Transcript Slide 1

Pedigree Laws and
their Impact on the
Animal Health Industry
Annual Update
Randy Lewis
MWI Veterinary Supply Co.
Manager of Compliance & Regulatory Affairs
Background Information
In 1987, The Prescription Drug Marketing Act (PDMA) was enacted.
The main goals of this act were:
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Ban the sale of drug samples
Ban re-importation
Require state licensing of wholesale distributors
Pedigree – This requirement was stayed until December 1, 2006.
FDA Counterfeit Cases Opened 1997 - 2006
FDA & NABP Activities
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February 2004 – FDA issues a report entitled “Combating Counterfeit
Drugs: A Report of the Food and Drug Administration.” NABP develops the
Model Rules for the Licensure of Wholesale Distributors.
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March 2005 – At the request of the FDA, NABP publishes a revised version
of the Model Rules for the Licensure of Wholesale Distributors. The revision
addressees more stringent state licensing requirements and calls for the
pedigree requirements.
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May 2005 – FDA publishes the annual update on the “Combating
Counterfeit Drugs: A Report of the Food and Drug Administration.” The FDA
summary applauds the efforts of the NABP toward tighter control of
wholesale distributor licensing. FDA keeps a “wait and see” attitude towards
the federal pedigree date of 12/1/06.
FDA & NABP Activities
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February 2005 – NABP Launches the Verified Accredited Wholesale
Distributor (VAWD) program.
May 2005 – IN Governor signs licensing bill mandating VAWD.
February 2006 – NABP accredits the first 2 VAWD wholesale distributors.
June 2006 – FDA announces that the stay of the pedigree provision will be
lifted December 1st 2006. Pedigree required for all non-ADR transactions.
November 2006 – FDA issues an industry compliance guide for PDMA
pedigree implementation.
December 2006 – A group of secondary wholesalers are granted a
temporary injunction regarding specific provisions of the pedigree
requirements.
PDMA Pedigree Requirements
203.50 Requirements for wholesale distribution of prescription drugs:
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(a) Identifying statement for sales by unauthorized distributors. Before the completion
of any wholesale distribution by a wholesale distributor of a prescription drug for
which the seller is not an authorized distributor of record to another wholesale
distributor or retail pharmacy, the seller shall provide to the purchaser a statement
identifying each prior sale, purchase, or trade of such drug. This identifying statement
shall include:
(1) The proprietary and established name of the drug;
(2) Dosage;
(3) Container size;
(4) Number of containers;
(5) The drug's lot or control number(s);
(6) The business name and address of all parties to each prior transaction involving
the drug, starting with the manufacturer; and
(7) The date of each previous transaction.
Court Injunction?
What is affected by the preliminary injunction?
21 CFR § 203.50(a). The court order enjoins FDA from implementing 21
CFR § 203.50(a). 21 CFR § 203.50(a)(6), states that information regarding
“each prior transaction involving the drug, starting with the manufacture” be
included in the pedigree. However, while the preliminary injunction is in
effect, pedigrees shall include information regarding prior transactions going
back to the manufacturer or the last ADR that sold, purchased, or traded the
prescription drugs. FDA encourages wholesalers to include information
regarding each prior transaction going back to the manufacturer when that
information is available.
Court Injunction??
What is not affected by the preliminary injunction?
Pedigrees still must be passed by non-authorized distributors of record
(non-ADR) prior to each wholesale distribution. In addition, the court does
not mention other pedigree-related regulations or other agency-issued
documents relating to the pedigree requirement. Accordingly, those
regulations and documents are not affected by the preliminary injunction.
Court Injunction???
The group of wholesalers that filed the injunction against the FDA are NOT
trying to have the courts dismiss pedigree entirely. All the members involved
in this suit have fully functional compliant pedigree programs. The law suit is
focused at how far back in the supply chain a pedigree must originate, and
who must provide a pedigree.
The FDA issued a compliance guide on 12/18/06 regarding the injunction.
On 2/1/07, the FDA filed an appeal concerning the temporary injunction.
