Title II - Licensure of Wholesale Distributors and 3PL s

Transcription

1 Title II - Licensure of Wholesale Distributors and 3PL s Drug Quality and Security in 2016 Washington, DC January 26, 2016 Elizabeth A. Gallenagh, JD, Senior Vice President, Government Affairs and General Counsel, Healthcare Distribution Management Association Tim Bishop, Senior Manager, Quality Assurance, UPS SCS, Healthcare Americas Region, UPS Heather Zenk, RPh, PharmaD, Vice President, Business Integration, AmerisourceBergen Martha Russell, Assistant General Counsel - Regulatory, Cardinal Health, Inc.

2 DSCSA Licensure Liz Gallenagh SVP, Govt. Affairs & General Counsel HDMA

3 DSCSA Licensure Who are the stakeholders? Why did Title II address licensure? What requirements are included? Impact on wholesalers and 3PLs Current status and State activity

4 HDMA Members 33 Primary Pharmaceutical Distributor members The nation s primary pharmaceutical distribution companies are the vital link in the healthcare system, helping pharmacies, hospitals and other healthcare providers keep their shelves stocked with the medications and products that patients need every day. Primary pharmaceutical distributors purchase a majority of prescription medicines and other medical products directly from manufacturers and store this inventory in their networks of warehouses and distribution centers across the country. Pharmacies, hospitals and other healthcare providers place orders with distributors for the medicines they need, and the distributors process and deliver the orders on a daily basis. Each business day, primary pharmaceutical distributors deliver 15 million prescription medicines and healthcare products to more than 200,000 licensed healthcare providers in all 50 states, including chain drug stores, independent pharmacies, hospitals, long-term care facilities and clinics.

5 Stakeholders WHOLESALE DISTRIBUTOR. The term wholesale distributor means a person (other than a manufacturer, a manufacturer s colicensed partner, a third-party logistics provider, or repackager) engaged in wholesale distribution (as defined in section 503(e)(4), as amended by the Drug Supply Chain Security Act).

6 Stakeholders WHOLESALE DISTRIBUTION. The term wholesale distributor means a person (other than a manufacturer, a manufacturer s colicensed partner, a third-party logistics provider, or repackager) engaged in wholesale distribution (as defined in section 503(e)(4), as amended by the Drug Supply Chain Security Act).

7 Stakeholders Wholesale Distributors Third Party Logistics Providers (3PL) Pharmacies and other Dispensers Manufacturers Repackagers Co-Licensed Partners Private Label Distributors

8 2013 HDMA Map of State Pedigree Legislation/Regulations As of November 1, 2013 WA MT ND ME OR MN NH CA NV ID AZ UT WY NM CO SD NE KS OK IA MO AR WI IL MI IN KY TN OH PA WV VA NC SC NY VT MA RI CT NJ DE MD MS AL GA TX LA HI FL AK 20 No Legislation or Regulations 1 Proposed Legislation 8 Enacted Legislation 3 Enacted Legislation, 18 Rules In Development Final Rules Adopted

9 DSCSA Licensure Establishment of uniform national licensing standards for wholesale distributors and 3PLs FDA is tasked with issuing regulations to further define those standards. States will continue to license wholesale distributors and 3PLs, but they will be required to do so utilizing the federal standards established. DSCSA provides that in the absence of a state licensing program that satisfies the federal requirements, a federal licensing program will be established to license wholesale distributors and 3PLs in those states.

10 Role of the States Preemption of state activity regarding wholesale distributor and 3PL licensure that are inconsistent with, less stringent than, directly related to, or covered by the standards established by the Act. In other words, states cannot alter the standards established by the Act, but they may continue to regulate wholesale distributors and 3PLs in areas that are not covered by and not directly related to the licensing standards in the Act.

