Trading Partners May Exhale: FDA Releases Guidance Exercising a Year-Long Period of Enforcement Discretion Related to DSCSA Enforcement of Certain ProvisionsAugust 28, 2023
On Friday, August 25, 2023, FDA released a much-anticipated Final Guidance titled, “Enhanced Drug Distribution Security Requirements Under Section 582(g)(1) of the Federal Food, Drug, and Cosmetic Act,” addressing FDA’s implementation of certain electronic interoperability provisions of the Drug Supply Chain Security Act (DSCSA), which were due to become effective on November 27, 2023. As industry is well aware, by the terms of the statute, the DSCSA’s interoperability provisions become effective ten years after its 2013 enactment, or on November 27, 2023.
The Guidance specifically states that it is issuing the Guidance – applicable to trading partners including manufacturers, distributors, dispensers, and repackagers – to address industry “readiness” to comply with the DSCSA’s provisions.
The compliance policies described in the Guidance focus on the requirement that, beginning November 27, 2023, all trading partners generally will be required to use electronic-based approaches to meet the enhanced drug distribution security requirements set forth in in FDCA section 582(g)(1) (Enhanced Drug Distribution Security). As a reminder (as summarized in FDA’s Guidance) by November 27, 2023, trading partners will be required to:
- Use secure, interoperable, electronic approaches to exchange transaction information, which must include package-level product identifiers, and to exchange transaction statements;
- Have systems and processes in place to verify products at the package level;
- Have systems and processes in place to promptly respond with transaction information/statement for a product, if requested by FDA or other appropriate Federal or State official in the event of a recall or for suspect or illegitimate product investigations;
- Have systems and processes in place to securely facilitate the gathering of information needed to produce the transaction information/statement for a product going back to the manufacturer, as applicable, if requested by FDA, appropriate Federal or State officials (in the event of a recall or for suspect or illegitimate product investigations), or an authorized trading partner for purposes of investigating a suspect product or assisting with such a governmental request; and
- Have systems and processes in place to accept saleable returns under appropriate conditions (i.e., the ability to associate the saleable return product with the transaction information/statement with the particular product).
Drug manufacturers have had electronic systems in place since 2017. However, FDA recognizes that some “technical and operational issues,” including those involving downstream trading partners and other “affected stakeholders,” may not be fully resolved by the deadline. The Agency also understands that additional time may be needed for systems to stabilize and be fully interoperable for accurate, secure, and timely electronic data exchange. FDA intends the Guidance to provide “clarity and flexibility” to trading partners to “help ensure continued patient access to prescription drugs as the supply chain transitions to the interoperable, electronic product tracing at the package level under the DSCSA” while supporting “continued availability of products to patients.” Guidance at 4.
So what is FDA going to do?
FDA will exercise enforcement discretion concerning the implementation of the electronic interoperable exchange of information between trading partners to the package level. FDA does not intend to take action to enforce the requirements, as described below, until November 27, 2024.
- FDCA Section 582(g)(1)(B) requires that, as of November 27, 2023, the transaction information required to be exchanged include the product identifier (i.e., the standardized numerical identifier consisting of the NDC and serial number, lot number, and expiration date) at the package level for each package included in the transaction.
- FDA does not intend to take action to enforce this requirement with respect to product introduced in a transaction into commerce by the product’s manufacturer or repackager before November 27, 2024, and for subsequent transactions of such product through the product’s expiry.
- MOST IMPORTANTLY, FDA states this means that FDA does not intend to take action if the transaction information for product introduced in a transaction into commerce by the product’s manufacturer or repackager before November 27, 2024, does not incorporate—at the package level for each package in the transaction—the product identifier. FDA states this will “facilitate the use and exhaustion of product supply already in the supply chain prior to November 27, 2024.” Guidance at 5.
- FDCA Section 582(g)(1)(D) requires trading partners to have in place processes and systems to respond promptly to a request for transaction information for a product in the event of a recall or an investigation of a suspect or illegitimate product.
- FDCA Section 582(g)(1)(E) requires systems and process to facilitate the secure gathering transaction information for each transaction in the event of a recall or investigation of a suspect or illegitimate product. FDA recommends that trading partners respond to such requests “with its relevant transaction information— if it directly transacted the product(s) that are subject to the request.” Guidance at 7.
- FDCA Section 582(g)(1)(F) requires that each person accepting a saleable return have systems and processes in place to allow acceptance of such product, and may accept saleable returns only if such person can associate the saleable return product with the product’s transaction information and transaction statement.
Last but not least, FDA emphasizes:
This guidance is not intended to provide, and should not be viewed as providing, a justification for delaying efforts by trading partners to implement the enhanced drug distribution security requirements under section 582(g)(1) of the FD&C Act. FDA strongly urges trading partners to continue their efforts to implement necessary measures to satisfy these enhanced drug distribution security requirements.
Guidance at 5.
FDA implores industry to diligently “keep at it.” But in the meantime, enforcement activity with respect to the areas described above neither lingers nor looms in the imminent future. We applaud FDA’s flexibility as industry seeks to comply with the DSCSA’s multiple requirements.