FDA unveils new licensing standards for wholesalers, 3PLs

The FDA has issued a proposed rule on the standards for licensing wholesale drug distributors and third-party logistics (3PL) providers, as part of its guidance to allow implementation of the Drug Supply Chain Security Act (DSCSA) which is due to go into full effect on November 27, 2023.

The DSCSA was enacted to boost the FDA's ability to protect US patients by developing a connected, digital system to trace prescription drugs throughout the country and identify counterfeit, stolen or contaminated medicine before it reaches the hands of consumers.

The new standards "will provide greater assurance that these supply chain participants are sufficiently vetted and qualified to distribute products," according to the regulator.

The overall aim is to make sure that prescription drugs subject to the DSCSA are properly stored, handled, and transported, and to reduce the risk of drugs that may be counterfeit, stolen, contaminated, or otherwise harmful entering the supply chain.

Just last month, Gilead Sciences filed a lawsuit claiming that $250 million worth of counterfeit versions of its HIV drugs, Biktarvy and Descovy, were sold to US pharmacies over two years by unauthorised, fly-by-night distributors.

"These national standards will help diminish opportunities for dangerous and criminal conduct affecting the supply of prescription drugs in US," said the FDA. "Theft and diversion of prescription drugs continue to be major issues, contributing to drug shortages and creating significant financial losses, the effects of which cascade throughout the supply chain to consumers."

When finalised, the new standards will pre-empt the currently fragmented licensing requirements, producing a uniform licensing system across all 50 states. The proposals include the establishment of a process to allow FDA-approved third-party organisations to review a 3PL or wholesaler's qualifications for licensure.

"The standards for prescription drug wholesale distribution in the proposed rule would result in benefits to consumers and benefits to distributors from reducing the diversion of prescription drugs," according to the document.

"Other monetised benefits include cost savings from reducing the frequency and quantity of licensure applications and cost savings from reducing state licensing standards in some states," it goes on to say, estimating these at around $10 million per year.

Licensing could mean some additional costs for 3PLs and wholesalers, it acknowledges.

The move has been provisionally welcomed by the Healthcare Distribution Alliance (HDA), which represents wholesalers, although the organisations said it continuing to analyse the proposed standards.

"HDA is pleased that FDA has recognized the need for a uniform licensing framework across all 50 states and has reinforced the DSCSA’s elimination of the patchwork of state requirements that currently exists," said the trade body's chief executive Chip Davis.

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