11 Reporting / Database FDA Database of Wholesale distributors by name, contact information, and each State in which such WD is licensed to engage in wholesale distribution. Wholesale distributors began reporting annually to FDA (beginning Jan. 1, 2015) the following information in order to populate the agency s database: Each State in which the wholesale distributor is licensed Name, address, and contact information for facility Any significant disciplinary actions (e.g., revocation or suspension of a license)

12 Standards for Wholesalers Storage and handling of prescription drugs, including facility requirements Establishment and maintenance of distribution records Surety bond for issuance or renewal of a WD license Background checks and fingerprinting of facility managers or designated representatives Qualifications for key personnel Mandatory inspection of the facility following initial application for licensure (by Federal or State licensing authority or an approved third-party inspection service) Persons prohibited from receiving or maintaining a WD license

13 HDMA DSCSA State Activity Chart January 2016 WA MT ND ME OR MN NH CA NV ID AZ UT WY NM CO SD NE KS OK IA MO AR WI IL MI IN KY TN OH PA WV VA NC SC NY VT MA RI CT NJ DE MD MS AL GA TX LA HI FL AK Wholesaler Licensure Activity 3PL Activity 11 3PL and Wholesaler Licensure Activity

14 DSCSA, 3PLs Perspective Tim Bishop UPS SCS Senior Quality Assurance Manager Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

15 UPS SCS Background 15 US Healthcare Pharmaceutical Distribution Centers Just under 3M sq. ft. of temperature controlled storage in U.S. Globally 48 Healthcare DCs Provides logistics and distribution services and offers full order to cash office services Typical daily US Healthcare DC Volume Over 11,000 Orders Around 2.0 M Units Rx only is roughly 700 K of the 2 M Units shipped Most all volume destined for interstate commerce Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

16 Wholesaler vs 3PLs Differences (Why the need for separate licensing standards) 3PLs do not take title/ownership of the drugs Take instruction from the client, no decision making regarding the product Do not choose the suppliers or buyers Do not determine disposition of the product (i.e. returns, quarantine etc) Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

17 What were the 3PL issues? Patchwork of licensure requirements among 50 States Administration of over 1000 U.S. only licenses for all DCs, added costs For most states only a Wholesaler License available Inconsistent and at times inapplicable compliance standards for 3PLs Lengthy licensure application process New facilities could take over a year to fully license Licensure issues harm the supply chain and have the potential to create drug shortages in certain states Hinders the availability of new drugs and newly approved generics to expediently get to market Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

18 What was accomplished with DSCSA? Effectively introduced the 3PL definition into Federal law Establish a single standard for licensing Requires all 3PLs to be identified Established requirements for Transaction History Documents and Serialization Allows better tracking of drugs throughout the supply chain Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

19 Challenges 3PLs are Facing Delayed Standards Promulgation States uncomfortable with 3PLs operating in the absence of FDA-issued 3PL standards Some state adopting 3PL requirements ahead of the Federal standard Some states adding 3PL language that simply mirrors wholesaler requirements 3PL standards should instead be in line with DSCSA and recognize the difference between a 3PL and Wholesaler. Some states still require VAWD certification as part of state licensure VAWD adopting 3PL standards ahead of Federal standard Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

20 Challenges 3PLs are Facing (cont.) Preemption Confusion States adopting 3PL requirements that are preempted under DSCSA Need clear guidance to States on 3PL standards and what licensure States can and cannot require Confusion in the States on authority to license Example: some states are requiring licensing for non-resident 3PLs, even when licensed federally and by resident state Disrupting the supply chain, product coming to stand still Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

21 DSCSA, 3PLs Perspective This presentation is intended for discussion purposes only. The information contained in this presentation is not legal advice and does not necessarily represent the opinion or position of United Parcel Service, Inc., nor the opinion or position of any of its affiliates, employees, or agents. Any questions regarding application or interpretation of legal issues discussed herein should be referred to your legal counsel. Copyright United Parcel Service, Inc Do not use, copy, or reproduce in any manner without express written permission from United Parcel Service, Inc.

22 DSCSA Wholesaler Perspective Heather Zenk RPh, PharmD, Vice President, Global Secure Supply Chain

23 Getting to Know AmerisourceBergen AmerisourceBergen is a leading global healthcare solutions company We are shaping healthcare delivery with solutions that improve product access, increase supply chain efficiency and enhance patient care

24 24 Who Are Our Customers

25 AmerisourceBergen: By the Numbers $135B in annual revenue 18,000 associates Daily delivery to 50,000 healthcare facilities 140+ offices 1.5M product lines delivered from 30+ distribution centers 50+ countries 49% 95% 100% Specialty distribution market share U.S. hospitals served with specialty medications Percentage of major U.S. pharmaceutical manufacturers served

