CEU 3. Drug Supply Chain Security Act (DSCSA) - Kala Shankle-converted

Supply Chain Concerns Update
for Long Term Care Pharmacies

Presented at the
Integra User Conference

June 4, 2019

The strength of our numbers

NCPA represents the interests of America's community
pharmacists, including the owners of more than 22,000
independent community pharmacies. Almost half of all
community pharmacies provide long-term care services

and play a critical role in ensuring patients have
immediate access to medications in both community
and long-term care settings. Together they represent an
$76 billion healthcare marketplace, employ 250,000
individuals, and provide pharmacy services to millions

of patients every day.

What differentiates our members

As community-based healthcare professionals
and entrepreneurs, independent pharmacists are

uniquely positioned to customize solutions
to healthcare challenges affecting
local communities and employers.

Objectives

• Identify the current atmosphere regarding supply
chain concerns relevant to LTC pharmacies;

• Describe current and future requirements under the
DSCSA for LTC pharmacies;

• Explain recent changes to the EPA’s disposal rules for
hazardous waste pharmaceuticals for LTC
pharmacies;

• Discuss broad solutions on the market that may help
your LTC pharmacy with supply chain concerns.

NCPA’s LTC Division: Goals

• NCPA’s LTC Division seeks to:

• Ensure CMS recognition of
medical-at-home

• Frame payment rate at ALF
• Keep DIR fees out of LTC
• Appropriately define mail

order pharmacy

NCPA’s LTC Division: Past Wins

• 2019: Influenced EPA to exempt Assisted Living Facilities from the
LTC facilities definition in their final rule on hazardous waste

• 2017-2018: Secured changes in H.R.6 - SUPPORT for Patients and
Communities Act including ensuring that patient choice of
pharmacy is respected and exempting LTC facilities from electronic
prescribing for controlled substances

• 2015-2016: Influenced FDA to allow traditional compounding
pharmacies to continue to repackage non-sterile drug products for
use in LTC facilities

• PRIOR to 2013: Banned proration of dispensing fees on “short-
cycle” prescriptions for LTC pharmacies

NCPA’s LTC Division: Our Priorities

• Advocacy on CMS and PBM reimbursement issues
• Appropriately defining LTC pharmacy
• LTC patient access in regards to opioid crisis
• Access to specialty medications
• Role of LTC pharmacists in chronic care management
• Monitoring LTC short cycle fill requirement
• Evaluating transitions of care in transforming the pharmacy

payment model

Supply Chain Concerns for Community
and LTC Independent Pharmacies on the

Horizon…

The Drug Supply Chain Security Act: History

• Brief History
• Phase I requirements

▪ Overview
▪ Exceptions
▪ Questions to ask

• Phase II requirements

▪ Overview
▪ Questions to ask

DSCSA: History

• Pedigree laws: California’s “e-pedigree”

▪ Real-time, interoperable tracking system
▪ Scanners
▪ Too much data, super expensive (estimated $100k per individual

pharmacy in the first year)

• Enter the Drug Quality and Security Act (2013)

▪ Title I: Compounding
▪ Title II: The Drug Supply Chain Security Act (DSCSA)

• DSCSA preempts state pedigree laws

▪ Stop talking about pedigree laws…

DSCSA: Goals

• FDA, Center for Drug Evaluation and Research
• Implement an interoperable, electronic tracing of products

at the package level by 2023:

▪ Facilitate electronic exchange of transaction information for each
sale of prescription drugs

▪ Use product identifiers to verify product at the package level
▪ Enable prompt response to suspect and illegitimate products when

found
▪ Improve efficiency of recalls

• Establish national standards for licensure for wholesale
distributors and third-party logistics providers

DSCSA: Implementation Timeline

DSCSA: Dates You Should Know…

• Nov. 27, 2018: Serialized product now
coming from manufacturers
• Nov. 27, 2019: Verification of saleable
returns
• Nov. 27, 2020: Pharmacies can only accept
serialized product

