Who regulates the prescription distribution companies in the US?

Answer 1

The National Coalition of Pharmaceutical Distributors (NCPD) strongly advocates a new approach to ensuring the safety of pharmaceutical distribution in the United States. Several members of NCPD were party to a suit in the Eastern District (New York) Federal Court, which resulted in a temporary injunction against FDA over so-called "pedigree" rules, which has been its method of preventing counterfeit pharmaceutical products from entering the supply chain. The problem, NCPD contends, is that FDA's rules, as written, would have left wide swaths of the supply chain unregulated and unmonitored, and would have resulted in a "death by regulation" of thousands of independent specialty distributors whose business is crucial to many retail pharmacies, small clinics and local hospitals.

Judge Joanna Seybert granted the temporary injunction, 06-CV-5086, against FDA's regulations under the Prescription Drug Marketing Act (PDMA), 21 CFR 203.50(a), on Dec. 8, 2006.

"Let us be perfectly clear: The independent specialty distributors represented by NCPD want a safe, secure distribution system for pharmaceuticals. It is vital that our businesses contribute to the safety and well-being of patients and consumers across the country," says Karen Moody, president of NCPD. "However, the manner in which FDA has gone about interpreting PDMA is poorly conceived, and has been compromised by the interests of the major pharmaceutical manufacturers and distributors. NCPD members, who are mainly small, family-operated local businesses, would have been destroyed by these rules-in fact; some of them have already closed their doors. The final irony is that there is expert analysis that the current pedigree system could be easily circumvented by counterfeiters, thus providing a false sense of security to the healthcare system."

Background

The recent suit against the FDA involved several legal issues, but revolved primarily around the concept of an "authorized distributor" (AD) of pharmaceuticals. The Prescription Drug Marketing Act (PDMA), which was originally passed in 1988, has many elements pertaining to how pharmaceuticals are marketed and distributed that are already in effect. PDMA defined a "pedigree" as a record (either paper or electronic) that identified where a product came from, and who is selling it. Sec. 21 CFR 203.50 of the law (as revised), defines an AD as someone who receives pharmaceutical product directly from the manufacturer. Under FDA's regulations, an AD would have been exempt from providing a pedigree to its customers. This exemption would exist regardless of where the AD obtained the product, even if they obtained the product from other non-AD distributors.

On the other hand, distributors who do not obtain their products directly from the manufacturer would have been obligated to provide pedigrees. However, these pedigrees can come only from manufacturers, or from the AD themselves. While ADs had stated that they would provide the necessary documentation, some of them have refused to do so, or have imposed extraordinary additional costs and decreased service levels for providing them.

"This entire regulatory scheme and the anomalous result that would occur if the Rule went into effect appears arbitrary," Judge Seybert stated in her opinion, and noted that while "the pedigree requirement was created to show where wholesale distributors were obtaining their drugs," the AD exemption "would essentially wipe out all the unauthorized distributors, leaving only [ADs] who are exempt from the pedigree requirement. So none of the drugs ultimately going to the American consumer would contain pedigree information because the drugs would be provided solely through [ADs] who are exempt from the requirement." And, she concluded, "this rule may drastically change how prescription drugs are distributed in this country and ultimately affect the cost to the consumer."

PDMA and the pedigree rules have had a tumultuous history. The same unfairness and arbitrariness of the system had been addressed as far back as 2001, with FDA essentially coming to the same conclusions that Judge Seybert has. However, the agency opted to re-impose the pedigree rules with the same gaps and shortcomings earlier this year.

"To have taken five years to hold off on imposing PDMA rules, and then to impose the same ones that were questioned in 2001 is inexplicable to us," says Moody. "The American healthcare system deserves better."

What should be done?

NCPD is reviewing the response from FDA in the aftermath of the judicial decision. In the meantime, the independent specialty distributors represented by NCPD will maintain the status quo of the pre 12/01 Federal reporting rules, or those states, which have their own pharmaceutical-distribution regulations in place.

Our members are already providing pedigrees that meet current Federal or state rules," says Moody. "We would like to see a system that either imposes the same requirements on all distributors (Universal Pedigree), or to mandate procedures that allow independent specialty distributors to continue their vital, life-saving activities without compromising patient safety."

About NCPD

The National Coalition of Pharmaceutical Distributors represents and promotes the value of small and independent pharmaceutical distributors with respect to legislatures, regulatory organizations, manufacturers, dispensers, and the community at large through rigorous advocacy in order to preserve the businesses of its members, to ensure distribution system efficiency and to uphold public safety.