Is Your Drug Exempt From The Federal Drug Supply Chain Security Act? Revisited

Exempt signI am working this week, but I know this is a popular time for vacations, especially for those who do not have children in school.  I typically write my Monday essays over the weekend, but because it was a holiday weekend and my wife and I did some leisure traveling, I decided to re-post a popular essay from earlier this year:  “Is Your Drug Exempt From The Federal Drug Supply Chain Security Act?“.

I wrote this essay to help companies, large and small, figure out whether or not their products might be exempt from the DSCSA.  In it, I provide a kind of a formula that you can use to determine if a given product is exempt or not.  At least it’s a series of questions or statements that you can ask yourself about your product.  So without further ado,


Ever since the Drug Quality and Security Act (DQSA) was signed into law last November (see “It’s Official, President Obama Signs H.R. 3204, DQSA, Into Law”), more and more people are asking the question, “Does my drug have to follow the DQSA?”.  Recently I was on a monthly industry call put on by one of the Big 3 wholesale distributors to discuss the Drug Supply Chain Security Act (DSCSA), which is Title II of the DQSA.

I was surprised how many people asked the wholesaler if their specific product was covered or exempt.  Of course, asking a wholesale distributor if your own product must follow a particular Federal law is not likely to get a usable response and that was true in this case, but it did not stop the next person from asking the same kind of question.

In fact, no one can answer that question for you.  Even the FDA can’t answer that question for you.  I can’t answer that question for you.  Only YOU can answer that question based on your knowledge of your product’s characteristics and a careful reading of certain provisions of the DSCSA.  I can help you with that part. 


In general, many of the provisions of the DSCSA that are related to the movement of product in the supply chain apply only to prescription drugs “…in a finished dosage form for administration to a patient without substantial further manufacturing (such as capsules, tablets, and lyophilized products before reconstitution)“.  So if the FDA does not consider your drug to be a prescription drug (“Rx Only”), then it does not need to comply with the DSCSA.

Formally, a “prescription drug” is defined by the law to as a drug for human use that is subject to the Food, Drug and Cosmetics Act, Section 503(b)(1).  This apparently exempts drugs that are strictly for use only in animals.

Further, if your drug must be sold “behind the pharmacy counter” in some States, that does not make it a prescription drug.  Those are State laws and the FDA does not pay attention to State laws when regulating drugs nationally.  Even if some States require your drug to be dispensed by a pharmacist only to those who have a physician-issued prescription, if the FDA has not classified it as a prescription drug, then you are off the hook when it comes to following the DSCSA.  In these cases, the FDA considers your drug to be Over-The-Counter (OTC), and therefore exempt.

If your product is a device—even if the FDA requires your device to be dispensed only with a physician-issued prescription (“Rx Only”)—then it is not a prescription drug and therefore it is not covered by the DSCSA.

But be careful here.  Some devices are classified by the FDA as drug-device or biologic-device Combination Products (CPs).  In that case, if the FDA has determined that the Primary Mode of Action (PMOA) of your product is as a drug or a biologic, then your CP is not exempt from the DSCSA (unless the FDA has already informed you that your CP must be labeled with a Unique Device Identifier, UDI) (see “Correction: Your Drug or Biologic Combination Product Is Probably NOT Exempt From The DQSA”).  If your device has a drug or biologic built into it or in combination with it, I suggest that you check with the FDA office of Combination Products to make sure you understand how they would classify it before deciding to ignore the DSCSA.


The elimination of drugs that are only for use in animals, OTC products, and devices narrows the application of the DSCSA nicely.  But we can go further.  Here is a list of products that are explicitly exempt from the DSCSA.  That is, they are not considered DSCSA “products” and are therefore not required to follow the DSCSA regulations:

  • Blood or blood components intended for transfusion;
  • Radioactive drugs or radioactive biological products that are already regulated by the Nuclear Regulatory Commission (NRC) or by a State under an agreement with the NRC;
  • Imaging drugs;
  • Medical gases;
  • Appropriately marked homeopathic drugs;
  • Compounded drugs
    (Compounded drugs are now regulated by the Compounding Quality Act, which is Title I of the DQSA);
  • Intravenous products that are intended for the replenishment of fluids and electrolytes or calories;
  • Intravenous products used to maintain the equilibrium of water and minerals in the body, such as dialysis solutions;
  • Products intended for irrigation, or sterile water, whether intended for such purposes or for injection.


On the distributor call I heard one question that the DSCSA text does not cover directly.  We can use it as an example to help others who might have another unique/niche product that is regulated by the FDA but may or may not be regulated by the DSCSA.  The caller’s product was apparently recently licensed by the FDA as a “prescription food”.  I don’t know what that is—perhaps a “nutraceutical”—but as long as it is recognized by the FDA as a product that requires humans to obtain a prescription before they may receive it, and as long as it is not on the list above, you can be reasonably sure it must follow the DSCSA.

