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DQSA would replace the patchwork

In the fall of 2013, the U.S. House of Representatives passed the Drug Quality and Security Act (DQSA), a bill that would regulate compounding pharmacies and would impose a phased-in nationwide serialization and e-pedigree regulation.

On October 18, 2013, the Senate passed it without amendment, and it was subsequently signed into law by President Obama. 

The track-and-trace provisions, themselves known as The Drug Supply Chain Security Act within the DQSA, were refined through a 20+ month process of negotiations among the members of the Pharmaceutical Distribution Security Alliance (PDSA). This is an industry lobbying group with representation from the following groups:

PhRMA = Pharmaceutical Research and Manufacturers of America (the big brand manufacturers)
HDMA = Healthcare Distribution Management Association (the big wholesalers)
HIDA = Health Industry Distributors Association (the smaller wholesalers)
BIO = Biotechnology Industry Association (biotech manufacturers)
GPhA = Generic Pharmaceutical Association

Other participants in the negotiations included a number of the largest companies in the U.S. pharmaceutical supply chain, as well as key members of Congress and their staffs. The proposed legislation underwent multiple iterations culminating in Title II of the DQSA bill.

John M. Gray, President and CEO of the HDMA, proclaimed the successful passage of the DQSA to be one of the most significant accomplishments of HDMA dating back to its founding in 1876.

What will it mean?

Several things happened right away. First and foremost, all current state and federal serialization and pedigree laws were preempted. That is, they become inoperative—replaced nationwide by the DQSA. The importance of this one effect cannot be overstated. This was the number one aim of the PDSA, and it is what kept the organization together when competing interests sometimes threatened dissolution. Preemption resulted in the elimination of the frequently discussed “patchwork” of U.S. drug pedigree laws in one fell swoop. The patchwork was replaced with a single approach to supply chain security as outlined in Title II of the DQSA.

Second, the clock will begin ticking on many specific and detailed new U.S. Food and Drug Administration (FDA) requirements for manufacturers, wholesale distributors and organizations, and individuals who dispense drugs. Congress will also direct the FDA to take specific actions, like developing national standards for wholesale distributors and third-party logistics providers, publishing an extensive list of draft and final guidances, and conducting at least one industry pilot—all over a 10 year period. 

The following is just a partial list of the timed requirements for U.S. pharma supply chain trading partners:

WITHIN ONE YEAR OF ENACTMENT

• FDA will have to publish standards for the interoperable exchange of transaction information, history, and statements in paper or electronic form.
BEGINNING ON JANUARY 1, 2015
• Companies in the supply chain will only be allowed to do business with trading partners that hold a valid state or federal license;
• Companies will need to begin following the FDA’s guidance in providing their customers with transaction information, transaction histories, and transaction statements in either paper or electronic form and keep these records for six years. 
• Drugs must be identified within the transaction information by lot number and quantity, not by serial numbers (serial numbers would not be required yet). Wholesale distributors that buy drugs directly from the manufacturer or exclusive distributor will not be required to include lot numbers, the initial transaction date, or the initial shipment date from the manufacturer. Also, the transaction information, history, and statement they provide to their customers could be any combination of self-generated paper or electronic documents, or manufacturer provided information on the product packages themselves.
• Drug manufacturers and repackagers will be required to have a system in place that would allow them to respond to verification requests for suspect product. All supply chain members need to have systems in place to properly quarantine and disposition drugs that are found to be suspect by the FDA, themselves, or by a trading partner. Given the short lead time, it is likely that these “systems” would initially be a series of specific business processes defined within standard operating procedures (SoPs).

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