Regulatory Focus™ > News Articles > Senate Track and Trace Legislative Draft Includes Lot-Level Requirements and New Penalties

Senate Track and Trace Legislative Draft Includes Lot-Level Requirements and New Penalties

Posted 22 April 2013 | By

A long-delayed and once-abandoned legislative provision that would overhaul the manner in which drug products are overseen in the US is in the process of being reintroduced in the US Senate, legislators announced on 19 April 2013.


The measure, known as pharmaceutical track and trace, is a collection of tools employed to make sure regulators and companies can determine the authenticity, identity and whereabouts of a particular drug product. It is so named because, under an ideal system, regulators would be able to track where a product is going in the supply chain and trace where it has been.

While track and trace has experienced broad support among legislators, its particular details have been a source of frequent serious debate.

During the 2012 debate over the Food and Drug Administration Safety and Innovation Act (FDASIA), legislators seriously considered but ultimately dropped a track and trace provision from the bill at the last minute over at least three major concerns: Who might pay for a system if it were to be implemented, the level of granularity required to be tracked (lot level or unit level), and what the system might look like (a real-time system or serialization with barcodes and databases).

Rather than risk the broad-based support that FDASIA enjoyed, proponents of track and trace decided to sideline the measure, leaving it to either be treated as a stand-alone bill or bundled up into another piece of healthcare legislation.

At the time of the provision being dropped from FDASIA, some in industry speculated that track and trace could find its way into the Pandemic and All-Hazards Preparedness Reauthorization Act (PAHPRA), another huge piece of legislation passed in 2013 that provided new funding and authority for FDA to carry on its biodefense regulatory activities. Track and trace was not, however, among the bill's many provisions.

More recently, two prominent pharmaceutical industry associations, the Pharmaceutical Research and Manufacturers of American (PhRMA) and the Generic Pharmaceutical Association (GPhA), issued a call for the revival of track and trace, saying recurring examples of counterfeit products entering the US supply chain illustrated the sort of vulnerabilities that track and trace would be able to shore up.

"Now is the time to pick up where the previous FDASIA effort left off," they wrote in an opinion-editorial in Politico.

A New Effort

Now legislators have done just that, with the Health, Education, Labor and Pensions (HELP) Committee releasing a new discussion draft of a pharmaceutical track and trace plan on 19 April 2013.

HELP Committee members said the discussion draft "reflects a yearlong effort to find bipartisan, consensus policy on drug distribution security."

Led by four key legislators-Chairman Tom Harkin (R-IA), Ranking Member Lamar Alexander (R-TN), and Senators Michael Bennet (D-CO) and Richard Burr (R-NC)-the plan as currently constituted would utilize a lot-level product tracing as a basic requirement, active verification requirements for those involved in the supply chain, new security requirements, and long-term changes intended to transition to a unit-level tracing requirement.

Lot Level to be Standard, but Unit Level on the Horizon

As explained in an overview of the legislation, it "sets forth lot-level product tracing requirements for 'downstream' pharmaceutical supply chain members," including drug manufacturers. All entities would be required to pass along information about their products to the next person in the supply chain, such as a re-packager or wholesaler. While this information must be lot-level at the bare minimum, if a company chooses to use unit-level tracing, that information would need to be transmitted and used instead.

"The timeline for serializing product and accepting and transferring only serialized product is phased in: manufacturers in 4 years after the date of enactment of this Act; repackagers in 5 years; wholesale distributors and third-party logistics providers in 6 years; and dispensers in 7 years," the HELP Committee wrote. Some products would be allowed to be grandfathered, but the details will be left up to FDA to determine.

Section 582 of the Act goes on to explain that interoperable, electronic unit-level product tracing will be required 10 years after the legislation's date of enactment, settling a key point of contention that derailed earlier efforts to pass the legislation. However, the US Food and Drug Administration would be required to determine the effects of unit-level traceability on small companies (25 employees or fewer), which might result in "alternative methods of compliance" or a waiver process if it is found to be too burdensome for some companies.

All requirements would pre-empt state law-a relief for some manufacturers already wary of the prospect of dealing with multiple track and trace standards, such as those now under development in California.

Other Requirements

All data, regardless of the format, would be able to be requested by FDA or other regulators, particularly for recall actions, for which track and trace is intended to be most beneficial. Failure to comply with lot-level tracing requirements would subject a manufacturer or other distribution entity to penalties, including misbranding violations under the law.

The law also provides for new licensure standards intended to crack down on deficient wholesalers, the likes of which some legislators have blamed for counterfeit products and gray-market distribution practices. Under the new legislation, standards for wholesale distributor licensure would be strengthened, and FDA would be charged with creating a database to track all wholesalers, which would be required to self-report to FDA. That website would be made available on the Internet for public use.

That last provision may be familiar to any long-term analysts of federal legislation. It was included in Rep. Elijah Cummings' (D-MD) May 2012 legislation, The Gray Market Drug Reform and Transparency Act of 2012, which failed to make it out of committee. The same provision was also in an October 2012 draft of a track and trace bill that bears many similarities to the current draft of the legislation.

Senate Discussion Draft of Track and Trace

Overview of Track and Trace

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