This appeal process could take several months before any resolution may
be reached.
Authorized Distributor of Record
The PDMA requires distributors to pass a pedigree on all transactions that
they are not the authorized distributor of record (ADR).
ADR status is obtained by entering into a written agreement with the
manufacture to distribute all or specific products. The manufacturer must
maintain a list of all ADR distributors.
Other Legislation
Pharmaceutical Market Access and Drug Safety Act of 2007 (Introduced in
House)
H.R.380
Title: To amend the Federal Food, Drug, and Cosmetic Act with respect to the
importation of prescription drugs, and for other purposes.
Sponsor: Rep Emanuel, Rahm [IL-5] (introduced 1/10/2007)
Cosponsors (89)
Related Bills: S.242
Latest Major Action: 2/2/2007 Referred to House subcommittee. Status:
Referred to the Subcommittee on Commerce, Trade and Consumer Protection.
Other Legislation
Tim Fagan’s Law
H.R.2345
Title: To amend the Federal Food, Drug, and Cosmetic Act to increase criminal
penalties for the sale or trade of prescription drugs knowingly caused to be
adulterated or misbranded, to modify requirements for maintaining records of the
chain-of-custody of prescription drugs, to establish recall authority regarding drugs,
and for other purposes.
Sponsor: Rep Israel, Steve [NY-2] (introduced 5/12/2005)
Cosponsors (14)
Related Bills: H.R.1396, S.1978
Latest Major Action: 5/23/2005 Referred to House subcommittee. Status: Referred
to the Subcommittee on Health.
What Would This Mean?
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These legislative changes would strike the exemption from pedigree for
manufacturers and ADR’s.
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California will require electronic pedigree from manufacturer through all
distributions in 2009. Other states have addressed ADR and “normal chain
of distribution.”
VAWD
Indiana requires all wholesalers licensed in their state to become VAWD certified. VAWD stands
for the Verified Accredited Wholesale Distributor certification. All current license holders must
attain this status by the renewal period of 9/30/07. All new license applicants must achieve VAWD
status prior to issuance of a wholesaler permit by the board.
The process includes among others; a $100,000 surety bond, background checks, designated
representative, review of standard operating procedures (SOP’s), and a complete facility
inspection.
Facilities must pay an initial $5000 application fee, a $1000 annual fee, and a $5000 re-inspection
every three years.
As of 4/16/07, 95 facilities have successfully completed this VAWD process.
Other states may require this VAWD accreditation as new legislation is enacted. CO, ID, MD, ND,
OK, and OR among others have referenced VAWD in some manner in their legislation.
VAWD
Oregon – Adopted rules 12/19/06
855-065-0006
Registration Requirements
(5) Any wholesale distributor located outside the boundaries of Oregon, applying for registration or reregistration, as a Class 1 Wholesaler, after January 1, 2008 must provide evidence of one of the
following:
(a) A current license or registration as a wholesale distributor in a state that has a license or
registration procedure approved by the Board that included a physical inspection within the past
three years; or
(b) A current accreditation by a process approved by the Board such as The National Association of
Boards of Pharmacy’s Verified Accredited Wholesale Distributor (VAWD) program or other
nationally recognized accreditation program or contract inspection service.
VAWD
North Dakota – Passed Legislation. Meeting 5/17/07 to discuss draft proposed rules.
43-15.3-04. Requirements to distribute prescription drugs.
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A person may not engage in wholesale distributions of prescription drugs without, after
December 31, 2007, obtaining and maintaining accreditation or certification from the
national association of boards of pharmacy's verified accredited wholesale distributor or an
accreditation body approved by the board under subsection 4, obtaining and maintaining a license
issued by the board, and paying any reasonable fee required by the board.
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The board may adopt rules that permit out-of-state wholesale drug distributors to obtain a license
on the basis of reciprocity if an out-of-state wholesale drug distributor possesses a valid license
granted by another state and the legal standards for licensure in the other state are comparable to
the standards under this chapter and the other state extends reciprocity to wholesale drug
distributors licensed in this state. However, if the requirements for licensure under this
chapter are more restrictive than the standards of the other state, the out-of-state
wholesale drug distributor must comply with the additional requirements of this chapter to
obtain a license under this chapter.