In this case, you should already have an National Drug Code (NDC) assigned to your product (see “Anatomy Of The National Drug Code”), which is necessary to properly identify your product under the DSCSA.  If you don’t have an NDC for your product, then there is a disconnect somewhere.  Either you are mistaken that your product is licensed by the FDA as a drug or biologic, or you have not yet registered your product with the FDA.  In either case, maybe your product is not a drug or biologic.  If not, then you don’t have to follow the DSCSA.  Check with the FDA.


Even if your product is not exempt, you may still be exempt from following many of the provisions of the DSCSA under certain types of transactions.  In most cases, these are products that would need to follow the DSCSA (not exempt) under other types of transactions, but in these transactions, they are exempt.  Here is a short list of transactions that manufacturers might be involved in and that are not considered “DSCSA transactions” and are therefore exempt from following the DSCSA, but only while in these specific transactions:

  • Intracompany distribution of any product between members of an affiliate or within a manufacturer;
  • The distribution of product samples by a manufacturer or a licensed wholesale distributor;
  • The distribution of “medical convenience kits”, a collection of finished medical devices, which may include a drug product or biological product, assembled in kit form strictly for the convenience of the purchaser or user, if:
    • the kit is assembled in an establishment that is registered by the FDA as a device manufacturer;
    • the kit does not contain any controlled substance; and
    • the kit manufacturer purchased the drug or biologic product contained in the kit directly from the pharmaceutical manufacturer or from a wholesale distributor that purchased it directly from the pharmaceutical manufacturer, and the primary container label of the drug or biologic product contained in the kit is not altered;
    • and the drug or biologic product contained in the kit is:
      • An intravenous solution intended for the replenishment of fluids and electrolytes;
      • A product intended to maintain the equilibrium of water and minerals in the body;
      • A product intended for irrigation or reconstitution;
      • An anesthetic;
      • An anticoagulant;
      • A vasopressor; or
      • A sympathomimetic;

As soon as you determine that your product is exempt from the DSCSA make sure you notify all trading partners who will receive that product to provide them with your rationale.  Wholesale distributors, 3PLs, repackagers and dispensers will all need to decide if they agree with you, or they may expect you to provide them with the new transaction documentation when they receive your product after January 1, 2015.

If they do not agree with your determination, they may not be willing to accept it because they would feel obligated to follow the DSCSA, even if you do not, and you would not be able to give them the documentation they need to comply.  That would be a disaster for you.  Interpretations will vary, especially early on, and the FDA may not be willing to fill the role as an arbiter in these cases.

Only you can make the final determination if your product is exempt from the DSCSA.  You need to understand the DSCSA to do that.  If you need help, I recommend my new book “The Drug Supply Chain Security Act Explained”, available at


5 thoughts on “Is Your Drug Exempt From The Federal Drug Supply Chain Security Act? Revisited”

  1. Good afternoon Dirk,

    I truly enjoy reading your essays. I like how it explains the law and what is required in “plain English”. I would like to know if you, or anyone you know, is doing the same thing for other markets? Say EU, Brazil, China, etc. that are confirmed to have a serialization requirement for their pharma products.
    Any suggestions would be greatly appreciated.


    1. Pam,
      Thanks for the supportive comment. I’m not aware of anyone who writes about the regulations in other markets. I would cover them more but because of the language, cultural and regulatory differences–and because most of those markets are not as open as the U.S. government–it is very hard to do with confidence. I have some ideas for essays that touch on some of the more publicly understood parts of the regulations in those countries, I just need time to make sure what I write is accurate and properly framed.

      Thanks for reading and for your comment.


  2. Dirk,

    Your essays decoding the DSCSA are spot-on, a real pleasure to read. If Congress had decided against the Rube Goldberg approach to supply chain security, many of us would be seeking honest employment.

    Would you agree with my conclusions that the DSCSA does not (a) apply to bulk drug substances (active pharmaceutical ingredients), and therefore (b) preempt state pedigree laws as applied those substances?

    For example, Florida’s pedigree law applies to “prescription drugs,” a term that includes active pharmaceutical ingredients if substantially all finished dosage forms in which they may be lawfully dispensed or administered (in Florida) are also prescription drugs.


    1. Robert,
      Thanks. I agree that the DSCSA clearly only applies to finished dosage form, packaged pharmaceuticals and NOT active pharmaceutical ingredients (APIs). I also agree that it preempts all state laws regarding only finished dosage form, packaged pharmaceuticals. See the FDASIA law for new regulations regarding the API supply chain. If Florida interprets their Legislature’s use of the term “prescription drugs” as you describe, then perhaps the DSCSA does not preempt that part. I would need to study the DSCSA preemption language again with that specific case in mind but I’m too busy right now to get to that. My opinion is that the Florida legislature should consider their entire pedigree law to be preempted and let the feds regulate the national drug supply chain. Of course, the Florida legislature does not read RxTrace!


  3. Thanks, Dirk. Take it from someone who has lived and (almost) died with Florida’s arcane pedigree laws: the Florida legislature would do well to read RxTrace!

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