From The Editor | October 28, 2014

2nd Draft Guidance Under DSCSA Offers Clarity For 3PLs As January Deadline Approaches

By Trisha Gladd, Editor, Life Science Connect

Trisha Gladd

Earlier this month, the FDA announced the availability of the second draft guidance under the Drug Supply Chain Security Act (DSCSA), titled The Effect of Section 585 of the FD&C Act on Drug Product Tracing and Wholesale Drug Distributor and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. While clarifying information is provided, the guidance is still in draft form and more information from industry will need to be collected in order to drive it to a finalized state.   

In the DSCSA, there isn’t a specific section for third party logistics providers (3PLs) in terms of traceability or in terms of the verification investigation requirements, but the law does allude to licensing requirements being established. States may establish 3PL licensing requirements until federal requirements are finalized and take effect. When that happens, state requirements will be preempted if they are not consistent with, or as stringent as, the federal requirements. The guidance sets similar federal licensing preemption expectations for the wholesale distributor requirements.

Dave Colombo, KPMG Life Sciences Advisory
Dawn Wang, KPMG Life Sciences Advisory

I recently spoke with Dave Colombo and Dawn Wang with KPMG Life Sciences Advisory to get their feedback on this new guidance. Colombo and Wang believe both industry and FDA will need to be willing to learn as they go, but at the same time, remain vigilant in strengthening existing internal processes. “Companies likely already have some type of process in place to manage their trading partner relationships, so the next step would be to make sure whatever process being followed now is internalized in a standard operating procedure or in a quality management system,” says Colombo. He adds that we should expect some period where both state and federal law will be in play, much like manufacturers or wholesalers today that are linking their IT systems or master data in order to maintain both a state board of pharmacy license and a DEA license for the wholesale distributor facilities. “For now, organizations should continue to monitor state and federal activities in this area before they determine what further actions to take,” he says.

Under DSCSA, FDA is expected to establish a database for 3PL reporting to the FDA by November of this year. A database for reporting to the FDA and a public licensing database for wholesale distributors is also expected to be established by January 2015. “With the future availability of these centralized databases, we may see organizations start to align on an industry solution rather than working individually with their trading partner networks as they do today,” says Wang.

“It will be interesting to see the approach states take towards 3PL and wholesale distributor licensing requirements. Federal licensing requirements will take effect two years after they are finalized for wholesalers, and one year for 3PLs, which should allow industry and organizations time to reassess the impacts to their processes,” Wang adds. “I think the immediate message is that there's not much time to go until January 1st. Be ready for the licensing and don't over-complicate things. Stay grounded to the processes that are currently in place, and make sure they are formalized. Beyond that, industry has to wait to see what happens once the upcoming deadlines arrive.”

Comments on the draft guidance will be accepted until December 07, 2014.