Pedigree Requirements by State
WA
ME
VT
MT
ND
MN
NH
OR
ID
SD
CT
MI
WY
PA
IA
NE
NV
IL
UT
VA
NC
TN
AZ
OK
NM
SC
AR
MS
Blue = Passed,
rules pending
AL
GA
LA
TX
FL
AK
Yellow = Proposed
Red = None
OH
WV
HI
RI
NJ
KY
MO
CA
Green = Passed
IN
CO
KS
Pink = Passed
and/or rules
adopted
MA
NY
WI
DE
MD
DC
Other State Activities
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Surety Bonds – AZ, CO, FL, IN, NV. $100,000 per facility.
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Designated Representative – Pharmacy exam knowledge CA, FL. Financial
background checks, fingerprints, minimum experience requirements.
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Require out-of-state entities to become licensed by the state. NJ and NE
previously did not require licensing of non resident wholesalers.
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Nevada – Electronic monthly reporting of all pedigree transactions effective
2/15/07.
Summary
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The PDMA pedigree is here to stay. Although the injunction was granted on
certain elements, the pedigree provision is still in effect. Today, any
wholesaler who is not the ADR must pass pedigree including all
transactions back to the manufacturer or last ADR.
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States are rapidly passing pedigree and other wholesaler legislation. States
may pass laws which are more stringent than the federal PDMA. Florida
and Indiana are examples of states that require additional information to be
included for pedigrees in their states.
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For additional information on the federal PDMA please visit the following
link:
http://www.fda.gov/cder/regulatory/PDMA/default.htm#relevantguidances
DEA Update
FDA Inspections
State Issues
Ronald W. Buzzeo, RPh
Chief Regulatory Officer
BuzzeoPDMA
Dendrite Regulatory Compliance
804.267-1740 x120
[email protected]
The Changing Landscape
Yesterday vs. Today – What is Driving Change
Increased Federal Oversight
• FDA
– PDMA
• DEA
• US Attorney
Increased State Oversight
• Regulatory Boards
– Drug Distributor Licensing
– Drug Pedigree
– Stricter Guidance on Wholesale Drug Distribution
– Theft and Loss Reporting
Objectives
To discuss and better understand the:
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DEA Issues
PDMA Issues
State Regulations
Penalties
DEA Requirements
DEA Requirements/Regulatory Issues
Registration
– Signature
– Type of Registration
– Activities
• Research, Distribution and Manufacturing
Security
– Access
– Employee Theft
– In-Transit Losses
Inventories
– Accuracy
DEA Requirements/Regulatory
Issues
Records
– Data Elements
• Name, Address, DEA Registration Number
• Drug, Strength, Form, Quantity, Number of Commercial Containers
– Schedule II
• DEA Form 222
• Distribution/Receiving Record
Reporting
– Thefts and Losses
– ARCOS
State Issues, Policy & Regulatory
Requirements
Drug Pedigree Update
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Federal Requirements
State Requirements
Federal – Statutory Requirements
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Wholesale Distributors; guidelines for licensing
Manufacturer and Authorized Distributor of Record (ADR)
ADR – Ongoing Relationship
Statement Identifying each prior sale (currently back to last ADR)
– Date of Transaction
– Names and addresses of all parties to the transaction
Federal – Regulatory Requirements
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21 C.F.R. § 203 and 205
FDA’s appeal filed 2/1/07
Defines ongoing relationship
Establishes information required on pedigree (while injunction in effect)
– Last ADR handling drug
– Business name and address of all parties to each prior transaction starting with
