[Federal Register Volume 79, Number 112 (Wednesday, June 11, 2014)]
[Notices]
[Pages 33564-33568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-13544]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-D-0609]


Draft Guidance for Industry on Drug Supply Chain Security Act 
Implementation: Identification of Suspect Product and Notification; 
Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the 
availability of a draft guidance for industry entitled ``Drug Supply 
Chain Security Act Implementation: Identification of Suspect Product 
and Notification.'' The draft guidance addresses new provisions in the 
Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the 
Drug Supply Chain Security Act (DSCSA). The draft guidance is intended 
to aid certain trading partners (manufacturers, repackagers, wholesale 
distributors, and dispensers) in identifying a suspect product and 
terminating notifications regarding illegitimate product. This draft 
guidance identifies specific scenarios that could significantly 
increase the risk of a suspect product entering the pharmaceutical 
distribution supply chain; provides recommendations on how trading 
partners can identify the product and determine whether the product is 
a suspect product as soon as practicable; and for product that has been 
determined to be illegitimate, or (for manufacturers) has a high risk 
of illegitimacy, sets forth the process by which trading partners 
should notify FDA of illegitimate product and how they must terminate 
the notifications, in consultation with FDA.

DATES: Although you can comment on any guidance at any time (see 21 CFR 
10.115(g)(5)), to ensure that the Agency considers your comment on this 
draft guidance before it begins work on the final version of the 
guidance, submit either electronic or written comments on the draft 
guidance by August 11, 2014. Submit either electronic or written 
comments concerning the collection of information proposed in the draft 
guidance by August 11, 2014.

ADDRESSES: Submit written requests for single copies of the draft 
guidance to the Division of Drug Information, Center for Drug 
Evaluation and Research, Food and Drug Administration, 10903 New 
Hampshire Ave., Bldg. 51, Rm. 2201, Silver Spring, MD 20993-0002; or 
the Office of Communication, Outreach and Development, Center for 
Biologics Evaluation and Research, Food and Drug Administration, 1401 
Rockville Pike, Suite 200N, Rockville, MD 20852-1448. Send one self-
addressed adhesive label to assist that office in processing your 
requests. See the SUPPLEMENTARY INFORMATION section for electronic 
access to the draft guidance document.
    Submit electronic comments on the draft guidance to http://www.regulations.gov. Submit written comments to the Division of Dockets 
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, 
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Carolyn Becker, Office of Compliance, 
Center for Drug Evaluation and Research, Food and Drug Administration, 
10903 New Hampshire Ave., Silver Spring, MD 20993-0002, 301-796-3100, 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

    FDA is announcing the availability of a draft guidance for industry 
entitled ``Drug Supply Chain Security Act Implementation: 
Identification of Suspect Product and Notification.'' On November 27, 
2013, the DSCSA (Title II of Pub. L. 113-54) was signed into law. 
Section 202 of the DSCSA adds section 582(h)(2) to the FD&C Act (21 
U.S.C. 360eee-1(h)(2)), which requires FDA to issue guidance to aid 
certain trading partners (manufacturers, repackagers, wholesale 
distributors, and dispensers) in identifying a suspect product and 
terminating notifications regarding an illegitimate product. This 
guidance identifies specific scenarios that could significantly 
increase the risk of a suspect product entering the pharmaceutical 
distribution supply chain and provides recommendations on how trading 
partners can identify the product and determine whether the product is 
a suspect product as soon as practicable.
    Starting January 1, 2015, section 582 of the FD&C Act requires 
trading partners, upon determining that a product in their possession 
or control is illegitimate, to notify FDA and all immediate trading 
partners (that they have reason to believe may have received the 
illegitimate product) not later than 24 hours after making the 
determination. Manufacturers are additionally required under section 
582(b)(4)(B)(ii)(II) of the FD&C Act to notify FDA and immediate 
trading partners (that the manufacturer has reason to believe may 
possess a product manufactured by or purported to be manufactured by 
the manufacturer) not later than 24 hours after the manufacturer 
determines or is notified by FDA or a trading partner that there is a 
high risk that the product is illegitimate. This draft guidance 
addresses how trading partners should notify FDA using Form FDA 3911. 
In addition, in accordance with section 582(h)(2) of the FD&C Act, this 
guidance sets forth the process by which trading partners must 
terminate the notifications using Form FDA 3911, in consultation with 
FDA, regarding illegitimate product or, for a manufacturer, a product 
with a high risk of illegitimacy, under section 582(b)(4)(B), 
(c)(4)(B), (d)(4)(B), and (e)(4)(B).
    This draft guidance is being issued consistent with FDA's good 
guidance practices regulation (21 CFR 10.115).

