A Breakdown of the Draft Guidance for The DSCSA’s Grandfathering Policy

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When the Drug Supply Chain Security Act was initially passed back in 2013, it was required that the FDA put out guidance information regarding the grandfathering of specific product identifiers for certain prescription drug packages. The DSCSA requires every package of drugs as well as homogenous cases of products in the drug supply chain to be equipped with some kind of identifier. It was likely that packages of prescription drugs which were already in finished dosage form would be considered to be grandfathered in, yet only this past month did the FDA get around to releasing information about their grandfathering policy.

All comments on the new guidance draft are due by January 26th of next year, and in the meantime the guidance specifies the circumstances under which a homogenous case of product not equipped with identifying information, as defined by Section 582(a)(5)(A) of the DSCSA, will be grandfathered (exempted) from the identification requirements.

The FDA explains that certain product identifier requirements are considered exempt from the act if the homogenous cases of drugs are “in the pharmaceutical distribution supply chain at the time of the effective date of the requirements of [section 582 of the DSCSA].”

What does the mean exactly? It essentially means that a drug package or homogenous packages or case of drug products is considered already in the pharmaceutical supply, and thus exempt from DSCSA standards, if the manufacturer of the product packaged the product before the 27th of November, 2018.

The Product Identifier Delay

You may be wondering why the date for exemptions is so late, but the FDA has stated that their new guidance should be considered with regard to their earlier draft guidance that discussed product identifiers.

In their earlier guidance called “Product Identifier Requirements Under the Drug Supply Chain Security Act” the FDA announced that it would be delaying the serialization deadline for one year. This meant that while the original intended deadline for serialization was November 27th of this year, manufacturers now have another year to be in compliance with the new serialization rules. The FDA is exercising their enforcement discretion for manufacturers who haven’t added product identifiers to drug packages yet. It’s hard to say exactly that the reasoning behind this decision was, but the failure to get the grandfathering guidance out by their initial deadline may have played some role in the decision.

It’s important to note that manufacturers can’t merely claim that they packaged a case before November 27, 2018. There must be documentation supporting this claim. According to the FDA if a drug package or homogenous case isn’t labeled with a product identifier, and yet is accompanied by the requisite transaction history or transaction information, then it is reasonable for a trading partner to conclude that the product had been packaged before the deadline. Yet if the transaction history or transaction information doesn’t display a sale or handling prior to the November deadline, then the transaction statement should be used as an indication of the product being in the supply chain before the deadline, assuming there are no other signs that the product is illegitimate.

The FDA communication goes on to discuss how trading partners should handle grandfathering exceptions. The draft guidance specifically addresses manufacturers, repackagers, distributors and dispensers who are exempt from the two Section 582 requirements.

Manufacturers:

When manufacturers investigate an unserialized product to determine its legitimacy, the manufacturer does not have to use the product identifier for purposes of verification. The manufacturer must still make use of the transaction information and transaction history data to determine legitimacy.

If an authorized trading partner has the product request verification from the manufacturer then said manufacturer is not required to use a product identifier, yet they must still abide by the other standards referenced in Section 582(b)(4)(C) which gives information on how to determine a product’s legitimacy.

Repackagers:

Product repackagers are classified as “partially exempt” when in possession of a product without serialization after November 27th, 2018, if the product lacking an identifier was accepted after that date. If the repackager were to hand over the product to another trading partner after Novermber 27, 2018, the repackager must add a product identifier.

Similar to the other trading partners, repackagers may refer to both transaction history and transaction information data to determine the legitimacy of a product lacking an identifier.

While a repackager who repackages and/or sells unserialized products before the November deadline are considered exempted from the mandate to use a product identifier to determine authenticity, the repackager must still abide by any other relevant requirements.

Wholesale Distributors:

Wholesale distributors are considered to be exempt from the statue, which requires they distribute only serialized products after November 27, 2019. They aren’t required to verify the legitimacy of products utilizing the product identifier starting on November 27, 2019, but they are required to use all available transaction data, such as transaction history and transaction information, to assess the legitimacy of the product.

Dispensers:

Dispensers are classified as exempt from the provisions of Section 582(d)(2). This means that they don’t have to only engage with serialized products after November 2020. Wholesale distributors also don’t have to verify products using the product identifier, much like the other trading partners. Starting November 27, 2020 they have to use all available transaction data to determine the legitimacy of a product.

No Sunset Deadline?

If you are surprised that there’s no hard deadline regarding when trading partners must stop dealing in products without an identifier, it is because grandfathered products can be used in transaction until those products expire. The FDA expects that there will be very few drug products still within date by November 27, 2023.

Though the guidance comes two years late, it is still helpful. By clarifying their policy on the grandfathering of drugs without an identifier, the FDA will hopefully reduce confusion on the topic and allow trading partners to rest at ease regarding grandfathered products.

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