Late last Friday the California Board of Pharmacy published a proposed regulation for pharmaceutical drop shipments under their ePedigree law that is scheduled to go into effect in 2015 through 2017. See the text of the proposed regulation for “Electronic Pedigree Requirements for Drop Shipments” here, the notice of its proposed action here, and their “Initial Statement of Reasons” here. The Board is now seeking public comments on the proposed text through October 28, 2013.
The Board had asked for public input into the operation of drop shipments in the past to assist it with drawing up the regulation, which was mandated by State Bill 1307, the same bill that pushed out the effective dates from 2011 to the current staggered dates. The proposed regulation now joins the “unique identification number” and “grandfathering” proposed regulations as the only pedigree-related regulations the Board has started formal action on so far.
I call it a “breakthrough” proposal because the proposed regulation removes the responsibility of the wholesaler, involved solely for invoicing and related financial transactions in a manufacturer to pharmacy drop shipment, from being included on the ePedigree. Up until this proposal, the Board had indicated that they wanted the wholesaler’s involvement to appear on these ePedigrees somehow, even though in this type of transaction the wholesaler never touches the product.
Here is the complete text of the proposed regulation:
“1747.2 Drop Shipments.
For the purposes of Business and Professions Code section 4163.1, when a manufacturer utilizes the ‘drop shipment’ method of sale as defined by that section, the data elements pertaining to transfers of ownership to and from the wholesale distributor, including any certifications of receipt and delivery thereby, may be omitted from the pedigree, in which case the manufacturer shall convey the pedigree directly to the pharmacy or other person authorized by law to dispense or administer the dangerous drug prior to or contemporaneous with delivery of the corresponding dangerous drug.”
This is only a proposal and that means that the Board could decide to modify it significantly before adoption, but just the fact that they now acknowledge that the involvement of the wholesaler in these transactions is beneficial and not something to be feared, is a breakthrough. You see, I recall a Board or staff member making an offhand but public comment back around 2007 that implied they thought drop shipments were a shadowy business process designed intentionally to hide transactions and cover up supply chain histories. As I remember it, this person said that the industry’s use of drop shipments was an indication that it needed to “clean up its act”. That comment left us all scratching our heads at the time.
So I think we can all celebrate the turnaround in the Board that has come as the result of long hard work by key individuals from the industry who have educated the Board and staff on this topic. And the Board should be commended for having the fortitude to propose a regulation that is so different from the original ideas they had on this topic. Everyone will benefit from this one.
The Board of Pharmacy will hold a public regulation hearing on this proposed regulation in Garden Grove, California on October 28, 2013 at 4pm, the last day of public comments. Their next ePedigree Committee meeting will be held near LAX airport on Thursday, September 26, 2013. See you there.