The Drug Supply Chain Security Act (DSCSA), enacted in 2013, was envisioned as a 10-year plan to secure the U.S. pharmaceutical supply chain through enhanced track and trace systems and processes. Milestones have come and gone, 2023 isn’t that far off, and now everybody is talking about DSCSA authorized trading partners.
Why are DSCSA authorized trading partners on everyone’s mind? It’s because these supply chain stakeholders — manufacturers, wholesale distributors, repackagers, third-party logistics providers (3PLs), and dispensers — are pivotal to the regulatory rollout, which is scheduled to conclude on November 27, 2023. From here on out, the focus will be getting DSCSA authorized trading partners ready to comply with the regulations.
The U.S. Food and Drug Administration (FDA) has clarified the definitions of and guidance for DSCSA authorized trading partners, but we want to distill that further into an easy-to-understand explanation. In Part 1 of our “DSCSA 2023” series, we’ll take a look at manufacturers and wholesalers; Part 2 will talk about repackagers, 3PLs, and dispensers. In Part 3, we’ll break down the specific requirements for 2023.
DSCSA authorized trading partners: an overview
Under the DSCSA, authorized trading partners may engage in transactions only with other authorized trading partners. In other words, manufacturers, wholesale distributors, repackagers, 3PLs, and dispensers and their trading partners must all be authorized trading partners. If you are not a DSCSA authorized trading partner, your access to the U.S. pharma supply chain will be severely restricted or denied altogether.
Below, we explain how the DSCSA defines manufacturers and wholesale distributors.
To be considered a manufacturer, you must meet one of three criteria:
- You manufactured the product.
- You’re an approved application holder or a co-licensed partner of the approved application holder; if the latter, you must have obtained the product directly from the application holder or entity that manufactured the product.
- You’re an affiliate of the manufacturer and obtained the product directly from the application holder or entity that manufactured the product.
A manufacturer is considered a trading partner if it accepts or transfers direct ownership of a product from or to another manufacturer, a repackager, a wholesale distributor, or a dispenser. As defined in 1-3 above, a manufacturer is a DSCSA authorized trading partner if it:
- Is registered with the FDA in accordance with Section 510 of the Food, Drug, and Cosmetics Act, “§360. Registration of producers of drugs or devices”
- Is compliant with Section 510 of the FD&C Act
- Is compliant with Section 510 of the FD&C Act
To be considered a wholesale distributor, you must distribute a drug to a person other than a consumer or patient.
A wholesale distributor is considered a trading partner if it accepts or transfers direct ownership of a product from or to another wholesale distributor, a manufacturer, a repackager, or a dispenser. To be a DSCSA authorized trading partner, a wholesale distributor must have a valid license under state law or FD&C Act Section 583, “National Standards for Prescription Drug Wholesale Distributors,” in accordance with Section 582(a)(6), “Wholesale distributor licenses,” as amended by the DSCSA and in compliance with reporting requirements under Section 503(e), “Licensing and reporting requirements for wholesale distributors.”
Of note: manufacturers that distribute their own drugs are not required to meet licensure requirements for wholesale distributors. In fact, the FDA excluded several other entities from the definition:
- A manufacturer’s co-licensed partner
- A 3PL
- A repackager
- Entities excluded from “wholesale distribution” pursuant to Section 503(e)(4) — a dispenser, a dispenser-affiliated warehouse or distribution center, or a dispenser who transfers product to another dispenser for a specific patient need
However, “jobbers” are considered wholesale distributors. The FDA defines jobbers as those who do wholesale distribution on a small scale or sell products only to retailers and institutions. Dispensers that transfer product to another dispenser without a specific patient need are also jobbers — which means they’re also considered wholesale distributors.
If you follow our blog, you know we’ve been covering the DSCSA for a long, long time. We’ve hosted webinars, including the recent “Plan for DSCSA Readiness,” written white papers , and been active in industry initiatives, particularly the Verification Router Service (VRS), for which we led an FDA-approved pilot to extend testing of the system, and the Open Credentialing Initiative (OCI) to meet the requirements for DSCSA authorized trading partners.
So check back soon for Part 2 of our “DSCSA 2023” series, which will discuss repackagers, 3PLs, and dispensers. In the meantime, contact us if you have questions about the DSCSA. Our supply chain experts will be happy to speak with you and demonstrate how our solutions have made us the leader in pharmaceutical compliance.