FDA Proposes New Rules for the Pharmaceutical Supply Chain

In February 2022, FDA proposed new rules for the licensure of wholesale drug distributors (WDDs) and third-party logistics (3PL) providers. These rules, if approved, would amend 21 CFR parts 10, 12, 16, and 205. Click here for the text.

If approved in their current form, FDA’s new rules would not only expand the class of persons subject to licensure, but also preempt many state and local licensure requirements, setting a more comprehensive federal licensure scheme. The rules are open to public comment through June 6, 2022

Some highlights:

  • FDA would end its prior carevout that had permitted different state licensing rules and laws for wholesale distributors and 3PL providers. Instead, FDA has opted for a uniform national standard. FDA believes this shift will bolster public confidence in the quality and control environment for drugs by ensuring that supply chain participants are sufficiently vetted and qualified for product distribution. States may still continue to oversee separate licensing for 3PL providers and wholesale distributors, although only so long as their rules are the same as FDA’s rules. State laws and regulations unrelated to licensure (for example, criminalizing certain conduct by employees of wholesale distributors or 3PL providers), would remain unaffected.
  • FDA would impose minimum standards for the approval and accreditation of third-party licensure and inspection organizations. 
  • One area where state regulations might survive is in regard to who might be a “designated representative.” The definition proposed by FDA leaves potential room for state rules and regulations as to who can serve in such a position, like Florida’s testing requirement.  
  • The proposed new rules would furnish greater clarity on what constitutes a “facility,” to include a permanent physical location that is used to store or handle prescription drugs, while excluding a corporate office or headquarters the sole activity of which is oversight, support, or administration. What remains in doubt is whether entities that do not take physical possession of drugs may still nonetheless constitute entities satisfying the definition of a wholesaler or distributor, like a broker.
  • Last although not least, FDA’s new rules include more robust requirements for recordkeeping and document maintenance, and written policies and procedures. 

The pharmaceutical industry, and life sciences in general, continue to confront a dynamic and changing regulatory environment. Working with practical and experienced counsel, like the attorneys at Baker Jenner, can be a significant benefit to your business as you plan and consider transactions. Contact us today to begin.

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