Details: Drug Supply Chain Security Act

On November 27th of last year, President Obama signed the Drug Quality and Security Act. A year later, Title II outlines vital steps to build an electronic, interoperable system to identify and track prescriptions drugs throughout the United States.

In an effort to protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated, or harmful, the Drug Supply Chain Security Act calls upon drug manufacturers, wholesale drug distributors, repackagers, and primary pharmacies to work with the FDA to develop a new system over the next decade. The system will enable legitimacy verification of the drug product identifier—down to the package level, enhance detection and notification of illegitimate products in the drug supply chain, and facilitate more efficient recalls. Failure to comply with the requirements of the law can result in penalties.


Requirements for the development of the system will include providing product and transaction information at each sale with lot level information (in paper or electronic format), and placing unique product identifiers on individual drug packages. The law also requires the FDA to develop standards, guidance documents, and pilot programs. A schedule is currently being worked on for the implementation.


Below is a list of how the requirements will impact supply chain players:

  • Manufacturers, wholesaler drug distributors, repackagers, and many primary pharmacies will have to provide information about a drug—and who handled it—each time it’s sold in the U.S. market

  • Third-party logistic providers must obtain a state or federal license

  • Wholesale drug distributors will be required to report their licensing status and contact information to the FDA

  • Manufacturers, wholesaler drug distributors, repackagers, and many primarily pharmacies have to quarantine and investigate a drug that has been identified as suspect (counterfeit, unapproved, or potentially dangerous)

While the threat of counterfeit drugs is hardly a new one, the impact of the counterfeit drug industry appears to be growing. In February of 2011, counterfeit Avastin, a widely used cancer drug, was detected in 19 U.S. medical practices across three states, all batches apparently bought from the same foreign supplier. 

The "chaotic drug market" as one scholar put it, which includes all drug manufacturers with incomplete, expired, or non-existant licenses, was set to bring in over $75 Billion a year by 2010 – a 90% increase in market value from 2005. In the past year, issues with foreign drug manufacturers have seen increased restrictions placed on drugs coming from certain regions of Asia, particularly India

The Drug Supply Chain Security Act is just the latest regulation to attempt to quell the rapidly expanding counterfeit drug market. Domestic and international lawmakers have been working for the last decade to slow the accelerating market, but with little success. 


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