Originally published on Dec 7, 2016.
In this post, we examine how the DQSA impacts State Licensing and discuss what is in store for the industry moving forward.
The DQSA has impacted State licensing for the pharmaceutical distribution industry in three significant ways:
1) State license standards cannot regulate 3PL’s as wholesale distributors
Early last month, Mississippi declared all current licenses relating to the manufacturer and distribution of pharmaceuticals “null and void.” It was a sweeping action that paved the way for the State Board to comply with requirements set forth by the DQSA. The DQSA specifically provides that a 3PL license must be independent to a wholesale license. Mississippi also created a new categorization, “Virtual Entity.” The specific categories for licensure in MS are: Wholesale Distributor, Manufacturer, 3PL, Re-Packager, Virtual Entity, Vet Distributor and Reverse Distributor.
Diabetic supply distributors and OTC distributors were markedly absent from a license category although the industry has taken steps towards requiring licensure for the business model. This includes the VAWD/VDIP/OptumRX policy change as well as states such as Washington.
2) License standards created by the State cannot be less stringent than Federal standards
It remains to be seen if, when and/or how the Hawaii, Alaska, Pennsylvania, Massachusetts and Puerto Rico will implement their “non-resident” wholesale distributors licensing standards and rules.
It is up for interpretation by the FDA whether or not they will require these states to require a “non-resident” license. In related news, the FDA has pushed back regulations on the new licensing standards back another six months, through June 2017. For reference, the law mandated that the FDA release these standards in November 2015, two years after enactment.
3) Transaction History requirements (Pedigree) cannot be more stringent than Federal requirements
Upon passage of the DQSA, both California and Florida (signed in 2005) mostly abandoned their versions of the pedigree/e-pedigree requirements.
This is a volatile time in the pharmaceutical distribution industry. Trust Five Rivers RX to navigate and accomplish all of your Federal, State and private organization Accreditation objectives.
About Five Rivers RX
Five Rivers RX is a leading pharmaceutical compliance services firm that uses experience, relationships and knowledge to develop custom solutions for their clients. The company provides numerous services including VAWD Accreditation, state Board licensing and federal registration consulting services. Five Rivers helps third-party logistic firms, distributors and manufacturer in the pharmaceutical industry focus on their supply chain while reducing costs, enhancing efficiency and improving quality. Five Rivers is committed to helping their clients thrive and to providing peace of mind.