On 11 June 2014, FDA announced the availability of a draft guidance titled “Drug Supply Chain Security Act Implementation: Identification of Suspect Product and Notification.”

This guidance is the first of many FDA is required to issue under the statutory mandates included in the Drug Quality and Security Act (DQSA).1 Title II of the DQSA — separately titled the Drug Supply Chain Security Act (DSCSA) — revamps the requirements for securing prescription drugs throughout the supply chain. Among those requirements are new obligations for manufacturers, distributors, and pharmacies regarding “suspect” and “illegitimate products.”2 By 1 January 2015, all parties in the supply chain must have systems in place to comply with these suspect product and illegitimate product requirements.3  The DSCSA imposes duties on the various trading partners to quarantine and investigate suspect products, to quarantine and dispose of the products determined to be illegitimate, and to notify certain trading partners and FDA of these actions.4 Specifically, beginning 1 January 2015, a trading partner who determines that a product in its possession or control is illegitimate must notify FDA and all immediate trading partners when that trading partner has reason to believe that another party in the supply chain may have received the illegitimate product. Moreover, this notice must occur no later than 24 hours after the determination. In addition, manufacturers have an additional duty, not imposed on other parties, to notify FDA and certain trading partners if they determine — or are notified by FDA or a trading partner — that there is a high risk that one of the manufacturer’s products is illegitimate.5

The DSCSA directs the secretary of the Department of Health and Human Services to issue within 180 days of enactment of the DSCSA, “a guidance document to aid trading partners in the identification of a suspect product and notification termination.”6 And, the DSCSA mandates that such guidance — to the extent that it sets forth the process for terminating notifications of illegitimate product — be in the rare form of binding guidance.7 FDA’s recent guidance responds to these statutory mandates.

Identification of suspect product

The draft guidance identifies specific scenarios that could significantly increase the risk of a “suspect product” entering the pharmaceutical distribution supply chain. For transactions involving such scenarios, the draft guidance recommends that trading partners be particularly diligent. These scenarios include, but are not limited to, the following:

  • purchasing from a source new to the trading partner
  • receiving an unsolicited sales offer from an unknown source or purchasing on the Internet from an unknown source 
  • purchasing from a source that a trading partner knows or has reason to believe has transacted business involving suspect products (e.g., a trading partner that has been involved in business transactions where it sold or delivered suspect or illegitimate product)
  • product that is generally in high demand, including demand resulting from its value in an emergency and/or that has been previously or is currently the subject of a drug shortage, or product that has high sales volume or price
  • product that has been previously or is currently being counterfeited or diverted (e.g., HIV, antipsychotic, or cancer drugs), or the subject of an illegitimate product notification under the DSCSA or other quality-related alert or announcement, such as an FDA counterfeit or cargo theft alert 
  • appearance of a package or container used for transport that seems suspicious, e.g., it has a label that contains misspellings or appears different from the product’s standard label 
  • a package that is missing information (e.g., the lot number or other lot identification or expiration date), or missing anti-counterfeiting technologies normally featured on FDA-approved product (e.g., watermarks)

Additionally, FDA provides recommendations on how trading partners can identify suspect product. For example, the agency cautions trading partners about offers of product for sale at a very low price or ones that are “too good to be true.” The agency also suggests closely examining the package, transport container, and labeling to look for, among other things, missing information (e.g., product inserts or lot codes), misspelled words, signs that the product has been compromised, or any indication the product has been altered, e.g., “smudged print or print that is difficult to read.”

Process for notification of illegitimate product

Finally, the agency sets forth the process by which trading partners should notify FDA of illegitimate product and how they must terminate the notifications. The draft guidance also includes a web-accessible form for initiating or terminating notifications, Form FDA 3911. The form calls for trading partners to provide information about the person or entity initiating or terminating the notification and information about the product. If initiating a notification, trading partners are to provide a description of the circumstances surrounding the event that prompted the notification. If terminating a notification, trading partners must provide the notification itself and an explanation about what actions have taken place or what information has become available that make the notification no longer necessary.

A trading partner must wait until FDA responds to the termination request before the trading partner notifies other trading partners that a notification is terminated. The agency stated that it intends to respond to requests for termination within 10 business days of submission. After FDA provides its response, and the trading partner determines that the notification is no longer necessary, the trading partner who made the request for termination must promptly notify immediate trading partners that the notification has been terminated.

A few take-aways

The draft guidance does not address certain ambiguities in the DSCSA that may be important to assess the obligations discussed in this draft guidance. For example, only manufacturers have notification obligations regarding products that are at “high risk” of being illegitimate. Thus, it is important to know exactly who is a “manufacturer” for any given transaction. Several uncertainties surround the interpretation of that term. Similarly, some ambiguity exists about which parties in certain transactions qualify as “trading partners” to whom notice must be given. In addition, the obligation to investigate suspect products may require parties with responsibility for affixing product identifiers and storing such records to check those records against those on the suspect product. Open questions exist about which parties bear these responsibilities.

The agency requests comments by 11 August 2014. Whether the guidance will be finalized before the first implementation date in January remains to be seen, and we emphasize that final guidance may not issue in time to allow affected companies to put systems in place necessary to comply with these and other DSCSA obligations.