[[Page 33565]]

The draft guidance, when finalized, will represent the Agency's current 
thinking on identification of suspect product and notification. 
Guidance documents generally do not create or confer any rights for or 
on any person and do not operate to bind FDA or the public. An 
alternative approach may be used if such approach satisfies the 
requirements of the applicable statutes and regulations. For this 
particular document, section 582 of the FD&C Act gives FDA authority to 
issue binding guidance on the process for terminating notifications of 
illegitimate product. Specifically, subsection (h)(2)(A) states that 
FDA ``shall issue a guidance document to aid trading partners in the 
identification of a suspect product and notification termination. Such 
guidance document shall . . . set forth the process by which 
manufacturers, repackagers, wholesale distributors, and dispensers 
shall terminate notifications in consultation with the Secretary 
regarding illegitimate product. . . .'' Thus, insofar as section IV.B 
of this guidance sets forth the process by which trading partners must 
terminate notifications of illegitimate product in consultation with 
FDA, it will have binding effect upon finalization.

II. Paperwork Reduction Act of 1995

    This draft guidance contains information collection provisions that 
are subject to review by the Office of Management and Budget under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The title, 
description, and respondent description of the information collection 
are given under this section with an estimate of the reporting and 
third-party disclosure burdens. Included in the estimate is the time 
for reviewing instructions, searching existing data sources, gathering 
and maintaining the data needed, and completing and reviewing the 
collection of information.
    We invite comments on these topics: (1) Whether the proposed 
collection of information is necessary for the proper performance of 
FDA's functions, including whether the information will have practical 
utility; (2) the accuracy of FDA's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques, when 
appropriate, and other forms of information technology.
    Title: Drug Supply Chain Security Act Implementation: 
Identification of Suspect Product and Notification.
    Description: Under section 202 of the DSCSA, manufacturers, 
repackagers, wholesale distributors, and dispensers (e.g., pharmacies) 
must: (1) Notify FDA when they have determined that a product in their 
possession or control is illegitimate, and for manufacturers, when they 
have determined or been notified by FDA or a trading partner that a 
product has a high risk of illegitimacy; (2) notify certain immediate 
trading partners about an illegitimate product that they may have 
received and, for manufacturers, that a product has a high risk of 
illegitimacy; (3) terminate notifications regarding illegitimate 
products, and, for manufacturers, a product with a high risk of 
illegitimacy, in consultation with FDA when the notifications are no 
longer necessary; and (4) notify immediate trading partners when the 
notifications are terminated.

