Patient and Product Security: It's the New Law

The editor-in-chief of Specialty Pharmacy Times discusses the requirements of the new national pharmaceutical serialization and track and trace program.

On November 27, 2013, President Barack Obama signed the Drug Quality and Security Act of 2013 (DQSA) into law, bringing a successful conclusion to efforts by the industry and consumer groups to create a national pharmaceutical serialization and track and trace regulation. This new law eliminated the patchwork of existing state laws and it also provided new regulations for compounding pharmacies. That’s big news for patient and product security.

This legislation has been decades in the making and is the most complex pharma track and trace law ever passed. Previously, our readers may be familiar with the Florida and California pedigree laws that were in various stages of implementation and enforcement. As a federal law, DQSA changes the rules for all of pharmacy, not just specialty pharmacy, and it’s important to pay attention. While the new law provides a modest reprieve for some stakeholders by allowing for extra time to serialize packaging lines, it actually moves up some deadlines and adds additional requirements.

DQSA also has many layers of complicated rules and regulations that will provide challenges for companies and pharmacies that will need to untangle them—and they need to do so quickly. While specialty pharmacy has often provided one of the most secure supply chains, this new law pertains to all pharmacies. But with the focus on product counterfeiting, high-cost specialty products have been the most frequent target of “bad guys.”

Pharmacy/Specialty Pharmacy Requirements

Here’s how the new law reads in part:

A dispenser [pharmacy] shall not accept ownership of a product, unless the previous owner prior to, or at the time of, the transaction, provides transaction history, transaction information, and a transaction statement.

Dispenser shall quarantine such product within the possession or control of the dispenser from product intended for distribution until such product is cleared or dispositioned; and promptly conduct an investigation in coordination with trading partners [manufacturer direct or through distributors], as applicable, to determine whether the product is an illegitimate product.

[Pharmacy shall conduct] an investigation verifying whether the lot number of a suspect product corresponds with the lot number for such product of at least 3 packages or 10% of such suspect product, whichever is greater, or all packages, if there are fewer than 3, corresponds with the product identifier for such product; validating any applicable transaction history and transaction information in the possession of the dispenser; and otherwise investigating to determine whether the product is an illegitimate product.

Beginning not later than January 1, 2015, the trading partners...may be only authorized trading partners and shall keep records of the investigation of an illegitimate product for not less than 6 years after the conclusion of the disposition. [Pharmacies] retain a sample of the product for further physical examination or laboratory analysis of the product by the manufacturer.

A dispenser may satisfy the requirements of this paragraph by developing a secure electronic database or utilizing a secure electronic database developed or operated by another entity such as your pharmacy software provider.

Any time any entity in the supply chain becomes suspicious that a drug might not be what it seems, a supply chain member or regulator can exercise a verification system to check the validity of the NDC, lot number after 2014, or serial number after 2017. By 2015, manufacturers and distributors must incorporate product transaction data into a single document that is available—either electronically or on paper—each time ownership is transferred. This document must include transaction data listing lot level information, a complete transaction history, and a transaction statement, and it must be maintained for 6 years after the transaction. Pharmacies will be obligated to report any suspicious activity upstream through the channel, and they will have 24 hours to respond to any request for verification.

DQSA will begin requiring unique serial numbers on every drug package throughout the US supply chain in late 2017. The law does not require the use of digital signatures or the protection of the contents of the transaction histories that must be passed from the seller to the buyer. Instead, the seller must provide a transaction statement that asserts that the history is accurate and has not been knowingly modified. Specialty pharmacies will ultimately be required to maintain transaction histories in their systems.

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Specialty Pharmacy Times will continue to monitor important trends in this space and periodically offer guidance. It behooves our readers—in industry, distribution, systems providers, and specialty pharmacy—to work collaboratively to assure compliance with this law. URAC-accredited specialty pharmacies have a bit of a head start, as patient tracking by lot number is an element of accreditation; however, they will be expected to add new policies and procedures and training for their staff to assure compliance with the new law and pending regulations.

Moving forward, the FDA will have primary jurisdiction. Time will tell what role the board of pharmacy will play. If these strategies deployed to curb the use of illicit products are successful, the supply chain will be more secure than ever.

Specialty Pharmacy Times will continue to provide updates and insights periodically on this landmark legislation.

Editor’s Note: Dan Steiber, RPh, gave a presentation on this topic at the recent National Association of Specialty Pharmacy 2014 Specialty Pharmacy Expo in Tampa, Florida, on “Supply Chain Security: A Look at Pending Laws and Regulations” with Barry McDonogh, vice president, business development, Systech International, and Jude McNamara, director of strategic sourcing, McKesson. SPT

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About the Author

Dan Steiber, RPh, is a principal of D2 Pharma Consulting LLC (d2rx.com) and is responsible for commercial operations, trade-supply chain strategy development including 3PL selection, regulatory oversight, and “operationalizing” organizations. Dan has served in several senior positions in pharmacy, distribution, and industry over the course of his 35-year career and is a licensed pharmacist in Texas, Washington, California, and Pennsylvania. He is affiliated with several professional associations and publications and is a frequent speaker on behalf of many professional organizations. Dan graduated from Washington State University College of Pharmacy and has participated in a variety of postgraduate programs in law and business development/marketing at Harvard University and Northwestern University. He currently resides in Highland Village, Texas.