Truth or Dare: Saleable Returns Verification deadline pushed from 2020 to 2023

A VRS scanning software for pharmaceutical supply chain

With the 2020 enforcement date almost there, the FDA has come up with yet another surprise after its 2019 announcement of a year’s delay. The - Saleable Returns Verifications compliance is pushed back enforcement until 2023- a three-year wait till all the stakeholders will get enforcement from the FDA. However, is it still a legal liability? Read below:

This was announced just a month after it had made another announcement in April 2020, exempting dispensers dealing with COVID-19 products from certain requirements under the Drug Supply Chain Security Act (DSCSA). As stated by the Regulatory Affairs Professionals Society, the FDA had said, “the guidance was meant to help ensure adequate distribution of prescription drug products throughout the supply chain to combat COVID-19.”

The Recent Verdict

As per reports published by the Healthcare Packaging, “FDA does not intend to take action against wholesale distributors who do not, prior to November 27, 2023, verify the product identifier prior to further distributing returned product as required under the DSCSA guidance… In addition, FDA does not intend to take action against dispensers who do not verify the statutorily-designated portion of product identifiers of suspect or illegitimate product before November 27, 2023. This policy represents a 3-year delay in enforcement of the requirements for dispensers to verify the product identifier when investigating suspect or illegitimate product.”

The Reason Behind

The main reason for the delay is said to be the COVID outbreak. FDA stated that it did not wish to disrupt the prescription drugs circulation because of the pre-requisites set by the healthcare agency, which would stop drug stakeholders from speedy delivery of medicines. “Moreover, the pandemic demands the re-assignment of logistics and supply chain experts from DSCSA matters to COVID-19 pandemic response,” emphasized FDA.

But is There More to it? The US Elections for Instance

The US Presidential elections clashing with the VRS compliance deadline could well have been a reason why the deadline was postponed. The uncertainty of the election’s outcome and the impact it might have on the healthcare regulations seems to have created an iota of doubt around the drug regulatory act.

Spearheaded by the Obama government, DQSA or the Drugs Quality and the Security Act was not received well by the Trump government, who considered it to be an “unnecessary” move. For those unaware, the DQSA and its Tier II- the Drug Supply Chain Security Act (DSCSA) outlines in details the steps for building an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.

However, the Trump Government had no hidden secrets about its opinion of the regulation and its intentions of “eliminating regulations that burden businesses regularly”. Trump had openly suggested that he wanted to “cut the red tape at the FDA: there are over 4,000 drugs awaiting approval, and we especially want to speed the approval of life-saving medications.”

As the election cloud deepens, speculations are rife that the Trump Government might not win it this time. But then, there would be someone else in its place with a fresh perspective and plan pertaining to the DSCA. So, FDA might be waiting to see things unfold and act accordingly, saving millions of dollars invested by companies in revamping their operational structure or buying new equipment to achieve the DSCSA goals.

Who Gets to Take the Advantage?

Wholesale distributors for product identifiers: Distributors were worried about the quarantined products that could lead to potential drug shortages if the VRS systems were arbitrarily out in place and were not efficient enough to verify product returns on time.

Their feedback was appreciated and considered by the FDA when it made the announcement on the bases of “industry-wide readiness for implementation of the verification of saleable returned product requirement for wholesale distributors and the challenges stakeholders face with developing interoperable, electronic systems to enable such verification router service and achieve interoperability between networks.”

It further justified the delay stating the various other challenges that stakeholders were facing due to the pressing deadline:

The negligibility of the volumes of the consignment used as a test case in the context of the real volume that needs to be managed. Stakeholders needed more time discovering how effectively they can handle the latter amid addressing the pandemic.

Is it still a legal liability?

As per the announced FDA guideline, “the agency does not intend to take action against” dispensers, manufacturers, 3PL, repackagers and wholesalers that were unable to verify the statutorily designated portion of product identifiers of suspect or illegitimate products before November 27, 2023”. Wholesalers, 3PL, dispensers, repackagers and manufacturers however, are still encouraged to still perform the saleable returns check, which is outlined in section 582 of the FD&C act, because it is still a liability issue. Meaning, you can still get sued for not following the law. So yes, it is still a legal liability.

Wholesale distributors for transaction statement: Also, don’t forget, Section 582 of the FD&C Act requires repackagers, wholesale distributors, dispensers and manufacturers to exchange transaction history, transaction information, and transaction statement- collectively known as the T3 information-for transactions related to certain prescription drugs. Going forward, section 581 of the FD&C Act requires transaction statements to include a statement that the entity transferring the ownership, in this case, the distributor, had systems and processes in place to comply with the DSCSA FDA standards. The FDA does not plan to persecute distributors who do not include this statement required under section 581.

How the Industry is Reacting to the Delay?

Some stakeholders are relieved, mostly because they were unable to cope with the increasing pressure of COVID and the need to fulfil the demand for prescription drugs. There are others who still believe that VRS is a pre-requisite for DSCSA compliance. However, none of them completely disavow VRS completely. So, here are some of the reactions in brief:

The industry needs a proper plan: We could not have agreed more, especially given the uncertain times, mired by the COVID and the US elections. VRS providers are said to be meeting to work toward DSCSA readiness. The agenda of the meeting would be solely to focus on VRS but may also address authorized trading partners and other requirements.

VRS cannot be ignored: Some stakeholders behold VRS as the industry’s top priority right now because it is the key to the future of drug traceability. With increasing chances of counterfeit drug circulation during COVID, removing VRS from the system or being unprepared for the same could add on to the volumes of fake drugs. Also, companies feel you still have a legal liability to confirm regardless of enforcement. The law is still a requirement.

Wouldn’t VRS become redundant in 2023?

That possibility is low because issues arising out of counterfeit drugs will continue to mire the drug industry. Moreover, the final milestone of DSCSA compliance is set in 2023, which makes VRS an important factor. The common consensus went above and beyond the apprehension of stakeholders who felt that VRS might not be necessary because wholesale distributors would at that time be performing their own verification for serial numbers.

On second thoughts, delay or no delay, VRS processes would need the help of third-party providers who can help drug supply chain stakeholders to achieve the final deadline set by FDA.

The end goal must always be remembered- to make the drug supply chain counterfeit-free in a fast and secured manner; So, the end-users get the right medicine at the right time. It is noteworthy that VRS compliance and DSCSA compliance is not just a regulation that needs to be followed, but they are meant for the greater good of mankind. Truth be told, it cannot be ignored or undermined at any cost. Dare to defy it and the entire drug industry will go back to square one.

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