1. Notifications to FDA

    Under section 582(b)(4)(B)(ii), (c)(4)(B)(ii), (d)(4)(B)(ii), and 
(e)(4)(B)(ii) of the FD&C Act, and beginning not later than January 1, 
2015, a manufacturer, repackager, wholesale distributor, and dispenser 
who determines that a product in its possession or control is 
illegitimate, as defined in section 581 of the FD&C Act (21 U.S.C. 
360eee), must notify FDA of that determination not later than 24 hours 
after the determination is made. In addition, section 
582(b)(4)(B)(ii)(II) of the FD&C Act requires manufacturers to notify 
FDA when a manufacturer determines or is notified by FDA or a trading 
partner that a product poses a high risk of illegitimacy.
    FDA estimates that a total of approximately 5,000 notifications per 
year will be made by all manufacturers, repackagers, wholesale 
distributors, and dispensers. This estimate includes the notifications 
by trading partners who have determined that illegitimate product is in 
their possession or control, as well as notifications by manufacturers 
that have determined a product poses a high risk of illegitimacy. This 
estimate is based on FDA's experience with Field Alert Reports (FARs) 
(Form FDA 3331) required to be submitted by holders of approved drug 
applications for certain drug quality issues (21 CFR 314.81(b)(1)) \1\ 
and with reports of the falsification of drug sample records, 
diversion, loss, and known theft of prescription drug samples as 
currently required under the Prescription Drug Marketing Act (PDMA).\2\ 
Because manufacturers, repackagers, and wholesale distributors are 
responsible for prescription drugs from the manufacturing through 
distribution processes, FDA assumes that most notifications of 
illegitimate products would be made by these three trading partners. 
FDA is combining the estimates for manufacturers and repackagers 
because FDA establishment and drug product listing database indicates 
that many companies perform activities of both manufacturers and 
repackagers. While the DSCSA specifically defines dispensers, for 
estimation purposes, FDA is using estimates for pharmacies in general 
terms and based on those that must comply with the new requirements 
under section 582(d) of the FD&C Act. FDA estimates that approximately 
50 percent of the notifications will be made by manufacturers and 
repackagers (2,500), 45 percent by wholesaler distributors (2,250), and 
5 percent by pharmacies (250).
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    \1\ FDA review of the number of Field Alert Reports (FARs) 
received in calendar year 2013 was approximately 5,000. Because FARs 
are incident and product specific, the estimation does not represent 
the number of companies that have submitted a FAR to FDA.
    \2\ FDA cursory review of the number of reports of falsified 
drug sample records, diversion, loss, or known theft of prescription 
drug samples under the PDMA in calendar year 2013 was approximately 
5,000. This number is being used for estimation purposes only 
because the DSCSA exempts transactions related to the distribution 
of product samples by a manufacturer or licensed wholesale 
distributor in accordance with section 503(d) of the FD&C Act (21 
U.S.C. 353(d)).
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    FDA estimates that the number of annual notifications will vary 
from 0-2 for manufacturers/repackagers, as well as from pharmacies, 
with the vast majority of companies making no notifications. While FDA 
establishment and drug product listing database currently contains 
registrations for approximately 6,500 manufacturers and repackagers, we 
estimate that approximately 2,500 manufacturers/repackagers will notify 
FDA of illegitimate product an average of one time per year. While FDA 
estimates approximately 69,000 pharmacy sites in the United States, 
based on data from the National Association of Chain Drug Stores, the 
National Community Pharmacists Association, and the American Hospital 
Association, we estimate that approximately 250 pharmacies will notify 
FDA of illegitimate product an average of one time per year.\3\ Because 
approximately

[[Page 33566]]

30 wholesale distributors are responsible for over 90 percent of drug 
distributions, based on sales,\4\ and because FDA is estimating that 
over 2,200 small wholesale distributors might be responsible for the 
remaining 10 percent of drug sales, we estimate that each distributor 
will make about an average of 1 notification per year to account for 
the estimated 2,250 notifications FDA will receive regarding 
illegitimate product.
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    \3\ The estimate of the number of pharmacies in the United 
States is based on combining estimates of: (a) 41,000 chain 
pharmacies provided in a National Association of Chain Drug Stores 
statement for the Senate Budget Committee Conferees (October 29, 
2013); (b) 23,000 independent pharmacies represented by the National 
Community Pharmacist Association (NCPA) according to NCPA's 2014 
media kit; and (c) 5,000 U.S. community hospitals in the United 
States, based on 2012 American Hospital Association Annual Survey 
and the assumption that each hospital has at least one pharmacy.
    \4\ The estimate of the number of wholesale drug distributors is 
based on the Healthcare Distribution Management Association number 
of members and estimation of the percentage of all prescription 
drugs sold in the United States by these entities provided in 
Congressional testimony before the U.S. House of Representatives, 
Committee on Energy and Commerce (April 25, 2013).
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    FDA intends to make available Form FDA 3911 on its Web page for 
notifying FDA. Each notification should include information about the 
person or entity initiating the notification, the product determined to 
be illegitimate, and a description of the circumstances surrounding the 
event that prompted the notification. FDA estimates that each 
notification will take about 1 hour. The estimated total annual burden 
hours for making notifications to FDA is approximately 5,000 hours 
annually (table 1).

