TrackTrace Rx

Month: November 2015

What Transactions are Considered Exempt from the DSCSA?

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Screen Shot 2015-11-23 at 12.10.58 AM

One might think that under DSCSA, dispensers are only required to focus on the literal buying and selling of drug product when it comes to figuring out whether or not T3 compliance documentation needs to be exchanged during a transaction. However, unless you fit the exemption criteria, a “transaction” simply means a change of ownership – money doesn’t necessarily have to have changed hands.

For example, there are exemptions for specific patient needs, and T3 documentation is also unnecessary if you are moving product from, say, a distribution center to a hospital that is owned by the same umbrella company.

The law is tricky, and exemptions may count in some transactions and not others. This makes it difficult to determine if you need to follow the provisions of DSCSA as well as whether or not you need to inform any trading partners who will receive your product, as their agreement is required before any exemptions can become “official”.

So what transactions exactly are considered exempt? Here’s a rundown of the transactions manufacturers might be involved in that don’t require the exchange of Transaction Statements, History, and Information documentation:

  • Intracompany distribution of any product between members of an affiliate or within a manufacturer
  • The distribution of product samples by a manufacturer or a licensed wholesale distributor
  • The distribution of over-the-counter (OTC) drugs. Even if drug product in certain States must be sold behind the pharmacy counter to patients with physician-issued prescriptions and not on shelves, it will not be considered a prescription drug under DSCSA ruling because the law operates on a Federal, not State level. It regulates drugs nationally, creating an exemption
  • The distribution of “medical convenience kits”, a collection of finished medical devices, which may include a drug product or biological product, assembled in kit form strictly for the convenience of the purchaser or user, if:
    • the kit is assembled in an establishment that is registered by the FDA as a device manufacturer
    • the kit does not contain any controlled substance
    • the kit manufacturer purchased the drug or biologic product contained in the kit directly from the pharmaceutical manufacturer or from a wholesale distributor that purchased it directly from the pharmaceutical manufacturer, and the primary container label of the drug or biologic product contained in the kit is not altered and the drug or biologic product contained in the kit is:
      • An intravenous solution intended for the replenishment of fluids and electrolytes
      • A product intended to maintain the equilibrium of water and minerals in the body
      • A product intended for irrigation or reconstitution
      • An anesthetic
      • An anticoagulant
      • A vasopressor
      • A sympathomimetic

As soon as you determine whether your product is exempt from T3 documentation exchange practices, it’s important to notify those trading partners – you don’t want any wholesale distributors, 3PLs or repackagers demanding transaction documentation when they receive your product and you not being able to provide it. It could not only mean that shipments are refused because your trading partners want to comply with the law, but it could get you into hot water with the FDA.

Another quick exemption to note is if your product is a device (even an “Rx Only” device as mandated by the FDA) then you also don’t have to be concerned with DSCSA documentation requirements.

When evaluating exemptions and considering the need for compliance documentation, it can also be a good time to adjust your business processes for the future. Given that DSCSA focuses so heavily on tracking the history and progress of all product that goes through the supply chain, and remembering that there are more requirements when it comes to inspections and reports about that product, there is definitely value in creating an internal record of all exempt transactions that your company makes just in case. Since it’s likely that you will have had to update your system for receiving and storing data with the new regulations, it makes sense to have an additional system to handle the exemptions too, on the off chance an inspection includes checking on your non-DSCSA transactions.

Loaning, bartering and donating product, though, are considered DSCSA transactions.

Naturally, when you resell product as a dispenser, you need to provide compliance documentation. You’re also going to have to have a compliance system that understands the additions that have to be made to T3 documentation when the product leaves your hands. For example, even if you receive product from a wholesaler that doesn’t have a lot number and transaction date, you’re still going to be required to provide that information with your T3 on the outgoing product. It pays, if you anticipate that you’re going to be reselling product, to make sure that you have the lot numbers of any product upon receipt to avoid hassles at the other end.

Excess product isn’t exempt from DSCSA requirements either. Dispensers know that selling product that won’t be used before the end of its shelf life – likely at a discounted price – is just inventory management; why let it expire and become waste when another dispenser could use it? However, no matter the reasoning or exact costs incurred, T3 documentation still has to be sent when the product is exchanged.

Loaning or bartering – which happens often in hospital or clinic settings and generally involves trading one product for another between dispensers – needs to be DSCSA compliant just like a standard sale would be, otherwise you cannot legally accept and dispense that product. Regardless of the agreement between yourself and your trading partner, there is a definite change of ownership that occurs with bartering, so obviously T3 documentation is in play.

Lastly, under certain circumstances, you may be involved with donating product to a business, or you may receive donated product from a wholesale yourself. In either case – unless there are any exemptions in place such as sending out product samples, or if you are donating the product to a non-profit organization affiliated with your company (both listed in the exemptions above) – T3 documentation must go with the product.

It’s also important to fully vet your current trading partners you might loan, barter, or get product donated from, to make sure you’re all on the same page when it comes to your compliance documentation, and also to make sure that they aren’t going to put you at risk by not understanding the regulations or compliance requirements.

