FDA Delays Enforcement of the New "Track-and-Trace" System Requirements

This article has been republished with permission from the American Health Law Association.

On December 31, the Food and Drug Administration (FDA) issued a guidance stating that it will delay enforcement of certain new product tracing requirements, included in the recently enacted Drug Supply Chain Security Act (DSCSA), until May 1. The delayed requirements were slated to take effect for manufacturers, wholesale distributors, and repackagers on January 1; however, the FDA does not intend to enforce the new requirements because of concerns regarding the readiness of the pharmaceutical distribution supply chain to comply with these requirements.

Signed into law on November 27, 2013, the DSCSA is part of the Drug Quality and Security Act, which also contains new requirements for pharmacy compounding. Adding sections 581 through 585 as Subchapter H of the Federal Food, Drug, & Cosmetic Act (FDCA), the DSCSA aims to establish a nationwide pharmaceutical “track-and-trace” system to strengthen the pharmaceutical supply chain and deter counterfeiting. This system requires manufacturers to label products with unique serial numbers, allowing the products to be tracked, and any suspect product to be traced back to its point of origin into the system by mandating strict recordkeeping requirements. Under the DSCSA, “product” means a finished prescription drug in dosage form that can be administered to a patient without substantial further manufacturing (e.g., capsules, tablets, and lyophilized products before reconstitution), but does not include blood or blood components intended for transfusion, radioactive drugs or radioactive biological products, imaging drugs, certain intravenous products, any medical gas, homeopathic drugs, or compounded drugs.

Under the new requirements, drug packages will need to begin carrying a serial number reflecting the manufacturing lot within four years of the date of the law’s implementation (by 2017), and the serial numbers will need to become part of a package-level tracking system within six years after that (by 2023). Each entity in the supply chain (from the original manufacturer to the end distributor) must keep track of when the product comes in to and goes out of its possession, so that its path can be traced by federal regulators if there is a problem.

Since the enactment of the DSCSA, the FDA has issued several announcements and guidance documents related to the implementation of the new system:

In the February 20, 2014 Federal Register, the FDA issued a call for comments from the pharmaceutical industry regarding the interoperability of transaction standards required under the DSCSA. The FDA aims to ensure that all transaction information is interoperable, a challenging task considering: (1) the vast amount of information the FDA requires in each transaction file (i.e., proprietary drug name, strength, dosage form, National Drug Code, container size, number of containers, lot number, transaction date, shipment date, and business information); and (2) the many different types of entities involved, including pharmaceutical manufacturers, federal regulators, drug distributors, drug dispensers, and other supply chain companies, all of which currently have unique and differing systems in place for processing transactions. In this notice, the FDA also requested input on (1) current industry practices, (2) the feasibility of establishing standardized documentation, and (3) the exchange of information between the private industry and the regulators.
In June, the FDA released “Drug Supply Chain Security Act Implementation: Identification of Suspect Product and Notification,” a draft guidance to explain how to identify and notify the FDA of suspect products, with a goal of better protecting the safety of the pharmaceutical supply chain. The guidance further explains several of the elements intended to protect consumers from counterfeit, suspect, or adulterated drugs within the pharmaceutical supply chain. In addition, the FDA outlines actions and products that should raise suspicions and that may be associated with a higher risk of suspect products entering the supply chain. The FDA also details its notification procedures in this guidance document.
In October, the FDA released “The Effect of Section 585 of the FD&C Act on Drug Product Tracing and Wholesale Drug Distributor and Third-Party Logistics Provider Licensing Standards and Requirements: Questions and Answers,” a draft guidance confirming that the FDA’s track-and-trace system will preempt other state efforts, either new or continuing, for tracing prescription drugs through the pharmaceutical supply chain, to the extent that those state efforts are inconsistent with or more stringent than the requirements in the DSCSA.
In November, the FDA issued “DSCSA Standards for the Interoperable Exchange of Information for Tracing of Certain Human, Finished, Prescription Drugs: How to Exchange Product Tracing Information,” a draft guidance that sets forth the initial standards to assist trading partners (e.g., manufacturers, wholesale distributors, dispensers, and repackagers) with the interoperable exchange of product tracing information in an accurate, efficient, and consistent manner through the extension and/or use of current systems and processes. For a system, process, or practice to be considered “interoperable,” the subsequent purchaser must be able to successfully capture and maintain the product tracing information in either paper or electronic formats for not less than six years after the date of the transaction.
In December, the FDA issued “DSCSA Implementation: Annual Reporting by Prescription Drug Wholesale Distributors and Third – Party Logistics Providers,” a draft guidance to explain how wholesale distributors and third-party logistics providers should report information to the FDA on an annual basis. They must report state licensure information, name, and address of each facility and whether the company is subject to state or federal disciplinary actions. The FDA also wants to be provided with unique facility identifier numbers for each facility and the date the facility’s license expires. The FDA intends to make the information reported to it available on its website.

The December 31 guidance, “DSCSA Implementation: Product Tracing Requirements – Compliance Policy,” delays enforcement of the new requirements for manufacturers, wholesale distributors, and repackagers until May 1. The guidance was issued in response to concerns expressed by some trading partners that “unforeseen complications with the exchange of the required information may result in disruptions in the pharmaceutical supply chain, and ultimately could impact patients’ access to needed prescription drugs.” This delay applies only to the requirements that manufacturers, wholesale distributors, and repackagers provide and capture tracing information. It does not extend to other requirements in Section 582 of the FDCA, such as verification of illegitimate or suspect products and quarantine, investigation, notification, and recordkeeping; or the requirement to engage only in transactions with authorized trading partners. Additionally, there is no indication from the FDA in the December 31 guidance that the stated delay will affect other timeframes or deadlines set forth in the DSCSA.

This article was written by Hall Render attorney Andrea Anantharam. If you have any questions, please contact her at (248) 457-7822 or aanantharam@hallrender.com.