CRS Issues Primer Detailing Legislative Efforts in Supply Chain Security

Before a drug package is delivered to a patient, the pharmaceuticals are passed through a supply chain including manufacturers, wholesale distributors, repackagers, storage and transport companies, and dispensers, leaving many opportunities for the drugs to be tampered with. The Congressional Research Service (CRS) has developed a primer on supply chain issues and the steps that Congress has taken to address supply chain security.

Supply Chain Issues

Each step in the supply chain presents opportunities for counterfeiting, adulteration, misbranding, and mislabeling. Problems have included counterfeit Adderall and Vicodin being sold on the internet, insulin vials requiring refrigeration being stolen and reintroduced into the supply chain with no accountability for proper handling, and expired seizure drugs being returned for credit and sold to patients.

Although opinion as to how to handle these issues may vary, the ultimate goals are shared—the protection of patients from ineffective and dangerous drugs, the protection of manufacturers from loss of money and reputation, and the assignment of accountability to those responsible for problems in the supply chain. Policymakers are working toward reaching these goals in a logistically and financially feasible manner and aim to develop a national plan that will avoid the confusion of having to apply diverse state requirements.

Federal Law

The federal Food, Drug, and Cosmetic Act (FDC Act), passed in 1938, helps to regulate the pharmaceutical supply chain in areas such as prohibitions and penalties of adulterated and misbranded drugs, pharmaceutical security, producer and facilities registration and inspection, and imports and exports. Since then, Congress has made three concentrated efforts toward making the pharmaceutical supply chain more secure, which the CRS primer highlights.

The Prescription Drug Marketing Act of 1987 (PDMA) most notably established requirements for creating a pedigree that identifies the chain of custody for drugs from its wholesalers to its distributors. However, because the PDMA excluded authorized distributors of record from the pedigree requirements, many secondary distributors receiving the drugs next did not have the proper information to pass down to customers, threatening to put the secondary distributors out of business. Following a preliminary injunction prohibiting the FDA from implementing these pieces of the PDMA, the FDA exercised in discretion in requiring only that drug pedigrees go back to the last authorized distributor of record.

The Food and Drug Administration Amendments Act of 2007 (FDAAA) required the Secretary of the Department of Health and Human Services (Secretary) to develop standards for identifying and validating technologies for making the pharmaceutical supply chain more secure. In response, the FDA issued “Guidance for Industry on Standards for Securing the Drug Supply Chain” in March of 2010. The FDAAA also required that the Secretary undertake enhanced activities for enforcement along with other federal and state agencies, set up capabilities for validating and inspecting pharmaceuticals, and address promising technologies for doing so.

The Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA) gave the FDA more authority in registration, facility inspection, and importation, giving the FDA the ability to refuse entry of imported drugs from manufacturing facilities where inspection was either denied or limited. The FDASIA also enhanced penalties for suppliers of counterfeit and substandard pharmaceuticals.

State Law

About half of all states have developed and passed laws addressing the security of the drug supply chain, addressing issues such as pedigrees, recordkeeping, licensing, permits, and registration, as well as industry definitions. In developing a uniform national system, Congress has focused on California’s supply chain law (found throughout Business and Professions Code sec. 4000 et seq.), which requires electronic pedigrees to include every transaction between the manufacturer and the dispenser of prescription drugs and mandates that the electronic data must be handled in a system compatible throughout all states. The CRS primer stressed that, in developing a national system, Congress should aim to create a less extensive federal law to avoid preemption of state law, establishing a legislative foundation on which states may build.

Recent Developments

Currently, the Drug Quality and Security Act (DQSA), Title II of which houses the Drug Supply Chain Security Act, is awaiting Senate action, having been passed by the House in September.