Groups weigh in on FDA’s licensing rules for 3PLs and distributors

Regulatory NewsRegulatory News | 07 September 2022 | By

Supply chain trading partners expressed broad support for the US Food and Drug Administration’s (FDA) proposed rule on uniform licensing standards for wholesale distributors and third-party logistics providers (3PLs), which are set to replace the current patchwork system of state licensing standards. The standards implement aspects of the Drug Supply Chain Security Act (DSCSA) and are meant to plug holes in the country’s pharmaceutical supply chain.
 
The generic drug industry lobby said it supported the fact that licensing rules would not apply to manufacturers that distribute their own products and requested that the final rule eliminate the practice for “manufacturer licenses” in some states for manufacturers that distribute their own products.
 
There were also calls from the Healthcare Distribution Alliance (HDA) to better align licensing rules between wholesale distributors and 3PLs. All wholesalers and 3PLs will be held to these licensing standards once a final rule take effect.
 
The comments were made in response to FDA’s proposed rule issued in February 2022. (RELATED: FDA issues long-awaited licensing rules for drug distributors and 3PLs, Regulatory Focus 3 February 2022)
 
DCSCA views 3PLs and distributors as partners in the supply chain that provide warehousing or logistical services to manufacturers or dispensers but who do not take ownership of products. Manufacturers distributing their own drug products will not be subject to these licensing rules.


FDA received 69 comments from the public, medical device manufacturers, pharmaceutical companies, logistics providers and other trading partners.
 
National 3PL licensing system supported
 
The proposal was met with broad support from a variety of trading partners, including the Medical Device Manufacturers Association (MDMA); McKesson and Hikma Pharmaceuticals.
 
“MDMA applauds the interpretation of section 585(b)(1) of the FD&C Act as preempting States and localities from establishing or continuing requirements for 3PL or WDD licensure that are different from the Federal requirements and agrees that establishing both a “floor” and a “ceiling” is consistent with the fundamental purpose of the DSCSA provisions to strengthen the security and integrity of the drug supply chain through uniform national requirements.”
 
McKesson concurred, saying it supports “FDA’s ongoing commitment to assuring that supply chain participants are sufficiently vetted and qualified to distribute prescription drugs and appreciate the recognition that a national standardized approach to licensure is the best path forward for the healthcare ecosystem and patients.”
 
Hikma said it “strongly endorses the FDA’s proposal to establish national standards via licensing of wholesale drug distributors (WDDs) and third-party logistics providers (3PLs) as described by the FDA in the proposed rule … The current patchwork system of state licensing requirements is limiting access to crucial, lifesaving medicines.”
 
The company, however, wants a licensing exemption for medicines needed during a public health emergency.
 
AAM supports manufacturer licensing exemption
 
In its comments, the Association for Accessible Medicines (AAM) said it “agrees with FDA’s position in the proposed rule indicating that manufacturers distributing their own drug products should not be subject to licensing as wholesale distributors.”
 
The group says that several states require manufacturers to acquire and maintain distributor licenses covering activities such as warehousing, shipping and other logistical activities involving their own products.
 
AAM wrote that FDA should clarify that “this same logic should also be extended to different states that require licenses for manufacturers that distribute their own products. Regardless of the name of the license, we agree with FDA’s contention that the practice of requiring manufacturers to license at state levels for distribution activities for their own products should be considered preempted by the federal licensure rule, which establishes both a floor and ceiling for licensing requirements at state levels, when final. We ask FDA to clarify this in the final version of the licensure rule by eliminating the practice of requiring licenses by manufacturers for their activities distributing their own products, regardless of the title of the license.”
 
HDA wants alignment between wholesalers and 3PLs
 
The Healthcare Distribution Alliance (HDA) requested more alignment between licensing rules for 3PLs and wholesale distributors.
 
“We believe compliance will be more smoothly accomplished, with a better understanding of responsibilities and requirements if the two sections are as closely aligned as possible and so do not convey the perception that they impose different requirements. Seemingly minor differences may distract both the regulated and the regulators from whether the difference is meaningful and intended, mandated by differences in the DSCSA, or simply a drafting artifact.”
 
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Tags: 3PLs, DSCSA, FDA

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