DSCSA Exemption For Public Health Emergencies

On March 10, 2020, Alex M. Azar II, Secretary of Health and Human Services of the US government, declared a public health emergency (PHE) under Section 319F of the Public Health Service Act “…to provide liability immunity for activities related to medical countermeasures against COVID-19.”  This action immediately opened an exemption embedded in the Drug Supply Chain Security Act (DSCSA) for the “covered persons” performing the “covered countermeasures” aimed at the specific “threat” in the covered “geographic area”, for the identified “population” for the “effective time period” specifically identified in the declaration. 

This is only the second public health emergency with nationwide scale announced in at least the last 20 years.  The first was for the opioid crisis.  The intent of these declarations is to lower the liability exposure to companies helping to create, distribute and administer countermeasures aimed at ending the emergency.  Let’s take a closer look at the effect of the Covid-19 PHE on the DSCSA and companies in the US pharma supply chain.

According to the PHE declaration, the covered persons for this emergency include:

“…’manufacturers,’ ‘distributors,’ ‘program planners,’ ‘qualified persons,’ and their officials, agents, and employees, as those terms are defined in the PREP Act, and the United States.

“In addition, I have determined that the following additional persons are qualified persons: (a) Any person authorized in accordance with the public health and medical emergency response of the Authority Having Jurisdiction, as described in Section VII below, to prescribe, administer, deliver, distribute or dispense the Covered Countermeasures, and their officials, agents, employees, contractors and volunteers, following a Declaration of an emergency; (b) any person authorized to prescribe, administer, or dispense the Covered Countermeasures or who is otherwise authorized to perform an activity under an Emergency Use Authorization in accordance with Section 564 of the FD&C Act; and (c) any person authorized to prescribe, administer, or dispense Covered Countermeasures in accordance with Section 564A of the FD&C Act.”

The covered countermeasures include:

“…any antiviral, any other drug, any biologic, any diagnostic, any other device, or any vaccine, used to treat, diagnose, cure, prevent, or mitigate COVID-19, or the transmission of SARS-CoV-2 or a virus mutating therefrom, or any device used in the administration of any such product, and all components and constituent materials of any such product.

“Covered Countermeasures must be ‘qualified pandemic or epidemic products,’ or ‘security countermeasures,’ or drugs, biological products, or devices authorized for investigational or emergency use, as those terms are defined in the PREP Act, the FD&C Act, and the Public Health Service Act.”

The covered threat is:

“… COVID-19 caused by SARS-CoV-2 or a virus mutating therefrom.”

The geographic area is “…without limitation” and the effective time period extends through October 1, 2024.

The exemption within Section 581(24)(B)(iii) of the DSCSA for PHEs has to do with the adjusting the definition of the term “Transaction”. 

“EXEMPTIONS […] the distribution of a product for emergency medical reasons including a public health emergency declaration pursuant to section 319 of the Public Health Service Act, except that a drug shortage not caused by a public health emergency shall not constitute an emergency medical reason;”

Under a declared PHE, the distribution of the covered products is not considered to be DSCSA “transactions”.  Section 582(a)(1) establishes that companies in the supply chain must follow the requirements defined in that section when products are the subject of “transactions”.  Section 582 is, in effect, the entire DSCSA, so this means that any DSCSA “product” covered by the PHE is no longer subject to the requirements of the DSCSA within the covered geography for the effective time period.


Any transactions that are exempt from the definition of DSCSA “transactions” could legally occur without any of the mandated elements of the DSCSA, including non-serialized packaging, no 2D barcode, and without simultaneous transmission of TI, TH and TS documentation.  And saleable returns of these products would not need to be verified, either at the lot level or, after November 27, 2020, at the SNI level, before they are resold.  And these drugs could be legally bought and sold between trading partners who are not “authorized”, at least in states that do not require a local license (or exempts the need for a license under a federal or local equivalent of a PHE).


Separately from the PHE for Covid-19, on March 28, 2020, Denise M. Hinton, Chief Scientist with the FDA issued,

“…an Emergency Use Authorization (EUA) for emergency use of oral formulations of chloroquine phosphate and hydroxychloroquine sulfate for the treatment of 2019 coronavirus disease (COVID-19) when administered by a healthcare provider (HCP) pursuant to a valid prescription of a licensed practitioner as described in the Scope of Authorization (section II) of this letter. The authorized chloroquine phosphate and hydroxychloroquine sulfate are limited to product supplied from the Strategic National Stockpile (SNS) to public health authorities, pursuant to Section 564 of the Federal Food, Drug and Cosmetic Act (the Act) (21 U.S.C. 360bbb-3).”

I’ve added the emphasis to the limitation in the quote above because it seems kind of important, but on the question of supply chain transactions of Hydroxychloroquine and its various related forms being exempt from the DSCSA, I assume they are, but I don’t know that they are.  Maybe someone out there can comment on what they know to be true about that.  Maybe only those shipments out of the Strategic National Stockpile to public health authorities are exempt, since all other shipments would be aimed at approved applications, which are aimed at non-Covid-19 related conditions.

Someone very close to me takes Hydroxychloroquine for Rheumatoid Arthritis and she is freaking out, because ever since shortly after President Trump announced that he thinks it will work against Covid-19, it has been on the FDA’s shortage list.  She’s afraid that she won’t be able to get a refill of her prescription when she runs out.  That will be a real private health emergency (PrHE) for her. How long do you think it will be before we see fake Hydroxychloroquine products for sale in gas stations and convenience stores? 


I know it seems like I dropped off the face of the Earth since February.  Sorry about that.  No, I don’t think I have Covid-19.  I left for a two week vacation in the last few days of February and I don’t like to announce my vacations publicly in advance.  We’re in a new era here at RxTrace since all of the paid subscriptions ran out in March.  I always intended to post essays less frequently going forward (especially when I’m on vacation) but even I am surprised it has taken me this long to finally find a topic and the time to write something coherent.  I tried a few weeks ago but the results were so pathetic that I couldn’t post it. 

This week’s topic came to me when I heard it mentioned briefly on the HDA’s recent webinar.  I decided to look it up and figure out the implications under the DSCSA.  I remembered that there was a permanent exemption in the DSCSA for public health emergencies but I wasn’t sure how it would apply to this one.

Fortunately, I have also been very busy with client work since returning from vacation.  I hope that keeps up as long as it can under these circumstances.  I’ve worked from home for the last decade so this working arrangement is not new to me, but it only really works these days when clients give me work to do.  So far, so good.  If you have need of my consulting services, leave a message through RxTrace.  I’m not too busy to bring on new clients.