Overall, cash changing hands is not the be-all and end-all of compliance when it comes to the new DSCSA set up. If you have exchanged product via bartering, donation, or loan, then it’s likely – barring a few exemptions – that you’ll have to provide and keep a record of T3 information. The DSCSA was created with the intention of tracking drug product down to the individual bottle, right up until it reaches a patient, so any movement of it before that level should be recorded for those purposes.

The Importance of Lot Numbers to Dispensers Under DSCSA

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Scan Lot Number

It seems a common question that has arisen since the implementation of DSCSA is whether or not to enter a lot number when drug product changes hands, especially if the lot number isn’t received with a shipment from a wholesale distributor.

Until November 27, 2017, products will be traced by their lot numbers. After that, serialization laws are in effect, mandating that manufacturer imprint unique serial numbers on each unit-level product and package. This mandate will mean a much more thorough and accurate tracing and tracking system meant to tackle the issue of counterfeit product on the pharmaceutical market.

The DSCSA defines the pieces of information that need to be included in the three parts of your T3 documentation. Lot numbers are one piece of data that needs to be included in your Transaction Information for every item in every shipment, as well as the product’s National Drug Code. So until November 2017 when the unique serial numbers become required for every unit-level product, the key piece of the Transaction Information is the lot number.

As mentioned in an article published by PubMed Central (part of the US National Institutes of Health’s National Library of Medicine (NIH/NLM)), this means that “if a manufacturer sells one million saleable items in a year, and it has 10 packaging events during that year where 100,000 units are packaged, then 10 different lot numbers would be assigned, and that number would be printed on each saleable unit (sometimes on a syringe, for example) packaged during that “event,” on the container the unit is packaged in, on the carton it is shipped in, and often on the pallet the carton is placed on.”

Basically, the fact is, lot numbers are a necessary evil in certain scenarios until they get phased out with the introduction of mandatory serialization in 2017. The law is somewhat particular on the occasions lot numbers need to be recorded, and who is required to have a record of them.

For instance, the original manufacturer of the product always has to include the lot number with the Transaction History, Statement and Information documentation they give to their customers. But, if the wholesale distributor purchased the product straight from the manufacturer, they aren’t required to provide the lot number to their customers, nor do they need to provide the initial transaction date. Some distributors will include the lot number, but it’s at their discretion whether they do or not.

Wholesale distributors who purchase from someone other than a manufacturer are obligated to provide the lot number with T3 documentation, and you are obligated to store it along with that documentation for at least 6 years as mandated by DSCSA law.

So, when lot numbers aren’t included, should you as a dispenser locate them from a different source and then manually enter them into your compliance system for storage?

If you choose not to, it could alleviate your work load. The law being so lenient when it comes to compliance on this matter, as well as the knowledge that lot numbers will become increasingly less important as serialization deadlines loom make it seem like extra work that might be ultimately unnecessary, but there are reasons to consider it – both business- and compliance-related.

The law focuses on the circumstances under which you will receive lot numbers and says very little on what’s required if you don’t, except to stipulate that if the lot number is provided, you need to capture and archive it along with your other compliance documentation. So if you don’t receive it, why is it beneficial to source and record the lot number anyway?

A big reason is reselling product. If you ever find yourself reselling product – or even loaning, bartering or donating product – you will be required to send with it all the matching T3 documentation, including the lot number. This means it’s a much more efficient option to capture the lot number when product first arrives to you, rather than being required later to dig through your inventory if you send it onward. Not capturing the lot number on the inbound also makes compliance questionable – if you don’t find the appropriate lot number on receipt, can you be sure you have the correct T3 on the way out?

Another reason to record lot numbers upon receipt is if you find yourself having to respond to an investigation or inspection. Inspections and investigations can be carried out by state officials, the FDA, and the NABP (National Association of Boards of Pharmacy), and any requests for information must be responded to with the relevant compliance documentation within a 48-hour window. There’s also a chance you could be asked to verify details about a product’s Transaction History or Information – therefore effecting a need for the product’s lot number.

In the event of an investigation into suspect product, this same need for compliance documentation will arise, and if you haven’t captured the lot number upon original receipt of the product, you’re going to have to manually search all the products you have shelved in order to find which one(s) are suspect and need to be recalled. However, if you have the lot number already entered into your compliance repository, the process will be expedited and may also prevent having to quarantine all products with the suspect NDC. Having to quarantine potentially large numbers of product is likely to have a greatly negative effect on your business, as it could impact your inventory numbers and therefore your ability to serve your patients.

So if you do receive product from a wholesaler and the lot number isn’t included with the T3 documentation, but you want to record it – where can you find it?

The answer is very simply, as the lot number is always printed on the product’s packaging in human-readable format, and it is also sometimes included on the shipment’s packing slip.