the manufacturer traceable back to the last ADR
– Date of each previous transaction back to ADR
69 FR 12792 – March 18, 2004 – delayed effective date.
71 FR 34249 –June 14, 2006 – effective date Dec. 1, 2006
RxUSA Wholesale Inc. et al vs. Department of Health and Human Services CV 065086 (E.D.N.Y. December 4, 2006) Order granting preliminary injunction
FDA filed Notice of Appeal on February 1, 2007
Wholesale Drug Distributor
State Pedigree
States with Enacted & Proposed
Legislation Relative to Drug Pedigrees
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17 states with statutes and/or regulations addressing drug pedigree or
equivalents
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14 states with pending legislation on drug pedigree or equivalents
WA
ME
MT
ND*
MN
OR
ID*
NY
WI
SD*
WY
RI
MI
PA
IA
NE
NV
UT
MA
CT
IL
IN
MD
OH
WV
CO
KS
CA
MO
DE
DC
VA
KY
NC
Drug Pedigree
States with Enacted
and/or Pending Laws
(updated April 23, 2007)
TN
AZ
OK
NM
SC
AR
MS
AL
Federal
GA
LA
TX
FL
AK
Passed Legislation or
Regulation
HI
Pending Legislation or Regulation
Passed and Pending
Legislation or Regulation
•- Newly passed legislation not effective until July 1, 2007
Changes in Passed/Enacted
Pedigree Legislation
50 States & the District of Columbia
Total to Date 31
25
20
1)
Includes states with pending
legislation on or before 7/1/2007.
2)
Does not include effective state rule
making or enforcement activities
(subject to change)
15
15
10
9
7
5
0
2005
% Change per year
2006
2007
2005-2006
128/%
2008
2006-2007
94%
2009
61% of all States & DC have passed
Pedigree Legislation
• Who Prepares the Drug Pedigrees?
• Do Samples require a Pedigree?
Pedigree Impact to Veterinary
Wholesalers/ Distributors
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Meeting federal criteria on ADR status – vendor relationship and agreements
Recordkeeping provisions
Completing manual and electronic pedigree papers specific to state
requirements
Handling drop shipments and complying with state pedigree
Authentication Process – random, every transaction
Returns Processing
Credits on Returns
Potential audits – federal and state
Repackaging activities
Florida Pedigree Concerns –
Impact to Industry and Authority
Status of Florida Senate Bill 2122 Revisions
– As of 4/13/07 in Agriculture Committee
– Addresses industry and Department of Health concerns
– Language variation on “Persons required to have Limited Prescription Drug
Veterinary Wholesaler Permit”
Industry Concerns
– Parent company and limitation of related entity product transfers
– Delay of primary application approvals
– Potential denial of existing registration applications
Department of Health Concerns
– Potential for unregulated transfers
Licensing Requirements
State Licensing Requirements for
Distributors
Some states are exempting manufacturers and/or third party distributors from these rules
– Extensive application and criminal background check of applicant
• All senior personnel involved in the facility operations
• Expense of applicant
– Surety bond of not less than $100,000
– Pedigree Requirement
– Pedigree Authentication – Routine and Random
– Designated Representative
– Authorized Distributor of Record
– Shipment Examination
– Routine Facility Inspections
– States beginning to implement VAWD (Indiana, Oregon, North Dakota)
– Licensing
• In-state
• Out-of-state
Licensing Requirements
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What states requires licensing for sales reps?
– What type of drugs?
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What state requires the employer to provide info on the sales reps?
– What type of drugs?
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My distributor takes possession, do they require state licenses?
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We distribute samples to veterinarians, do we require state licenses?
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How many state licenses are required?
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I am a virtual company yet perform no marketing or sales do I require state licenses?
How many?
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I am a virtual company and perform marketing and sales do I require state licenses?
How many?
