On the night before the night before Christmas, the Food and Drug Administration (FDA) did what it could to lessen anxiety in the drug industry by issuing a Final Guidance entitled DSCSA [Drug Supply Chain Security Act] Implementation: Product Tracing Requirements – Compliance Policy. According to this Guidance, FDA intends to delay enforcement of the DSCSA standards requiring companies to track, trace, document and retain information concerning the movement of finished drug products. The prior January 1 enforcement deadline is now postponed until May 1, 2015 (Law Day 2015). FDA's Guidance "recognizes that some manufacturers, wholesale distributors, and repackagers may need additional time beyond January 1, 2015, to work with trading partners to ensure that all of the product tracing information required under [the DSCSA]" is provided and captured.

On the eve of Thanksgiving this year, FDA served up a pre-Thanksgiving turkey in its Draft Guidance on DSCSA compliance entitled DSCSA Standards for the Interoperable Exchange of Information for Tracing of Certain Human, Finished, Prescription Drugs: How to Exchange Product Tracing Information. (See our prior post on that Guidance here.)

The DSCSA requires that by January 1, 2015, manufacturers, wholesale distributors, and repackagers provide and capture product-tracing information, including the transaction information (TI), transaction history (TH), and transaction statement (TS). While FDA cannot change the statutory deadline set by Congress, it can inform industry when it will start enforcing the provisions. Thus, the Guidance does not extend the deadline for compliance but does reflect the FDA's intention to "exercise enforcement discretion" (i.e. not take enforcement action) until May 1, 2015. Although the Guidance does not allow supply chain participants a legally enforceable right to delay compliance with the January 1 deadline, it does give industry an opportunity to avoid disruptions in the distribution of important lifesaving therapies based on the inability of all segments of the supply chain to comply with the law's provisions. It is important, however, that drug supply chain participants recognize that a regulatory guidance does not have the force of law and does not in any manner decrease the urgency of complying with the deadlines set by Congress.

FDA does not intend to exercise enforcement discretion with respect to other provisions of the DSCSA such as verification of suspect and illegitimate product and requirements related to engaging in transactions only with authorized trading partners. FDA issued a Draft Guidance in June 2014 entitled Drug Supply Chain Security Act Implementation: Identification of Suspect Product and Notification requiring FDA be notified of "suspect" and "illegitimate" products, which are defined as:

A Suspect Product is a product for which there is reason to believe it:

  • Is potentially counterfeit, diverted, or stolen;
  • Is potentially intentionally adulterated such that the product would result in serious adverse health consequences or death to humans;
  • Is potentially the subject of a fraudulent transaction; or
  • Appears otherwise unfit for distribution such that the product would result in serious adverse health consequences or death to humans.

An Illegitimate Product exists when there is "credible evidence" showing the product:

  • Is counterfeit, diverted, or stolen;
  • Is intentionally adulterated such that the product would result in serious adverse health consequences or death;
  • Is the subject of a fraudulent transaction; or
  • Appears otherwise unfit for distribution such that the product would be reasonably likely to result in serious adverse health consequences or death to humans.

FDA's Final Guidance addresses the conundrum created by the inability of many drug supply chain participants to produce TI, TH and TS in compliance with the DSCSA deadlines, and this inability renders legitimate products in the supply chain "suspect." This extension in enforcement will not increase the introduction of suspect or illegitimate drug products into the supply chain. Instead, the delay will prevent the removal of legitimate drug products from the market. Participants in the drug supply chain will need to require compliance from those from whom they receive finished drug products, but—at least until May 1, 2015—failure to provide or receive compliant TI, TH, or TS will not render a product suspect or subject to enforcement.

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