2. Notifications to Trading Partners of an Illegitimate Product

    Under section 582(b)(4)(B)(ii), (c)(4)(B)(ii), (d)(4)(B)(ii), and 
(e)(4)(B)(ii) of the FD&C Act, a trading partner who determines that a 
product in its possession is illegitimate must also notify all 
immediate trading partners that the trading partner has reason to 
believe may have received such illegitimate product of that 
determination not later than 24 hours after the determination is made. 
In addition, a manufacturer is required, under section 
582(b)(4)(B)(ii)(II) of the FD&C Act, to notify all immediate trading 
partners that the manufacturer has reason to believe may possess a 
product manufactured by or purported to be manufactured by the 
manufacturer not later than 24 hours after the manufacturer has 
determined or been notified by FDA or a trading partner that the 
product has a high risk of illegitimacy.
    Because the extent of distribution of any illegitimate product is 
likely to vary from one situation to another, FDA is using estimates 
that assume wide distribution of each illegitimate product. FDA 
estimates that for each notification made by a manufacturer or 
repackager to FDA, approximately 30 trading partners (based on the 
number of distributors) will also be notified. This results in 
approximately 75,000 notifications annually to trading partners of 
manufacturers/repackagers. This estimate includes the notifications by 
manufacturers and repackagers who have determined that illegitimate 
product is in their possession or control, as well as notifications by 
manufacturers that have determined that a product poses a high risk of 
illegitimacy.
    FDA estimates that a large wholesale distributor might have up to 
4,500 trading partners, but a small wholesale distributor might have 
200 trading partners, for an average of approximately 2,350. A 
wholesale distributor would notify 2,350 trading partners for each of 
the 2,250 illegitimate products identified, resulting in approximately 
5,287,500 notifications annually to wholesale distributors' trading 
partners.
    FDA estimates that a pharmacy purchases prescription drugs from an 
average of two wholesale distributors. Therefore, a pharmacy would 
notify 2 trading partners for each of the 250 illegitimate products 
identified, resulting in approximately 500 notifications annually to 
pharmacy trading partners.
    Manufacturers/repackagers, wholesale distributors, and pharmacies 
might notify their trading partners using existing systems and 
processes used for similar types of communications, which might 
include, but is not limited to, posting of notifications on a company 
Web site, sending an email, or mailing or faxing a letter or 
notification. The information contained in the notification to the 
immediate trading partner should be the same as or based on the 
notification that was already submitted to FDA. FDA estimates that for 
all trading partners, each notification of immediate trading partners 
will take approximately 0.2 hours. The estimated total burden hours of 
making notifications to trading partners is approximately 1,072,600 
hours annually (table 2).

3. Consultation With FDA and Termination of Notification

    Section 582(b)(4)(B)(iv), (c)(4)(B)(iv), (d)(4)(B)(iv), and 
(e)(4)(B)(iv) of the FD&C Act require that a trading partner, who 
determines in consultation with FDA that a notification made under 
section 582(b)(4)(B)(ii), (c)(4)(B)(ii), (d)(4)(B)(ii), or 
(e)(4)(B)(ii) is no longer necessary, must terminate the notification. 
The draft guidance sets forth the process by which trading partners 
must consult with FDA to terminate notifications that are no longer 
necessary.
    FDA is making available to trading partners Form FDA 3911 on its 
Web page to request a termination of notification. Each request for 
termination of notification must include information about the person 
or entity initiating the request for termination, the illegitimate 
product or product with a high risk of illegitimacy, the notification 
that was issued, and an explanation about what actions have taken place 
or what information has become available that make the notification no 
longer necessary. The request for a termination will be viewed as the 
request for consultation with FDA. FDA estimates that the same amount 
of time will be required to provide the information necessary to 
request termination as is required to make the notification. The time 
required to investigate and resolve an illegitimate product 
notification will vary, but FDA assumes that each notification will 
eventually be terminated at some point. FDA assumes that the number of 
requests for termination of a notification per year will be the same as 
the original number of notifications for a given year. The estimated 
total burden hours of making requests for termination of notifications 
to FDA is approximately 5,000 hours annually (table 3).

