The New Grandfathering Provisions Of The California Pedigree Law

Grandfather clockImportant Notice To Readers of This Essay On November 27, 2013, President Barack Obama signed the Drug Quality and Security Act of 2013 into law. That act has many provisions, but one is to pre-empt all existing and future state serialization and pedigree laws like those that previously existed in California and Florida. Some or all of the information contained in this essay is about some aspect of one or more of those state laws and so that information is now obsolete. It is left here only for historical purposes for those wishing to understand those old laws and the industry’s response to them.At the February 5, 2013 meeting of the California Board of Pharmacy the Board took the final vote to proceed with filing a number of important clarifying regulations–the first since the Ridley-Thomas bill was enacted in 2008 that established the current staggered effective dates.  These include  the recognition of the FDA Standardized Numeric Identifier (SNI) as the “unique identifier” for use on each drug package, and definition around how supply chain companies can grandfather their existing non-serialized, non-pedigreed stock at the time the law goes into effect.

The official minutes of the meeting are not yet available but the video has been posted for a few weeks now.  The pertinent action occurs in the first video of the two day meeting at approximately 2:24:00 (hours:minutes:seconds).  (Don’t you just love government meetings on YouTube?)  The source text of the pending regulation (which is still subject to potential non-substantive text changes by staff as they file it) is posted here.

FDA SNI

This action makes it official that the board now requires drug manufacturers to follow the FDA SNI guidance in creating the “unique identifier” that is specified by the California pedigree law, effective January 1, 2015 (for 50% of each manufacturers production) and January 1, 2016 (for the remaining 50%).  For more on the FDA’s SNI, see my essay “FDA Aligns with GS1 SGTIN For SNDC“.  This completes the action the Board initiated early last year.  See my essay “California Enforcement Subcommittee Moves To Require FDA SNI“.

This is a very important move by the board and one that I think most people will view as a positive one.  The FDA SNI guidance tees up the use of GS1’s SGTIN, which can be encoded within linear and 2D barcodes and in GS1 compliant passive RFID tags.  This allows manufacturers to use the same equipment and software they are using to comply with serialization laws in other countries around the world that refer to, or otherwise allow, GS1 encoding.  That does NOT include some important countries like China or Italy, but it does include countries like Brazil, Argentina and South Korea.  The European Union will almost certainly do the same in their regulations in the near future.  Watch for that.

Without this action by the Board, wholesalers and pharmacies might have had to prepare for all kinds of technologies.  Some people define the term “unique” to include the word “weird”.  Nailing down the definition in the way the Board and the FDA have done is exactly the kind of thing the industry needs.  It allows some flexibility, but still places some limits on the range of technologies that can be used to meet the law.  See my essays “Should Regulations Dictate Technology?” and “Should FDA Cede All Standards Development To GS1?“.

GRANDFATHERING

The same action that forces compliance with the FDA SNI guidance also provided a lot more clarity around grandfathering existing non-serialized/non-pedigreed inventory that will be on the shelves of each company when the law takes effect.  The California law doesn’t actually use the word “Grandfathering”.  The Board calls it “Specification of Existing Stock” and the new regulation explains exactly what the Board expects each company to do prior to the effective date of the law for each segment.  Here are the key portions.  (I have made formatting changes to make it easier to read.  Read the full unmodified text here.)

“…each manufacturer of a dangerous drug distributed in California shall submit to the board no later than December 31, 2014, a declaration signed under penalty of perjury by an owner, officer, or employee with authority to bind the manufacturer, containing the following:

  • A list and quantity of dangerous drugs by name and product package (SKU) type representing at least fifty (50) percent of the manufacturer’s total that are ready for initial implementation of the serialized electronic pedigree requirements as of January 1, 2015;
  • A statement identifying which one of the following methods was used to measure the percentage of drugs ready to be serialized: (i) unit volume, (ii) product package (SKU) type, or (iii) drug product family;
  • A statement describing the calculation(s) used to arrive at the percentage figure of dangerous drugs ready for serialized pedigree requirements;
  • A list and quantity of dangerous drugs by name and product package (SKU) type that are in the remaining percentage not yet ready to be serialized or subject to pedigree requirements; and,
  • a statement specifying the technology employed to meet the pedigree requirements, including but not limited to any platform(s), vendor(s), hardware, software, and communication technologies deployed.

