established requirements for supply chain participants. Congress created the DSCSA in light of states enacting expansive laws controlling the drug supply chain and those who participate in the movement of drugs in the US.

Conclusion

As the DSCSA implementation proceeds, FDA is taking aggressive steps to meet its implementation deadlines. For industry, there is much uncertainty and the time and expense of compliance is significant. An important first step towards compliance is to have a person dedicated to supply chain issues who can check the regulatory status of other participants in the distribution chain. As the provisions of the DSCSA come into effect, integrating supply chain compliance into a business's overall compliance program will be critical.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.