Defined Terms: Products

• Section 581 – Definitions
• Products: Prescription drug in finished dosage form for administration to a

patient without further manufacturing (such as capsules, tablets, lyophilized
products before reconstitution)

• Not products: OTC, medical devices, API, or drugs indicated for animal use

• Blood and blood components intended for transfusion
• Radioactive drugs and radioactive biologics
• Imaging drugs
• Intravenous products
• Medical gases
• Homeopathic drugs
• Compounded drugs

Defined Terms: Transaction & Traceability

• Transaction = product that changes ownership
• Traceability requirements apply to transactions
• Traceability requirements (section 582):

▪ Transaction information (TI): Includes the name of the product; strength
and dosage form; NDC; container size; name and address of the seller and
the purchaser; and other DSCSA specified information

▪ Transaction history (TH): Paper or electronic statement that includes the
transaction information for each prior transaction back to the
manufacturer

▪ Transaction statement (TS): Paper or electronic attestation by the entity
transferring ownership of the product that it is authorized under the Act;
received the product from an authorized party; and other DSCSA specified
information

Defined Terms: Exceptions

• Specific patient need: Transfer of a product from one pharmacy to

another (regardless of whether the two pharmacies are affiliated in
any way) to fill a prescription for an identified patient.

• Office use: Distribution of minimal quantities of products by a

licensed retail pharmacy to a licensed practitioner for office use

• Mergers: Distribution of a product pursuant to a sale or merger of a

pharmacy or wholesaler

• Combo products: Distribution of combination products (device +

drug/device/biologic)

• Emergencies: Distribution for emergency medical reasons

Defined Terms: Specific Patient Need

• Specific patient need: Transfer of a product from one pharmacy to

another (regardless of whether the two pharmacies are affiliated in
any way) to fill a prescription for an identified patient

• If your transaction falls into this category, you have no product
tracing requirements

• If not, you may need to register as a wholesale distributor

• FDA guidance:

• August 2017: Identifying Trading Partners Under the Drug Supply
Chain Security Act, Guidance for Industry

• March 2018: Standardization of Data and Documentation Practices
for Product Tracing Guidance for Industry

• Questions to ask yourself and industry

Defined Terms: Authorized Trading Partners

• Wholesale distributor: Has a valid license under state law or

section 583, in accordance with section 582(a)(6), and complying
with the licensure reporting requirements under section 503(e)

• Third-party logistics provider: Having a valid license under state

law or section 584(a)(1), in accordance with section 582(a)(7), and
complying with the licensure reporting requirements under section
584(b)

• Dispenser: Has a valid license under state law
• Check out the FDA’s database to check who is an ATP

▪ https://www.accessdata.fda.gov/scripts/cder/wdd3plreporting/ind
ex.cfm

What’s On the Line?

• Failure to comply with a DSCSA requirement is a “prohibited
act”

• Commission of a prohibited act subjects a party to:

▪ Injunction of unlawful activity
▪ Seizure of goods
▪ Civil and criminal fines and penalties (including jail)

Phase I Requirements

• Product tracing: Phased approach requiring manufacturers,

wholesale distributors, dispensers and repackagers to pass, capture,
and maintain certain information with respect to each transaction

• Trading partners must:

• Receive and capture TI/TH/TS
• Provide TI/TH/TS (as applicable…not when dispensing)

▪ Standards for product tracing and data exchange (currently paper or
electronic is ok)

▪ FDA guidance:

▪ November 2015: DSCSA Implementation: Product Tracing Requirements for
Dispensers – Compliance Policy Guidance for Industry (Revised)

▪ March 2018: Standardization of Data and Documentation Practices for Product
Tracing Guidance for Industry

▪ This will all likely change by 2023 when product tracing is down to a serial
number

Phase I: Continued

• Store 6 years of records (“maintain the transaction data”)

▪ Third Party Agreement

• Respond to information request
• Return product to trading partner

Can’t We Just Rely on Our Wholesalers?

