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  6. FDA announces proposed rule: National Standards for the Licensure of Wholesale Drug Distributors and Third-Party Logistics Providers
  1. Drug Supply Chain Security Act (DSCSA)

FDA announces proposed rule: National Standards for the Licensure of Wholesale Drug Distributors and Third-Party Logistics Providers

On May 24, 2022, FDA extended the comment period for the proposed rule, National Standards for the Licensure of Wholesale Drug Distributors and Third-Party Logistics Providers to September 6, 2022. This extension will allow interested stakeholders additional time to submit comments.

On February 4, 2022, FDA announced the availability of the proposed rule National Standards for the Licensure of Wholesale Drug Distributors and Third-Party Logistics Providers (Docket No. FDA-2020-N-1663) as required by the Drug Supply Chain Security Act (DSCSA). The proposed rule, when finalized, would provide greater assurance that supply chain participants are sufficiently vetted and qualified to distribute prescription drugs, further strengthening the supply chain.

On April 13, 2022, FDA posted a webinar on this proposed rule in order to help stakeholders submit comments and understand the proposed changes.

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Requirements for wholesale drug distributors currently vary significantly across state lines creating a patchwork system. In passing DSCSA, Congress believed a uniform national standard would address this issue. This proposed rule would provide clarity and consistency for wholesale distributors and third-party logistics providers seeking licensure. When final and effective, every U.S. wholesale distributor and third-party logistics facility will be held to these standards. Only those licensed according to the proposed national standards would be able to engage in transactions related to the sale and distribution of certain prescription drugs with other members of the supply chain. Where a state does not have a licensing program in accordance with the regulation, FDA would be the licensing authority.

National standards will help diminish opportunities for dangerous and criminal conduct affecting the supply of prescription drugs in the United States. Theft and diversion of prescription drugs are public health issues that can lead to patient harm. Unlicensed wholesale distributors are often involved in incidents of distributed stolen or counterfeit drugs.

Proposed Provisions

FDA is proposing to replace the current 21 Code of Federal Regulations, Part 205 which provides guidelines for state licensing of wholesale prescription drug distributors. The new Part 205, when finalized, will implement the licensure requirements of the DSCSA and provide oversight of licensure of third-party logistics providers and wholesale distributors.

Provisions for wholesale distributors and third-party logistics providers specifically include:

  • Licensure application requirements.
  • Procedures surrounding pre-licensure inspection as well as denial, revocation, and suspension of licenses.
  • Establishment of standards for the storage and handling of prescription drugs, including facility requirements and security, inventory management, and equipment maintenance.
  • Personnel requirements and qualifications.
  • Recordkeeping and document maintenance requirements.
  • Requirements for written policies and procedures.

A key provision in the proposed rule preamble includes FDA’s revised preemption interpretation of section 585(b)(1) that would apply to state and local licensure standards, requirements, and regulations. Once the proposed rule is finalized and effective, under this interpretation, states and local governments may not establish or continue licensure requirements for third party logistics providers or wholesale drug distributors unless those state requirements are the same as federal requirements. FDA also provides standards applicable to, and the requirements for approval of, third-party organizations involved in the licensure and inspection process.

In connection with the rulemaking, FDA is issuing clarifying amendments to 21 CFR 203 for consistency with DSCSA and the proposed 21 CFR 205 rule; updating and finalizing a preemption-related guidance; and withdrawing a 2011 notice of proposed rulemaking (NPRM) that was never finalized.

Development of Proposed Rule

To create the proposed standards, FDA considered various stakeholder input and conducted a comprehensive review of existing state standards for licensure including storing, handling, and holding prescription drugs. FDA also considered other nationally recognized standards and model rules for wholesale distribution and logistics, including those created by the National Association of Boards of Pharmacy, Healthcare Distribution Alliance, World Health Organization, and the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme. FDA believes the proposed standards align with existing practices and will help ensure third party logistics and wholesale distribution activities are undertaken in a manner that minimizes threats to the regulated supply chain from illegitimate products.

This proposal is one of the critical pieces of DSCSA implementation. FDA is committed to implementing national licensure standards to increase supply chain security for prescription drugs. FDA looks forward to engaging with stakeholders on the proposed changes.

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