Dispensers, DSCSA

Who Is A DSCSA Dispenser?

???????????????????????????????????When the U.S. Drug Supply Chain Security Act (DSCSA) was signed into law last November, it introduced a new term into the supply chain lexicon:  “Dispenser”.  It is unfortunate that the authors chose not to use a more recognizable word—like “pharmacies”, or “hospitals”, or “physicians”—because, if they had, more organizations in the dispensing sector might have taken more notice of the requirements they are facing.  But, of course, they could not do that because they wanted to refer to all of those organizations using a single term.  All of those types of organizations fall into the DSCSA definition of “dispensers” and the use of that word appears to have led to some confusion, and therefore some amount of complacency.

“Dispenser” is one of the terms the DSCSA defines so that the rest of the text does not need to repeat the full list of organizations the authors are referring to (see “Don’t Skip The DQSA Definition of Terms Section”).  Its definition is only applicable within the text of the law and so it is one of the terms you cannot simply look up in a dictionary to figure out if it applies to you.  You must apply the definition contained within the law itself.  From Section 581(3), that definition is (bullets added):

“ ‘dispenser’—

(A) means

  • a retail pharmacy,
  • hospital pharmacy,
  • a group of chain pharmacies under common ownership and control that do not act as a wholesale distributor,
  • or any other person authorized by law to dispense or administer prescription drugs,
  • and the affiliated warehouses or distribution centers of such entities under common ownership and control that do not act as a wholesale distributor; and

(B) does not include a person who dispenses only products to be used in animals in accordance with section 512(a)(5).”

This definition covers a lot of companies as well as individuals in our healthcare system.  In fact, it covers more companies, more locations and more people than those covered by the DSCSA definitions of “manufacturer”, “wholesale distributor” and “repackager” combined.  Essentially, a “DSCSA dispenser” is any company or individual that is authorized to dispense or administer prescription drugs to a patient.  This not only covers the obvious companies, like CVS Health, Walgreens, Rite-Aid, Kroger, WalMart, Target, hospitals, clinics and your corner mom-and-pop pharmacy, but it also includes individual pharmacists, physicians and dentists.  If there is a State or Federal law that authorizes a company or individual to dispense or administer prescription drugs to a person, that company or individual is covered in the DSCSA definition of “dispenser” and they are obligated to follow the dispenser provisions of the DSCSA.

Those dispenser provisions dictate new requirements for the acquisition of drugs from suppliers in the supply chain, so if a pharmacist, physician or dentist works as an employee or contractor for a company that handles the acquisition of prescription drugs separately from their duties (and that company itself is authorized under the DSCSA and State law to do so) then the practitioner probably does not have any obligation under the DSCSA.  But if the practitioner plays any role in that acquisition (including selecting the source, placing the orders, managing the inventory or even just receiving the shipments), or is an owner of a company that acquires prescription drugs, pay attention to the dispenser provisions of the DSCSA.  They likely apply to you.

WHEN MUST A DISPENSER BEGIN COMPLYING?

In addition to the confusion over exactly who is a dispenser, there is a common misconception over exactly when those who fall into that category must begin to comply with the DSCSA.  Ask most people who have read the DSCSA carefully and they will tell you that the date is July 1, 2015.  That is where the misconception starts.

It is true that a few of the DSCSA dispenser provisions take effect on July 1, 2015, but the most important ones take effect on January 1, 2015, right along with those of manufacturers, wholesale distributors and repackagers.  This includes the foundational requirement that dispensers may buy drugs only from companies that are authorized under the DSCSA to sell drugs in the U.S. supply chain.  The term “Authorized” is defined by the DSCSA as holding a valid license.  Most States issue licenses to wholesale distributors.

Starting in January, if you acquire prescription drugs from sources that do not hold a valid license in your State, you are violating Federal law.  If your State is one that does not issue licenses to wholesale distributors, then your supplier must hold a valid Federal wholesale distributor license.  Under the DSCSA, the buying company or person—the dispenser in this case—is responsible for knowing that the person or company they buy their prescription drugs from hold that valid license [see Section 582(d)(3)].  That’s new, and it is big, and it starts on January 1, 2015.

Another provision that takes effect on January 1, 2015 requires dispensers [individual healthcare practitioners are exempted, see Section 582(d)(5)] to have in place a system for quarantining and conducting investigations into drugs in their possession or control that they, or others, suspect might be illegitimate, and drugs that have been found (by them or by others) to actually be illegitimate.  There are specific actions contained in the DSCSA that dispensers must take “promptly” in these situations.

Most dispensers will probably not be touched by suspect or illegitimate product anytime soon, but be prepared to face Federal action if you are one of the few who is notified that you have acquired products that have fallen under someone’s suspicion and you do not follow the procedure outlined in the DSCSA.

That notification could come from the FDA, your State Board of Pharmacy, a trading partner or the manufacturer.  If it comes from the FDA and you do not follow the DSCSA steps properly, you are in violation.  To avoid confusion and inaction, everyone in the supply chain—including dispensers—should have written Standard Operating Procedures (SOPs) on file that cover these situations, before January.  For more on conducting these investigations, see “The FDA’s Draft Guidance on Suspect Product, and Farewell Columbus”.

WHAT HAPPENS IN JULY 2015 AND BEYOND?

About the only thing added in July of 2015 is that dispensers [individual healthcare practitioners are exempted, see Section 582(d)(5)] must begin receiving and providing Transaction Information (TI), Transaction History (TH), and Transaction Statements (TS) from their suppliers at the time they buy and sell prescription drugs (not including dispensing to a patient).  However, dispensers may return saleable drugs to the supplier that they originally acquired them from without providing the transaction data, and they may return non-saleable drugs to the manufacturer, a returns processor, the original wholesale distributor or someone acting on behalf of any of those, without providing the transaction data.  Changes of ownership from a dispenser to anyone else requires the dispenser to provide the buyer with the proper transaction documentation.  These documents must be stored for a period of six years and must be retrievable within two business days in the event of an investigation at any time during those six years (see “DSCSA: A Closer Look At The Six-Year Record-Keeping Requirement”).

Dispensers may continue to buy drugs that do not contain serial numbers applied by the manufacturer or repackager as specified by the DSCSA until November of 2020.  After that date dispensers must begin verifying that the lot number of suspect product corresponds to the real lot number, AND that the serial numbers (the Standardized Numerical Identifier, or SNI) on at least 3 packages, or 10% of the suspect product in their possession, whichever is greater, matches those in the suspect product notification.  [See Section 582(d)(4)(A).]

To help eliminate the confusion, you might want to pick up a copy of my book, “The Drug Supply Chain Security Act Explained”, by Dirk Rodgers.  It is a section-by-section explanation of the DSCSA that is designed to help you make sense out of the text (see “The Drug Supply Chain Security Act Explained”).

Dirk.