Last month, the Department of Health and Human Services’ Office of Inspector General (OIG) released its latest report on compliance with the Drug Supply Chain Security Act (DSCSA). As we discussed in a prior post, the DSCSA requires enhanced security and accountability for prescription drugs throughout the U.S. pharmaceutical supply chain, with phased-in obligations for the various trading partners over 10 years, beginning with the law’s passage in November 2013. Covered trading partners include manufacturers, repackagers, wholesale distributors, and dispensers.

The OIG’s most recent study focuses on dispensers of various sizes and types, including independent retail pharmacies, chain retail pharmacies, and small and large hospital pharmacies. Of the 40 dispensers interviewed, the agency found that all them had received at least some drug product tracing information from their trading partners, and 26 of these dispensers received all required elements of this information. The remaining 14 dispensers were missing a few of the required elements. Two of the dispensers were unaware of the DSCSA. The following table summarizes the missing information:

The OIG also found that dispensers received drug product tracing information in a variety of transmission modes and formats. The agency believes this is a result of dispensers and their trading partners using different systems rather than adopting a standardized way to exchange this information. Neither the DSCSA nor FDA guidance requires a uniform transmission mode or format for the exchange of drug product tracing information.

To facilitate dispensers’ compliance with the DSCSA, the OIG recommends that FDA offer educational outreach to dispensers where appropriate. Specifically, the agency recommends that FDA provide education to ensure that dispensers understand their responsibilities to receive complete drug product tracing information from trading partners before taking ownership of drug products.

For its part, FDA concurred with the OIG’s recommendation and intends to review its dispenser communications plan and identify and create opportunities to work with dispenser-centric trade and professional organizations to provide additional education and outreach. FDA also noted in its response that, as the last trading partner in the supply chain before a drug product is dispensed to a patient, dispensers play a vital role in ensuring patient safety, making it essential that they understand their product tracing responsibilities under DSCSA.

We will continue to monitor and report on the industry’s implementation of the DSCSA, including the OIG’s planned study of the extent to which drug product tracing information can be used to trace drugs through the entire supply chain.

The Federal Trade Commission (FTC) last week disputed the effectiveness and competitive impact of the Food and Drug Administration’s recently proposed biosimilar naming policy and argued that using different nonproprietary names for biosimilars as compared to their reference biologics would signal clinically meaningful differences to already-confused physicians. The end result would reduce not only biosimilar substitution but also the incentive for aggressive price competition between reference biologics and follow-on biosimilar products.  In its written comments to FDA, the FTC argued that a naming convention akin to FDA’s small molecule policy would encourage lower-cost biosimilar price substitution by maintaining consistency for prescribing physicians. Continue Reading FTC Urges FDA to Rethink Its Biosimilar Naming Proposal; Other Stakeholders Agree

On June 30, 2015, a mere day before the product tracing deadline for dispensers was to go into effect, FDA published a compliance policy guidance that delays enforcement of the applicable product tracing requirements until November 1, 2015 (Compliance Policy).  As we previously discussed, pursuant to the Drug Supply Chain Security Act, most pharmacies in the U.S. are required to have systems in place by July 1, 2015, to receive so-called “3T information” (that is, Transaction History, Transaction Statement, and Transaction Information) regarding the prescription drugs they purchase from suppliers.

In the Compliance Policy, FDA notes that dispensers have expressed concern that electronic systems used to exchange, capture, and maintain product tracing information will not be operational by the original July 1 deadline. Although the agency acknowledges that paper-based transmission may be acceptable in some cases, FDA also notes that many dispensers intend to utilize electronic systems to capture and maintain the 3T information. Accordingly, the Compliance Policy concedes that dispensers may need additional time beyond July 1, 2015 to work with their trading partners to ensure that the 3T information is captured and maintained as required by the DSCSA.

Consequently, FDA does not intend to take action prior to November 1, 2015, against dispensers who, in either case: (i) accept ownership of a covered drug product without receiving the 3T information; or (ii) do not capture and maintain the 3T information provided by the dispenser’s trading partner. Continue Reading FDA Provides 11th Hour Delay of Product Tracing Requirements for Pharmacies

Beginning July 1, 2015, most pharmacies in the U.S. will be required to have systems in place to receive transaction information regarding the prescription drugs they purchase from suppliers.  The requirement stems from a 2013 federal law called the Drug Supply Chain Security Act (DSCSA), enacted as one component of the Drug Quality and Security Act.  In addition to accepting the so-called “3T” information (Transaction History, Transaction Statement, and Transaction Information) for each prescription drug it purchases on or after July 1, covered pharmacies also must have systems in place to segregate and investigate suspect products.

Continue Reading Is Your Pharmacy Ready for Drug Supply Chain Integrity?