Last week the US (Congressional Budget Office) issued a report on Bill S.959 – which is currently before the US Senate – in which it claimed the financial impact of the proposals on manufacturers (see text box) would be small.
The CBO said that: “Because existing law in California contains similar requirements and affects nearly all manufacturers, repackagers, wholesale distributors, and TPLs, CBO estimates that the cost of the mandates contained in S. 959 for those private-sector entities would be small; the affected entities already comply with most of those requirements in order to conduct business in California.”
Dirk Rodgers, an independent pharma security consultant, disagreed with this analysis, telling in-Pharmatechnologist.com the comments are “a little misguided.”
“Adoption of the Senate bill would immediately preempt the California law so companies would be able to immediately stop preparing for the 2015 through 2017 deadlines of that law.
“The CBO’s statement seems to imply they believe that the California law would remain in effect until the new federal law finally reaches the same level of rigor in 2023 as the California law would reach in 2017, which isn’t the case in my understanding of the bill.”
S.959 requires drugmakers to:
- Maintain records of the transaction history of all drug products for six years;
- Accept or transfer ownership of only those drug products with a UID (uniform identification number and applicable transaction history;
- Verify the transaction history and UIDs of drug products;
- Identify suspect or illegitimate drug products and notify FDA and entities that may have received such products;
- Identify, quarantine, dispose, and maintain records of illegitimate drug products; and
- Pay fees to cover the costs of licensing.
Expansion of FDA Powers
The Senate track and trace Bill also would authorize FDA to expand its oversight of the drug distribution system in the United States. The legislation aims to require enhanced monitoring of the chain of transactions from the manufacturer to the pharmacy, or other entity that ultimately dispenses the drug to the consumer.
Key provisions include new requirements on the drug distribution system relating to the mandatory usage of UIDs, storage and handling of drugs, maintaining transaction history records and identifying concerning drugs that could be counterfeit, diverted, stolen, or seemingly unfit for distribution.
Licensing Wholesalers, Third-Parties
The legislation would require FDA to license certain drug wholesalers and third parties that provide logistics services for a pharmaceutical manufacturer, wholesaler, or distributor. Such logistics services include warehousing and transporting drug products without taking ownership or responsibility for the sale or disposition of the products.
The Senate bill would require all such facilities to be licensed by a state or FDA. The bill would authorize the collection and spending of fees by FDA to cover the costs of activities related to licensing and periodic inspections. CBO expects that FDA would begin licensing facilities in fiscal year 2016 and it expects that FDA would set fees to cover $35M in estimated gross costs for the licensing programs between 2016 and 2018.