It’s hard to believe, but the DSCSA’s two-year anniversary is just around the corner, and so is a significant milestone. FDA is mandated under the DSCSA to establish regulations for national wholesale distributor licensing standards no later than November 27, 2015. Since consulting a crystal ball is not an option, we have no other choice but to patiently wait a few more weeks or months to see what these standards will entail. Are they going to require trading partners to perform robust due diligence when engaging in transactions with non-manufacturer suppliers, or encourage the same type of willful blindness that spelled doom for the PDMA? Will they attempt to capture the essence of Lt. Frank Columbo’s “Just one more thing…” catchphrase, or encourage the “I see nothing!” attitude made famous by Sgt. Schultz of Hogan’s Heroes fame (I could not resist the old-school TV references here)? While these questions will soon be answered when FDA’s standards are released, taking a glimpse into the PDMA’s troubled 25-year history may predict which direction FDA will go and whether these standards will be a much-needed departure from the status quo.
First, a brief history lesson. In its June 2001 report to Congress on the PDMA, FDA stated the new law, signed by President Reagan in 1988, “was enacted to ensure that prescription drug products purchased by consumers would be safe and effective and to avoid an unacceptable risk that counterfeit, adulterated, misbranded, subpotent, or expired drugs were being sold to the American public.” FDA added, “Congress decided that legislation was necessary because there were insufficient safeguards in the prescription drug distribution system to prevent the introduction and retail sale of substandard, ineffective, or even counterfeit drugs and that a wholesale drug diversion submarket had developed that prevented effective control over, or even routine knowledge of, the true source of drugs.” Scarily, these statements are more relevant today than they were back in 1988.
In March 1994, FDA published a proposed rule implementing the PDMA and its pedigree provision and allowed until August 1994 for comments to be submitted to the agency. FDA’s final regulations were ultimately published five years later, in December 1999, and were set to take effect the following year, in December 2000. However, because FDA received a lot of comments from industry groups and even Congress about the impact of these regulations on secondary wholesale distributors, FDA announced the implementation date was going to be delayed again, this time until October 2001. FDA allowed for additional comments to be received and delayed the effective date of these regulations several more times, until December 2006. But before they could finally take effect, a December 2006 preliminary injunction was issued by the U.S District Court prohibiting FDA from implementing requirements that pedigrees go back to the original sale from the manufacturer and that they include information regarding lot numbers and container sizes. Nevertheless, the underlying federal requirement to provide pedigrees remained intact until the DSCSA’s product tracing provisions went into effect on January 1, 2015.
As you can see, FDA faced a lot of challenges attempting to implement the PDMA. Essentially, it was a 25-year long road to nowhere (sad, but true). The extent to which FDA’s struggles under the PDMA have created a chilling effect within the agency remains to be seen. For instance, if FDA’s impending national wholesale distributor licensing standards are viewed by some as too rigorous and costly on small businesses (i.e. secondary wholesalers), or inconsistent with Congressional intent, FDA may face similar challenges all over again. Is FDA willing to make a stand on due diligence if it means fighting PDMA-style battles for several years to come, or are they going to capitulate now and focus all their efforts on preparing to meet the interoperable electronic product tracing provisions of the DSCSA which take effect in November 2023? The way I see it, FDA may not have a choice. Maintaining the status quo for wholesale distributor licensing standards guarantees that future supply chain incidents will only increase in scope and frequency. The corresponding patient safety implications are frightening given the trajectory of prescription drug diversion evidenced by recent criminal cases involving corrupt secondary wholesale distributors.