• It depends…
▪ “Maintain the transaction data:”

o Not a wholesaler requirement, web-portal
o Access vs. storage
o Dispensers must keep certain DSCSA specified records for “not

less than 6 years”

▪ Information and verification requests:

o Suspect and illegitimate product
o Dispensers have 2 business days to respond to FDA or other

gov’t info requests

Questions to Ask Your Wholesalers Right
Now…

• Ask both primary and secondary wholesalers about their
capabilities to assist pharmacies:

▪ Are you helping me receive, provide, respond, store, and return
under the law?

▪ What does my contract cover?
▪ What are the caveats in my contract?
▪ Who owns the T’s?
▪ If I move wholesalers, how will I transfer my data? What form will I

get my data?

Questions Continued…

▪ How will my distributor provide the data (e.g., in a portal, on
paper, as an ASN)?

▪ Will my distributor “hold” the data for my pharmacy/healthcare
facility/business? And for how long?

▪ What data will be provided for which products?
▪ How will I know if the data is correct?
▪ Wholesalers aren’t your attorneys…

• Ask your current technology vendors about their capabilities
to assist pharmacies:

• Are you helping me receive, provide, respond, store, and return
under the law?

• Are there any solutions out there I can use if my wholesaler is not
helping me with certain transactions?

Phase I Requirements: Serialization

• 2017-2018: Product identification (serialization) stage
• Manufacturers and repackagers putting on products right

now
• FDA guidance from November 2017:

▪ Grandfathering Policy for Packages and Homogenous Cases of
Product Without a Product Identifier Guidance for Industry

• What does this mean for community pharmacies right now
and for the future?

Phase I Requirements: Grandfathered
Products

Phase I Requirements: Verification Requests

• Pharmacists must institute a process to deal with suspicious
or defective products

• Suspect Product: Dispenser has reason to believe:

• Potentially counterfeit, diverted, stolen
• Subject to fraudulent transaction
• Intentionally adulated or appears otherwise unfit for distribution

such that would result in serious adverse health consequences or
death to humans

Verification Requests: Illegitimate Product

• Illegitimate product: Dispenser has credible evidence that shows:

• Product is counterfeit, diverted, stolen
• Subject of fraudulent transaction
• Intentionally adulterated or appears otherwise unfit for

distribution such that would result in serious adverse health
consequences or death to humans

• FDA examples: Altered product, missing info on label, looks different

than product on shelf, no “Rx only” symbol, bubbling on the label,
foreign language, lot numbers or expiration dates do not match the
outer/inner container, missing or wrong package insert, damaged or
broken seal, open package, different product name than FDA approved
version

Verification Requirements: Continued

• Quarantine and investigate the product
• Investigation: Validate TI and TH, by 2020 must verify lot number and

product identifier

• Notification: If product is illegitimate, notify FDA and trading partners

within 24 hours
• FDA form 3911 (only for illegitimate product)

• Respond: Work with manufacturer to take steps to prevent product from

reaching patients

• Store: Store investigation records for 6 years

Verification Requirements: FDA-3911

• Requirements:
• Dispensers and other trading
partners must notify FDA of
illegitimate products within 24
hours of determination
• If product is determined to be
legitimate, then traders must
notify FDA

Verification Requirements: Continued

• FDA guidance:

• December 2016: Drug Supply Chain Security Act Implementation:
Identification of Suspect Product and Notification Guidance for
Industry

• March 2018: Definitions of Suspect Product and Illegitimate
Product for Verification Obligations Under the Drug Supply Chain
Security Act Guidance for Industry

• Questions:

• Does the pharmacy have systems/internal controls/SOPs in place
to do this right now?

• How do you communicate with manufacturers? Does my
wholesaler/solutions provider help me?

