Pharmaceutical Distribution Law takes effect

President Obama signed into law the Drug Quality and Security Act, which contains provisions for tracing pharmaceuticals in the supply chain.The new law creates a uniform, national licensing standard for wholesale distributors and third-party logistics providers to safeguard the pharmaceutical distribution system. “It replaces the fragmented and piecemeal system that differed from state-to-state,” said the International Warehouse Logistics Association, which supported the legislation.

The law also sets uniform national licensing standards for warehouse-based 3PLs, preempts existing state licensing requirements for 3PLs, and preempts all state laws, regulations and requirements for tracing products through the supply chain.

“When dealing with supply chain security and safety, the influence stems from being recognized as an equal partner to the pharmaceutical manufacturers, primary and secondary wholesalers and distributors and pharmacies. By working with everyone in the sector, supporting both needs, we become stronger,” said Pat O’Connor, IWLA’s Washington representative.

IWLA explained the traceability system is “based on an ownership model whereby transaction information is provided upon a change of ownership rather than a change of possession. The traceability obligations require businesses to provide transaction information, history and statements, to each subsequent owner, and keep transaction information for six consecutive years following the transfer.”

This distinction is important to IWLA’s members in defining the title holders of stored products.
“Having one set of standards for 3PLs who handle pharmaceuticals in the supply chain set at the federal level is a significant milestone for third-party logistics providers, who have never received formal recognition by the federal government in the form of documented legislation,” the association said.

“This is the first federal statute to contain a strong definition of a 3PL’s place in the supply chain,” O’Connor said. “The impact is now we can point to this law on other issues affecting 3PLs.