In June, the U.S. House of Representatives passed1 a bipartisan bill that would amend the Federal Food, Drug, and Cosmetic Act to create a national system for tracking prescription drugs throughout the supply chain. The bill, sponsored by Rep. Bob Latta (R-OH), and entitled Safeguarding America’s Pharmaceutical Act of 2013 (H.R. 1919),2 aims to eliminate counterfeit drugs and inconsistent state regulations that disrupt commerce in this vital industry.3

The bill would establish lot-level tracing requirements for prescription drug product manufacturers, wholesale distributors, dispensers, repackagers, and third-party logistics providers based on changes in ownership. This would include, among other things, requiring manufacturers, wholesale distributors, dispensers, and repackagers to:

  • Ensure that each individual unit and case of a prescription drug product has a standardized graphic that includes a set of numbers or characters used to uniquely identify each package or case, lot number, and expiration date. A drug would be considered “misbranded” if it lacked these numbers or characters.
  • Conduct certain verification procedures and investigation activities for prescription drug products where there is reason to believe they are counterfeit, diverted, stolen, or would cause serious adverse health consequences.4 If it is confirmed that any of these conditions have occurred, the prescription drug product must be quarantined. Under both scenarios, the FDA must be notified.

Further, manufacturers, wholesale distributors, and repackagers must provide a subsequent owner with transaction information and a statement authorizing the transaction by the time of a transfer of ownership of a prescription drug product. Wholesale distributors, dispensers, and repackagers are prohibited from accepting ownership of a prescription drug product if the previous owner did not provide this information. All of the above requirements are subject to certain exceptions for wholesalers, distributors or repackagers that do not physically handle, distribute, or store the prescription drug products.

The bill would also oblige manufacturers, wholesale distributors, dispensers, repackagers, and third-party logistics providers to transfer ownership or possession of the prescription drug products only to FDAregistered manufacturers or licensed wholesale distributors, third-party logistics providers, and dispensers.

Under the bill,

  • FDA would establish pilot projects and hold biannual public meetings to explore methods to improve the drug distribution supply chain security. By 2027, FDA would be required to issue proposed regulations that establish additional requirements to bar counterfeit, stolen, diverted, or prescriptions drugs otherwise unfit for distribution from the supply chain.
  • States would continue to license and collect fees from wholesale distributors and third-party logistics providers, but FDA would be authorized to issue national licensing standards. The bill would also require annual reports from wholesale distributors and third-party logistics providers to FDA that identify the states in which they are licensed and any disciplinary actions against them.
  • FDA would be permitted to charge a user fee from third party logistics providers. If the third-party logistics provider distributes the drug in a state that lacks a licensing third-party logistics provider program, the provider must be licensed by FDA.
  • Federal law would preempt state laws, including the California E-pedigree law, on tracing drugs through the distribution system and standards for wholesale drug distributors and third-party logistics providers. Nonetheless, states would still be able to collect fees from them.

The bill was received in the Senate on June 4th and referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee.5 If passed in its present form, most provisions of the bill would go into effect by 2015, though manufacturers would not be required to affix or imprint product identifiers on the drug for five years from the bill’s enactment.

Also before the Senate HELP Committee is a largely similar bill that would establish a prescription drug tracking system, entitled the Drug Supply Chain Security Act (S. 957). The bill was introduced in May by Senator Michael Bennet (D-CO), and co-sponsored by Senators Tom Harkin (D-IA), Lamar Alexander (R-TN), Richard Burr (R-NC), and Johnny Isakson (R-GA).6 Although no mark-up has been scheduled, the bill is likely to see movement as both the Chairman and Ranking Member of the Senate HELP Committee are both cosponsors of the bill and the other co-sponsors of the bill demonstrate strong bipartisan support within the Senate HELP Committee.

The text of the Senate bill is available here.7