• Are there solutions on the market that can help me do a
verification request?

FDA Enforcement of Phase I

• FDA sends warning letter to trading partner for violations of
the track and trace law, first of its kind

• The letter alleges that the distributor sent missing and
wrong pills to multiple pharmacies

• The shipments were originally supposed to be for opioids.
• This warning letter is an important milestone for the supply

chain because it serves as a warning to the industry that all
U.S. trading partners, including pharmacies, should ensure
they are adhering to their responsibilities under the DSCSA
• NCPA Pharmacy Checklist on DSCSA available

Phase II Requirements

• All about serialization: NDC, serial number, lot number, expiration

date

• 2018: Manufacturers/repackagers must affix a product identifier to each

individual package and homogenous case

• 2019: Wholesale distributors must only accept products that contain the

required product identifier; and verify product identifier before
redistributing returned products

• 2020: Dispensers must only accept products that contain the required

product identifier
▪ And also can only buy/sell products that are serialized

• 2023: Unit level traceability

▪ Excluded products, grandfathered, waiver or exempt

Questions Continued…

• Are you working on providing my pharmacy with tech to
read a 2D data matrix?

• Can the software integrate with other pharmacy software?
Is there a value-add beyond DSCSA compliance?

• Does this tech work in conjunction with all my wholesalers
and other systems that are holding my tracing information?

• Will this tech be updated as industry changes? Will this cost
me more?

• What data standards does your technology solution
support? Which are not compatible?

Questions Continued…

• How will the technology vendor ensure my data is secure?
What happens if there is a breach? Is my data backed-up?
• Does the vendor have access to master data?
• What support services does the vendor provide to the
pharmacy? Can the vendor be reached 24/7? Via phone,
email etc.?
• How are vendors identifying grandfathered product,
exempt/excepted/waived products?
• Continue to ask the same questions from Phase I

Takeaways

• FDA’s small business study after 2023 implementation
• Ask lots of questions to your wholesalers and solutions

providers

▪ Get solid answers and be proactive

• If you choose to use a solutions provider, make sure you’re
not buying snake oil

• If you have not already done so, implement verification
request procedures for your business

• Pay attention and talk to the FDA and reach out to NCPA if
you have any concerns

Helpful Resources

• FDA’s “Utilize DSCSA requirements to protect your patients”
presentation:

▪ https://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyCh
ainSecurity/DrugSupplyChainSecurityAct/ucm606945.htm

• FDA guidances:

▪ https://www.fda.gov/Drugs/DrugSafety/DrugIntegrityandSupplyCh
ainSecurity/DrugSupplyChainSecurityAct/ucm424963.htm

EPA’s Final Rule on Management Standards for
Hazardous Waste Pharmaceuticals: History

• 2015: Proposed Rule
• August 2018:

• NCPA presented the small business perspective to the
Environmental Protection Agency (EPA) and the Office of
Management and Budget (OMB)

• Early 2019: Final Rule

• NCPA successfully secured the exclusion of Assisted Living Facilities
(ALFs) from the Long Term Care Facility definition, effectively
exempting ALFs from many provisions in the Final Rule

• Final Rule goes into effect Aug. 2019

EPA Final Rule: Checklist

• Pharmacies must now make the determination at the store
level on whether a hazardous waste pharmaceutical is
potentially creditable or non-creditable before sending the
pharmaceutical to a reverse distributor

• If a hazardous waste pharmaceutical is potentially
creditable, it may be sent to a reverse distributor

• A pharmacy who sends potentially creditable hazardous waste
pharmaceuticals to a reverse distributor must comply with all
applicable U.S. Department of Transportation regulations in 49
C.F.R. §§ 171-180 for any potentially creditable hazardous waste
pharmaceutical that meets the definition of hazardous material in
49 C.F.R. § 171.8

