Track-and-Trace Law Moves Forward In Congress

Congress is on a track to wrap up a national tracing system for pharmaceuticals, the Pharmaceutical Distribution Security Alliance (PDSA) reported last week. An amendment to the Federal Food and Drug Cosmetics Act would preempt states’ traceability mandates in creating a uniform standard for the pharmaceutical supply chain.
A draft bill released by the Senate’s Health Education Labor and Pensions (HELP) committee provides for a phased-in time line for serializing product, with an interoperable system for electronic unit-level product tracing required 10 years after the law’s enactment.
Manufacturers four years after enactment would be required to apply standard numerical identifiers (SNI, the NDC code with serial number) to each package, with the time lines for serializing and transferring and accepting only serialized product phased-in also for repackagers, wholesalers, 3PLs, and dispensers.
Both Houses of Congress in recent weeks have released lengthy bi-partisan drafts. The differences between the HELP bill and a draft bill from the House Energy and Commerce Committee are “highly bridgeable.  Both houses have indicated flexibility and are willing to negotiate,” said Vince Ventimiglia, of Faegre BD Consulting, an advisor to PDSA.
“We are being told the committees are refining their drafts and intend to do mark ups at the committee level in May,” with House marks up May 8 at subcommittee level and May 15 at the full committee level, after which the bill moves in June to the House floor for consideration. The Senate is on a similar time frame with HELP committee mark up some time prior to the Memorial Day recess, Ventimiglia said.
 “We are also getting very strong indications that the committee chairman would like to act before the August recess and send this legislation forward to the president,” he said.
The committees will negotiate to narrow differences between bills that  “very closely follow each other in structure (which should make the) conference mechanism much easier to happen and should facilitate final passage of the bills,” Ventimiglia added.
“We are very encouraged by the overall structure of both the House and Senate approaches. We think this is probably the most momentum and the biggest amount of progress and interest that we have seen from both houses of Congress in quite a long time,” said Elizabeth Gallenagh, vice president of government affairs and general counsel, HDMA.
The Senate bill sets out interim “Phase 1” lot-level tracing requirements in which supply chain parties upon change of ownership will be required to pass on transaction history and statements tracing back to the manufacturer in paper or electronic form.
Parties will be required to keep records of suspect products and respond promptly to officials in the event of an investigation. “However, instead of imposing one-size-fits-all requirements, requirements are tailored to the supply chain members to reflect the different and unique roles each sector plays in the pharmaceutical distribution supply chain,” a description of the bill on the HELP web site says.
The Phase 2 phase-in for accepting and transferring only serialized product includes repackagers after five years, wholesalers and 3pls after 6 years, and dispenser pharmacies after seven years.
In the Senate bill, the unit-level product tracing requirements are tied to guidance issued by HHS. The Secretary will hold a series of public hearings on areas including system attributes, standards, best practices, and costs, and to “assess whether electronic tracing requirements, including tracing of product at the package level, are feasible, cost effective, and needed to protect public health.” HHS will perform one or more pilots with the full chain assessing the use of the product identifier in an interoperable tracing system at the package level.
The major difference between the two bills relates to the Phase 2 timing and transition to unit-level tracing, Ventimiglia and Gallenagh said.
PDSA has provided to the committees its consensus position on Phase 2. “We have a high degree of confidence that our approach lands somewhere in the middle of the (two bills), and that the (differences) are bridgeable,” Ventimiglia said.
PDSA provided this summary of its position:
PDSA is of the position that if there are Phase II obligations that require unit level tracing, that all members of the supply chain participate in a Phase II unit level track and trace system.  Similarly, in a Phase II system under which everyone in the supply chain participates, all PDSA members support the requirement that the regulations for this Phase be informed by pilot projects, public meetings, guidance documents, and a GAO assessment.
Further, all PDSA members would recommend appropriate flexibility be given to the FDA so that today’s assumptions do not predetermine the outcome of what will be needed post-Phase I.  Finally, all PDSA members would need to see language that gives consideration to the special challenges facing dispensers, especially community pharmacies, and provides for some type of exemption should Phase II regulations prove to be unduly burdensome and lead to an economic hardship. 
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