Now the biggest challenge, how does one map their receiving lot numbers to their specific T3s?  Imagine if you have received many EDI ASNs with multiple quantities of the same product divided into 10 different lot numbers. How does one map this out? At TrackTraceRx we are the first system that intelligently allows you to easily and quickly organize and map these lot numbers correctly. Schedule a demo today to see how our system handles this.

All in all while DSCSA gives dispensers a lot of room to move when it comes to deciding on lot number retention if it isn’t already included in T3 documentation, and while lot numbers are a temporary method for traceability, it’s important to understand the implications of not storing them even if it seems like an extra hassle at the time. What’s most at stake is maintaining DSCSA compliance and also long-term efficiency with your business, and fiddling around with lot numbers well after receipt of product doesn’t maximize either.

A DSCSA Random Study Request

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FDA

Today we received a request from one of our customers for assistance in responding to a particular letter they received from the U.S. Department of Health and Human Services, Office of Inspector General. We have assisted customers during audits in the past, but never seen a letter request like this one. Our customer was nice enough to allow us to share the contents of the letter for educational purposes.

On the Email (we have removed any disclosing information)

******Begin Email******

Dear XXXXX,

This email is to notify you that the U.S. Department of Health and Human Services, Office of Inspector General is conducting a study on early implementation of product tracing requirements outlined by the Drug Supply Chain Security Act (DSCSA).

For this study, we plan to collect documents from and interview a sample of wholesale distributors. Your company has been selected for inclusion in our study. Please send requested documents to XXXX by XXXXXX.  An OIG staff member will contact you shortly to schedule an interview. See the attached letter for further details.

If you would like to designate a different contact for the survey, please reply with the name, title, email address, and telephone number of the preferred contact by XXXXXXX.

Thank you for your assistance.

Best,

XXXX

******End Email******

Attached to the email was a official letter with the official letterhead of the  U.S. Department of Health and Human Services, Office of Inspector General.

*****Begin Attached Letter*****

To XXXXXXXX:

The U.S. Department of Health and Human Services, Office of Inspector General is conducting a study on early implementation of product tracing requirements outlined by the Drug Supply Chain Security Act (DSCSA).

The purpose of this study is to describe the variety of ways in which wholesale drug distributors are meeting requirements as detailed in the DSCSA §582(c)(1) and by guidance published by the Food and Drug Administration (FDA) in November 2014 governing product tracing. We plan to issue a public report that will summarize obstacles and best practices to wholesale distributor implementation at a general level. The report may also include recommendations to the FDA about ways to improve program operations to assist with implementation (e.g., clarify product tracing guidance, provide technical assistance, etc.).

For the study, we are interviewing a sample of wholesale drug distributors about their product tracing practices. Your organization was selected to participate in the study, and we are requesting the following.

  1. An hour long interview—to take place between XXXXXX
  2.  Examples of traceability documents (i.e., transaction information, transaction history, transaction
    statement, direct purchasing statement) for two product transactions from XXXXXXX
  3. Standard operating procedures for product tracing processes, if available.

An OIG staff member will contact you shortly to schedule the interview and answer any questions you may have. Please send traceability documents and standard operating procedures to Phil Sung at the e-mail below by XXXXXXX. If you have any questions or need additional information at this time, please contact XXXXX at XXXXXX or XXXXXX. If you would like to designate a different contact for the survey, please reply with the name, title, email address, and telephone number of the preferred contact by XXXXXXX.

Thank you for your time and cooperation.

******End of attached Letter******

A few points:

1. The government is really looking for industry feedback. They are reaching out to different pharmaceutical companies. If this is mandatory or not, is yet to be seen. Rejecting it could send a message that your company is not prepared.

This statement really outlines the purpose of the study.

We plan to issue a public report that will summarize obstacles and best practices to wholesale distributor implementation at a general level. The report may also include recommendations to the FDA about ways to improve program operations to assist with implementation (e.g., clarify product tracing guidance, provide technical assistance, etc.).”

2.For the study, we are interviewing a sample of wholesale drug distributors about their product tracing practices. Your organization was selected to participate in the study”

By the sound of it, more wholesalers will probably be selected.

Interesting outline of what is required for the study:

  • An hour long interview—to take place between XXXXXX
  •  Examples of traceability documents (i.e., transaction information, transaction history, transaction
    statement, direct purchasing statement) for two product transactions from XXXXXXX
  • Standard operating procedures for product tracing processes, if available.

If you haven’t created a Standard Operating Procedure (SOP) for product tracing read our post about it here. We also include a free SOP template.

Finally, we will be assisting our customer during this interview and documentation process. If possible, I will post an aftermath of how it went.

 

DSCSA – Standard Operating Procedure for Product Tracing

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Standard Operating Procedures (SOP) are common documents that outline step-by-step processes to achieve overall results of a longer overall process. Even though it is not a requirement from the DSCSA to have a product tracing SOP, we have noticed that during a few audits, most auditors  are requesting for one. We decided to create a simple Product Tracing SOP for you to build upon. Feel free to download it here:

TrackTraceRx-sop-template-word