4. Notifications to Trading Partners That a Notification Has Been 
Terminated

    Section 582(b)(4)(B)(iv), (c)(4)(B)(iv), (d)(4)(B)(iv), and 
(e)(4)(B)(iv) of the FD&C Act require that a trading partner who, in 
consultation with FDA, terminates a notification made under section 
582(b)(4)(B)(ii), (c)(4)(B)(ii), (d)(4)(B)(ii), or (e)(4)(B)(ii) must 
also promptly notify immediate trading partners that the notification 
has been terminated.
    FDA estimates that the burden for notifying trading partners of an 
illegitimate product and the number of trading partners notified will 
be the same as the estimates for notification of termination. The 
estimated total burden hours of notifying trading partners that the 
notification is terminated is approximately 1,072,600 hours annually 
(table 4).
    Description of Respondents: Respondents are drug manufacturers,

[[Page 33567]]

repackagers, wholesale distributors, and dispensers and might include 
small businesses in these categories.

                                 Table 1--Estimated Annual Reporting Burden \1\
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                                                    Number of
      Notifications to FDA          Number of     responses per    Total annual   Average burden    Total hours
                                   respondents      respondent       responses     per response
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Manufacturers and Repackagers..           2,500                1           2,500          1 hour           2,500
Wholesale Distributors.........           2,250                1           2,250          1 hour           2,250
Dispensers.....................             250                1             250          1 hour             250
                                --------------------------------------------------------------------------------
    Total......................  ..............  ...............  ..............  ..............           5,000
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.


                                 Table 2--Estimated Annual Reporting Burden \1\
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                                                    Number of
   Consultation with FDA and        Number of     responses per    Total annual   Average burden    Total hours
  termination of notification      respondents      respondent       responses     per response
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Manufacturers and Repackagers..           2,500                1           2,500          1 hour           2,500
Wholesale Distributors.........           2,250                1           2,250          1 hour           2,250
Dispensers.....................             250                1             250          1 hour             250
                                --------------------------------------------------------------------------------
    Total......................  ..............  ...............  ..............  ..............           5,000
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.


                           Table 3--Estimated Annual Third-Party Disclosure Burden \1\
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    Notifications to trading                        Number of
  partners of an illegitimate       Number of    disclosures per   Total annual   Average burden    Total hours
            product                respondents      respondent      disclosures   per disclosure
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Manufacturers and Repackagers..           2,500               30          75,000             .20          15,000
                                                                                    (12 minutes)
Wholesale Distributors.........           2,250            2,350       5,287,500             .20       1,057,500
                                                                                    (12 minutes)
Dispensers.....................             250                2             500             .20             100
                                                                                    (12 minutes)
                                --------------------------------------------------------------------------------
    Total......................  ..............  ...............  ..............  ..............       1,072,600
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.


                           Table 4--Estimated Annual Third-Party Disclosure Burden \1\
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                                                    Number of
    Notifications to trading        Number of    disclosures per   Total annual   Average burden    Total hours
    partners of termination        respondents      respondent      disclosures   per disclosure
----------------------------------------------------------------------------------------------------------------
Manufacturers and Repackagers..           2,500               30          75,000             .20          15,000
                                                                                    (12 minutes)
Wholesale Distributors.........           2,250            2,350       5,287,500             .20       1,057,500
                                                                                    (12 minutes)
Dispensers.....................             250                2             500             .20             100
                                                                                    (12 minutes)
                                --------------------------------------------------------------------------------
    Total......................  ..............  ...............  ..............  ..............       1,072,600
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

5. Capital Costs

    There are no capital costs associated with this collection of 
information. For notifications to FDA, manufacturers, repackagers, 
wholesale distributors, and dispensers will be accessing and using a 
system controlled by FDA. For notifications of immediate trading 
partners, manufacturers, repackagers, wholesale distributors, and 
dispensers will be using current mechanisms, which might include, but 
are not limited to, posting of notifications on a company Web site, 
sending an email, or mailing or faxing a letter or notification.

III. Comments

    Interested persons may submit either electronic comments regarding 
this document to http://www.regulations.gov or written comments to the 
Division of Dockets Management (see ADDRESSES). It is only necessary to 
send one set of comments. Identify comments with the

[[Page 33568]]

docket number found in brackets in the heading of this document. 
Received comments may be seen in the Division of Dockets Management 
between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to 
the docket at http://www.regulations.gov.

IV. Electronic Access

    Persons with access to the Internet may obtain the document at 
http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm, http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/default.htm, or 
http://www.regulations.gov.

    Dated: June 4, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-13544 Filed 6-10-14; 8:45 am]
BILLING CODE 4160-01-P