26 Structured for Solutions AmerisourceBergen Drug Corporation Specialty Group Animal Health Global Sourcing & Manufacturer Relations Drug distribution to retail pharmacies, hospitals and alternate sites Good Neighbor Pharmacy services to independent pharmacies Product dispensing and packaging solutions Business coaching and consulting Specialty drug distribution to physician offices, hospitals and alternate sites Practice efficiency solutions 3PL and clinical trial logistics Specialty pharmacy Global health outcomes Patient access and adherence services Animal health product distribution Veterinary practice efficiency solutions Product dispensing and production animal management technologies VetOne private label animal health product portfolio Global partnership development with pharmaceutical manufacturers Product sourcing and supply chain management across all channels PRxO Generics program management and operations

27 US Supply Chain Network Invested $1 billion over past 10 years in distribution network and IT systems 6 highly automated Distribution Centers were built in strategic locations Corporate HQ Office Locations ABC Distribution Centers Automated Distribution Centers National Distribution Center

28 Wholesale Perspective on Licensing BUSINESS OPERATIONS

29 Pre-DSCSA Wholesaler Issues State by state licensing requirements. Licensing handled at the Distribution Center level. Each Distribution Center has multiple licenses. Internal processes not centralized or transparent. Complicated intra-business commerce. Inconsistent inspections Inconsistent requirements

30 How DSCSA Impacted Wholesalers Created a federal mandate, eliminating the state-by-state procedures. Created a single licensing standard. By provided clarity in licensing standards eliminates confusion in the supply chain. Centralized location for wholesaler licenses to be viewed, FDA hosted.

31 Opportunities & Challenges Opportunities: Consistencies in the licensing standards. Clarity in the licensing requirements. Who really needs a wholesale license? Examples of trading partners with a wholesale license today: Manufacturers 3PLs Challenges: Chain pharmacies Health systems One federal license criteria vs. states adapting the standards and localizing them for autonomy. How can the states align with the intentions of the FDA. States are beginning to interpret 3PL licensing requirements. Confusion could stall movement of Rx product through the supply chain.

32 Wholesale Licensing Perspective QUESTIONS

33 State Activity Update Martha Russell Assistant General Counsel - Regulatory Cardinal Health

34 How States are Affected by DSCSA DSCSA preempted state activity regarding wholesale distributor and 3PL licensure. Specifically, any laws/regulations that are inconsistent with, less stringent than, directly related to, or covered by the standards established by the Act are/will be preempted. States may continue to regulate wholesale distributors and 3PLs in areas that are not covered by and not directly related to the licensing standards in the Act (e.g., state controlled substances).

35 HDMA DSCSA State Activity Chart January 2016 WA MT ND ME OR MN NH ID SD WI MI NY VT CA NV UT WY CO NE KS IA MO IL IN KY OH WV PA VA MA RI CT NJ AZ NM OK AR TN SC NC DE MD MS AL GA TX LA HI FL AK Wholesaler Licensure Activity 3PL Activity 11 3PL and Wholesaler Licensure Activity

36 State Activity Arizona: wholesale drug distribution taskforce began work in 2014; Board member reinstated group in October 2015 to prepare to revise AZ regulations. California: SB 600 (Lieu), legislation that facilitates administrative changes to the California pedigree law related to DSCSA was signed by the governor in September AB 2605, which creates a new 3PL licensure category was also signed in Sept

37 State Activity Florida: DBPR has issued seven Declaratory Statements in response to specific preemption questions from industry in All have recognized federal preemption. HB 1211; legislation introduced in January 2016; administrative updates to DBPR statutes.

38 State Activity Idaho: HDMA was involved in discussions with Board of Pharmacy to update statute in October Anticipate 3PL legislation in Louisiana Board of Drug and Device Distributors (fka Board of Wholesale Drug Distributors): SB 39 passed in 2015.

39 State Activity Oklahoma: Board of Pharmacy established a Pedigree Work Group that addressed preempted pedigree requirements. Regulations were updated to delete preempted requirements and refer to relevant federal sections. Oregon: Board as discussed revising rules to comply with DSCSA.

40 State Activity Tennessee: SB 97 signed by Governor on 4/24/15. Creates a new 3PL licensing requirement. Virginia: HB 528: DSCSA legislation that includes clean-up of old pedigree language, definitions, 3PL language.