EPA Final Rule: Checklist Continued

• If a hazardous waste pharmaceutical is non-creditable, it
must be disposed of via a designated disposal facility

• Shipping non-creditable hazardous waste pharmaceuticals to a
designated facility (not a reverse distributor) must follow very
specific requirements, including packaging, labeling, and marking
outlined in the Final Rule

• Pharmacies are prohibited from disposing of hazardous
waste pharmaceuticals to a sewer system that passes
through to publicly-owned treatment works

EPA Final Rule: Prohibition on Sewering

• All healthcare facilities (including pharmacies) and reverse
distributors are prohibited from discharging hazardous
waste pharmaceuticals to a sewer system that passes
through to publicly-owned treatment works

• Huge focus of the Final Rule

EPA Final Rule: OTC Products

• The final rule distinguishes between OTC and prescription drugs when
determining which products are to be considered solid wastes at a
pharmacy and thus, would be subject to EPA’s streamlined regulations
in the Final Rule

• OTC products (including expired OTC products) are not considered
solid wastes at the pharmacy and can be sent to a reverse distributor
as long as the pharmacy has a reasonable expectation that the OTC
product could be legitimately used, reused, or reclaimed

• However, if the OTC product does not fall under this expectation and
the product is a hazardous waste pharmaceutical, then the OTC
product is considered a solid waste and the pharmacy must follow
EPA’s streamlined regulations for handling the waste in the Final Rule

EPA Final Rule: Prescription Drugs and
Potentially Creditable Hazardous Waste

• The EPA makes clear that a pharmacy must make the potentially
creditable and non-creditable distinction at the pharmacy store level

• Under the final rule, the EPA states a potentially creditable hazardous
waste pharmaceutical means a prescription hazardous waste
pharmaceutical that has a reasonable expectation to receive
manufacturer credit and is (1) in original manufacturer’s packaging
(except pharmaceuticals that were subject to recall); (2) undispensed;
and (3) unexpired or less than one year past expiration date. Again, if
a hazardous waste pharmaceutical is potentially creditable, it may be
sent to a reverse distributor

EPA Final Rule: Shipping Potentially Creditable
Hazardous Waste Pharmaceuticals

• A pharmacy who sends potentially creditable hazardous waste
pharmaceuticals to a reverse distributor must comply with all
applicable U.S. Department of Transportation regulations in 49 C.F.R.
§§ 171-180 for any potentially creditable hazardous waste
pharmaceutical that meets the definition of hazardous material in 49
C.F.R. § 171.8

• Reverse distributors must provide delivery confirmation of shipped
pharmaceuticals to the shipper and that delivery is not complete until
the pharmaceutical is under the custody and control of the receiving
reverse distributor

• A shipper must provide delivery confirmation within 35 days after
shipment of the pharmaceutical. If delivery confirmation is not
received, the shipper must take specific action to locate the shipment

EPA Final Rule: Non-creditable Hazardous
Waste Pharmaceutical

• Under the final rule, the EPA states that a non-creditable hazardous
waste pharmaceutical means a prescription hazardous waste
pharmaceutical that does not have a reasonable expectation to be
eligible for manufacturer credit or a nonprescription hazardous waste
pharmaceutical that does not have a reasonable expectation to be
legitimately used/reused or reclaimed

• This includes but is not limited to, investigational drugs, free samples
of pharmaceuticals received by healthcare facilities, residues of
pharmaceuticals remaining in empty containers, contaminated
personal protective equipment, floor sweepings, and cleanup material
from the spills of pharmaceuticals. A hazardous waste pharmaceutical
that is non-creditable may not be sent to a reverse distributor

EPA Final Rule: Controlled Substances

• Conditionally exempts controlled substances that are
hazardous waste from the final rule’s regulations so long as
the substances are managed in compliance with DEA
regulations. This includes controlled substances obtained via
take-back programs

Questions?

Kala Shankle
Director, Policy and Regulatory Affairs

[email protected]