FDA’s DSCSA exemption is the right move

FDA’s DSCSA supply chain exemption is the right move

True to FDA’s mission, the new DSCSA exemption protects public health.

FDA gave drug supply chain stakeholders a bit more time to stabilize electronic connections with their trading partners as they implement the last stage of the Drug Supply Chain Security Act (DSCSA). With this move, FDA helped avert significant supply chain disruptions and delays in patient access to important medicines.

The DSCSA was passed in 2013, creating a stepwise approach to further secure our nation’s drug supply from counterfeit and other illegitimate drugs. The early stages of the law required paper or electronic tracing of drugs through the supply chain based on the lot number of the product. The final stage of the law requires implementation of secure, electronic exchange of information for tracing of each drug package with its own unique serial number as it moves through the supply chain. This is more complex because every trading partner must ensure that their data system can talk to their trading partner’s system and exchange data that matches the products and their serial numbers.

Without stable electronic connections between trading partners, the data about the product packages may not be complete and accurate, legally barring the buyer from accepting ownership of the product. If this happens, the buyer either has to quarantine the product and reconcile the data or refuse to accept the product and return to sender. This could create disruptions in drug availability, which ultimately will be felt by the patient at the pharmacy counter if they cannot get their needed prescription.

The supply chain was not ready last November, the statutory deadline, so FDA granted a year-long “stabilization period,” until November 27, 2024, to allow trading partners to stabilize their connections. FDA was serious when they said… “this is it” and at that time they did not plan on giving any further extensions.

More time truly was needed to stabilize connections

By mid-summer, concerns were bubbling up from manufacturers, wholesalers, and dispensers that they needed more time. The stabilization period was helpful to get most of the way there but, given the massive amount of prescription drugs moving through the supply chain each day, problems with even one percent of the daily transactions could create widespread disruptions.

FDA listened. They took these concerns seriously and did their due diligence. In July, FDA gave small dispensers two years to comply. FDA continued to listen. They attended and held meetings with stakeholders to hear the concerns, challenges, and efforts to comply.

FDA’s new exemption is measured and targeted. Manufacturers, wholesalers, and dispensers are only eligible for an exemption if they have taken steps to comply and have systems, processes, and connections with their trading partners. This gives them time to stabilize systems and troubleshoot issues of missing or erroneous data. Manufacturers have until May 27, 2025, wholesalers have until August 27, 2025, and dispensers with 26 or more full-time employees have until November 27, 2025. There’s no free pass if you were procrastinating and not making an effort. Also, by staggering the exemption period, the supply chain can follow the data and focus efforts in a downstream manner, stabilizing connections from manufacturer to wholesaler, then wholesaler to dispenser.

I know that many in the drug supply chain are celebrating right now, but don’t celebrate too long. As FDA said in their notice announcing the time-limited exemptions, “this should not be viewed as an excuse to delay implementation.” This is the supply chain’s last chance. If your trading partner is not ready and is not willing to work with you, then you should seriously consider finding a different supplier.

Yes, I’m a little biased, but credit is due to FDA

Some say DSCSA is a complicated law to understand and implement. It’s not, but I have a special fondness for the law and want to see implementation succeed. I was on the team at FDA in the early 2000’s calling for a drug track and trace system in the U.S., after counterfeit drugs were found in the drug supply. I helped lead FDA’s team working with Congress to pass DSCSA. I then led FDA’s implementation efforts until I retired from the agency in late 2019, continuing to advocate for responsible and practical implementation from the private sector. I’m a DSCSA cheerleader, shouting for implementation to get over the goal line.

I am excited to see this so close to the end and appreciate FDA’s recognition that extra time is needed to get it right and avoid disruptions. Rarely do government officials get public kudos, but in this case, patients, supply chain trading partners, and public health should be waving their DSCSA pom poms with thanks. FDA DSCSA team, thank you.

Ilisa Bernstein

President, Bernstein Rx Solutions, LLC