 

“…each manufacturer of a dangerous drug distributed in California shall also submit to the board no later than December 31, 2015, a declaration signed under penalty of perjury by an owner, officer, or employee with authority to bind the manufacturer, containing the following:

  • A list and quantity of its remaining dangerous drugs by name and product package (SKU) type that are ready for implementation of serialized electronic pedigree requirements as of January 1, 2016.
  • A statement identifying which one of the following methods was used to measure the final percentage of drugs to be serialized: (i) unit volume, (ii) product package (SKU) type, or (iii) drug product family;
  • A statement describing the calculation(s) used to arrive at the final percentage figure; and, 
  • A statement specifying the technology employed to meet the pedigree requirements, including but not limited to any platform(s), vendor(s), hardware, software, and communication technologies deployed.

[…]

“…any manufacturer, wholesaler or repackager seeking to designate dangerous drugs it possesses, owns, or controls that are not subject to the serialized electronic pedigree requirements, shall submit to the Board, by no later than July 31, 2016, a declaration signed under penalty of perjury by an owner, officer, or employee with authority to bind the manufacturer, wholesaler or repackager, containing the following:

  • a list and quantity of dangerous drugs by name, product package (SKU) type and National Drug Code (NDC) product identifier in the possession, ownership, or control of the manufacturer, wholesaler or repackager that were acquired prior to July 1, 2016;
  • a statement that specifies the means and source of acquisition; and,
  • a statement that specifies the anticipated means of any subsequent distribution or disposition.

“…any pharmacy or pharmacy warehouse seeking to designate dangerous drugs it possesses, owns, or controls that are not subject to the serialized electronic pedigree requirements, shall submit to the Board, by no later than July 31, 2017, a declaration signed under penalty of perjury by an owner, officer, or employee with authority to bind the pharmacy or pharmacy warehouse, containing the following:

  • A list and quantity of dangerous drugs by name, product package (SKU) type and National Drug Code (NDC) product identifier in the possession, ownership, or control of the pharmacy or pharmacy warehouse that were acquired prior to July 1, 2017;
  • A statement that specifies the means and source of acquisition; and,
  • a statement that specifies the anticipated means of any subsequent distribution or disposition.

[…]”

Notice that this requires manufacturers to notify the Board exactly which drugs will be included in their calculation of the 50% of their production that must be serialized by January 1, 2015 and 2016, and which method they used to perform that calculation.

The “grandfathering” provisions are the last two.  In a recent meeting, Virginia Herold, Executive Officer of the Board of Pharmacy, made the point that these provisions would have been more critical back when the law would have taken effect for all segments at the same time–that is, prior to the passage of the Ridley-Thomas bill.  Now that the effective date of each segment is staggered, a big portion of the inventories of wholesalers and pharmacies should already be compliant with the law when those segments must begin to comply.  Only the remainder of their inventories will need to be grandfathered.

Still, this action answers a number of important questions about how this law will be implemented.  If you still have questions about California’s use of SNI, grandfathering or any other topic, I see that TraceLink is hosting a live webcast featuring Virginia Herold doing Q&A on March 20.  That should be an excellent opportunity to learn more.  Click here for details.

Dirk.

One thought on “The New Grandfathering Provisions Of The California Pedigree Law”

  1. Hi Dirk,

    I missed this meeting so great synopsis as usual.

    I see that you mentioned the EU which is still moving along and as many of the member countries are GS1 standard in nature I believe there will be an adoption of GS1 encoding rules.

    I did actually get a copy of a “fairly” recent presentation from “efpia” that outlines what progress is being made towards a serialized tracking system and how this might work. There is also a chart showing proposed intro’ dates.

    The current timeline calls for a published delegated act in 2014 with mandatory compliance 3 years after the publication of the act. The basic proposal allows for secure entry and exit points as the controlled substances enter and exit the supply chain. This would also include a central EU hub linking all countries, suppliers and points of final distribution – to cover products crossing borders.

    I guess like California we need to wait and see what actually happens.

    Pete’N

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