House and Senate committees offer a 'discussion draft' and there is talk of passing a law before year end
Call it a spark, a smoke signal or a semaphore—just don’t call it a bill: The Senate Health, Education, Labor and Pensions Committee, chaired by Tom Harkin (D-IA), has posted a “discussion draft” of a proposal “to improve drug distribution security” on Oct. 24. The draft represents a new effort to establish a federal-level track-and-trace system, and federal-level licensing, for participants in pharmaceutical distribution. The committee statement says that the draft “reflects an ongoing bipartisan and bicameral effort to develop consensus policy on drug distribution security. Senate and House committee staff will review input from members of Congress and stakeholders to inform this process.”
Washington sources have been telling Pharmaceutical Commerce that committee-level discussions of track-and-trace legislation have been proceeding, even in the aftermath of the failed effort to get such rules incorporated into the FDA Safety and Innovation Act that was signed into law this summer. This discussion draft is the a visible sign of that; and being a “discussion,” only, it is far from being a bill that would be formally debated. But it is significant that both Republican and Democratic legislators, in both the House and Senate, are involved; that could signify a better-than-fair chance that (as some sources have said), a bill could become law this year—something that has been attempted, in varying forms, since 1988 when the Pharmaceutical Drug Marketing Act was passed.
The draft, which doesn’t even have a name, seems to have a starting point of incorporating as many relevant elements as possible, perhaps with the thought that it’s better to start with all possibilities and then whittle them down. Specifically, while including expected language on a national licensing program for wholesalers, it also includes similar language for third-party logistics providers—a new area of licensing in pharma distribution (3PLs handle some drug shipments, but typically do not take ownership of the shipment; if they did, that would make them a wholesaler by default). “Common carriers” (i.e., trucking or air freight) are excluded from this 3PL definition. A hot button issue in the past year’s legislative efforts—whether to track shipments at the individual package level, or a looser (but less reliable) lot level, seems to be heading for the unit-level requirement—something that would satisfy FDA and others who objected to the failed lot-level approach. Another hot button is varying definitions of “authorized trading partner,” which could be synonymous with “authorized distributor of record.” This has been a stumbling block to past federal efforts, in that there are numerous legal distributors today who are not “authorized” by manufacturers to deal in their products.
A key area of interest to national manufacturers and wholesalers has been to have uniform federal standards; to this end, the draft offers that “[N]o State or political subdivision of a State may establish or continue in effect any requirements … which are inconsistent with, more stringent than, or in addition to, any requirements applicable under this Act.” Historically, states have been required to meet minimum federal standards, but have usually been free to go beyond them; this explicit limitation might be subject to debate in federal court. (But not from California--its state law, which is the source of the 2015 deadline that many industry participants are paying attention to, specifies that it would be superseded by relevant federal law.) There is also some ambiguity as to whether a “pedigree” (the term is used explicitly in a few places) equates with a full transaction history of a drug shipment (which can go through many hands), or what has been termed a “one-up, one-down” approach, detailing only the immediate previous trading partner. There are four options laid out for wholesaler licensing, including one that is lifted, in part, from the California e-pedigree rules.
The Pharmaceutical Distribution Safety Alliance (PDSA), a group of manufacturers, wholesalers, retailers and others involved with drug distribution, has already issued a statement that “applauded Members of Congress for their continued efforts to develop a single, uniform national system to protect America's health care consumers,” adding that “We look forward to reviewing the latest proposal and to working with Congress and other stakeholders to develop final language.”