Proposed Rule for the Licensure of WDDs and 3PLs published

Recommendation

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The U.S. Food and Drug Administration (FDA) has announced the availability of the proposed rule National Standards for the Licensure of Wholesale Drug Distributors (WDDs) and Third-Party Logistics Providers (3PLs). The proposed rule sets national licensing standards for both federal and state licensure for WDDs and 3PLs.

In a short summary of the FDA, it says that "the proposed rule, when finalized, would provide greater assurance that supply chain participants are sufficiently vetted and qualified to distribute prescription drugs, further strengthening the supply chain."

Background

The proposal goes back to the Drug Quality and Security Act (DQSA), which was enacted on November 27, 2013. The DQSA includes, besides others, provisions designed to strengthen the integrity of the pharmaceutical distribution supply chain, including the requirement of the FDA to establish by regulation national standards for the licensure of prescription drug wholesale distributors. 

Current Status

At present, the requirements for wholesale drug distributors vary significantly between individual U.S. states. The state requirements and standards for licensure can vary on different topics, such as

• The length of time for which records must be maintained
• Qualifications of facility managers and designated representatives
• Facility requirements
• Licensure duration
• Renewal procedures
• Exemptions from the definition of wholesale distribution
• Inspection and approval requirements by certain, specific organizations in order to receive licensure in certain States

All this leads to a patchwork of different regulations.

Replacement of the Current 21 Code of Federal Regulations, Part 205

The core of the new proposal is the replacement of the current 21 Code of Federal Regulations (CFR), Part 205. It provides guidelines for state licensing of wholesale prescription drug distributors. Furthermore, the proposal also intends to include certain conforming changes to other regulations.

The current version of 21 CFR, Part 205, which is not very extensive, is divided into the following sections:

• 205.1 – Scope
• 205.2 – Purpose
• 205.3 – Definitions
• 205.4 – Wholesale drug distributor licensing requirement
• 205.5 – Minimum required information for licensure.
• 205.6 – Minimum qualifications
• 205.7 – Personnel
• 205.8 – Violations and penalties
• 205.50 – Minimum requirements for the storage and handling of prescription drugs and for the establishment and maintenance of prescription drug distribution records.

The proposal is much more comprehensive and contains a whole series of very detailed requirements, as can already be seen from the table of contents:

• 205.1 – Scope
• 205.2 – Purpose
• 205.3 – Definitions
  
  Subpart A—Third-Party Logistics Providers Licensure Standards
• 205.4 – Requirement that third-party logistics providers be licensed
• 205.5 – General application requirements for licensure
• 205.6 – Federal licensure process
• 205.7 – Changes to information, location, or ownership of a licensed 3PL
• 205.8 – Expiry and renewal
• 205.9 – Licensure denial, suspension, reinstatement, revocation, and voluntary termination: notice and opportunity to request a hearing
• 205.10 – Good storage practices for 3PL facilities
• 205.11 – Personnel requirements necessary for good storage practices
• 205.12 – Required written policies and procedures
• 205.13 – Recordkeeping and document maintenance
• 205.14 – 3PLs must provide upon request a list of trading partners
• 205.15 – Requirements for initial and annual reporting to the Food and Drug Administration
• 205.16 – Inspections
  
  Subpart B—Approved Organizations for 3PLS
• 205.17 – Use of approved third-party organizations
  205.18 – General qualifications of approved organizations
  205.19 – Process and procedures for approval by the Food and Drug Administration
  
  Subpart C—Wholesale Distributors Licensure Standards
• 205.20 – Requirement that prescription drug wholesale distributors be licensed
  205.21 – Surety bond requirement
  205.22 – General application requirements for licensure
  205.23 – Federal licensure process
  205.24 – Changes to information, operation, location, or ownership of a wholesale distributor
  205.25 – Prohibited persons and qualifications for key personnel
  205.26 – National standards for the storage and handling of prescription drugs for wholesale distribution
  205.27 – Standards for the establishment and maintenance of records of the distribution of prescription drugs
  205.28 – Inspections
  205.29 – Requirements for initial and annual reporting to the Food and Drug Administration
  205.30 – Licensure denial, suspension, reinstatement, revocation, and voluntary termination—notice and opportunity to request a hearing
  
  Subpart D—Approved Organizations for Wholesale Distributors
• 205.31 – Use of approved third-party organizations
  205.32 – General qualifications of approved organizations
  205.33 – Process and procedures for approval by the Food and Drug Administration

Thus, the new Part 205 would implement the licensure requirements of the DSCSA and provide oversight of licensure of 3PLs and WDDs. All 3PL facilities would be required to obtain a 3PL license for each facility of such 3PL. Each WDD would be licensed by the State or the FDA.

The full text of the proposal and a detailed justification of each paragraph was published in the Federal Register (Vol. 87, No. 24 / Friday, February 4, 2022).

Comments and Next Steps

Comments on the proposed rule can be submitted until June 6, 2022 (120 days after publication). Further information on the commenting process can be found here.

The FDA plans to hold a webinar providing an overview of the proposed rule’s key provisions. This is intended to assist stakeholders in understanding the proposed rule and preparing comments.