Distributor Requirements Rx and
Controlled
WA
MT
ND
ME
VT
MN
NH
OR
ID
WI
SD
RI
CT
MI
WY
PA
IA
NE
IL
NV
UT
MA
NY
IN
OH
DE
MD
WV
CO
KS
NJ
DC
VA
KY
MO
NC
CA
TN
AZ
OK
NM
SC
AR
MS
TX
AL
GA
LA
FL
AK
Registration not required
HI
PR
Registration required
Industry Requirements for State
Compliance
Wholesale Drug Distributor Registrations
– Increased requirements for fingerprinting, surety bonds, release of personal
information
State Pedigree Requirements
– Distributing human drugs to the veterinary market
– Lack of veterinary labeled products, specific to human use
– Registration Verification
VAWD Accreditation
– Concerns on NABP meeting State issued mandates for certification
• Indiana
• Oregon
• North Dakota
Penalties
Penalties
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Failure to Make a report on a Conviction – NMT $100,000
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Provides Information – Waiver of Penalty
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Conducts an Investigation – Waiver of Penalty
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Person Provides Info – ½ the Criminal Fee – NMT $125,000
State Penalties
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State Penalties for Noncompliance
Selling and/or distribution without the appropriate registration may be subject to
fines, penalties, misdemeanor or felony convictions and/or seizure of product
– Sales Reps may have product confiscated, fined
Company penalties range from $50-$50,000 per violation per day
– Violation Examples
• Failure to obtain a registration
– Florida – third degree felony; imprisonment up to 5 years and a $5,000
fine
– Indiana – Class D felony; 3 yrs. maximum imprisonment and $10,000
fine
– North Dakota – Class C felony; imprisonment up to 5 years and
$5,000 fine
• Noncompliance with state requirements (i.e., recordkeeping, inventories)
State Penalties for Noncompliance
with Pedigree
Colorado
– Colo. Rev. Stat. § 12-22-806 - Penalty.
– (1) A person who engages in the wholesale distribution of prescription drugs
in violation of this part 8 shall be subject to a penalty of up to fifty thousand
dollars.
– (2) A person who knowingly engages in the wholesale distribution of
prescription drugs in violation of this part 8 shall be subject to a penalty of up
to five hundred thousand dollars.
State Penalties for Noncompliance
with Pedigree
Florida – Offense Severity Ranking Chart
Florida Statute
Felony Degree
Description
499.0051(1)
3rd
Failure to maintain or deliver pedigree papers.
499.0051(2)
3rd
Failure to authenticate pedigree papers.
499.0051(6)
2nd
Sale or delivery, or possession with intent to
sell, contraband legend drugs.
784.07(2)(b)
3rd
Battery of law enforcement officer, firefighter,
intake officer, etc.
316.193(2)(b)
3rd
Felony DUI, 4th or subsequent conviction.
499.0051(3)
2nd
Forgery of pedigree papers.
499.0051(4)
2nd
Purchase or receipt of legend drug from
unauthorized person.
499.0051(5)
2nd
Sale of legend drug to unauthorized person.
State Penalties for Noncompliance
with Pedigree
Iowa
– Class C Felony
Idaho
– Unknowing Violations. If a person unknowingly engages in the wholesale
distribution of prescription drugs in violation of this act, the person may be fined
not more than ten thousand dollars ($10,000).
– Knowing Violations. If a person knowingly engages in wholesale distribution of
prescription drugs in violation of this act, the person shall be imprisoned for any
term of years, or fined not more than five hundred thousand dollars ($500,000), or
both.
State Penalties for Noncompliance
with Pedigree
Wyoming
– If a person unknowingly engages in the wholesale distribution of prescription
drugs and acts in violation of subsection (n) of this section, the person may be
assessed an administrative penalty not to exceed fifty thousand dollars
($50,000.00);
– If a person knowingly engages in wholesale distribution of prescription drugs in
violation of subsection (n) of this section, the person may be assessed an
administrative penalty not to exceed five hundred thousand dollars ($500,000.00).
Questions & Answers
Securing the Supply Chain:
Pedigree Update – Trends and
The Henry Schein Experience
Nancy F. Lanis, Esq.
Vice President, Regulatory and Legal Affairs
AVDA Annual Conference
May 1, 2007
Topics
• Pedigree Trends
• The Henry Schein Experience
Pedigree Trends
Pedigree Trends
•2003: FL
•2004: CA
•2005: AZ, NV, VA, TX, IA, OK, CT, IN,
MS, NJ
•2006: OR, NE, CO, VT, NM
•2007 (YTD): MD, ND, SD, ID, WY
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8
7
6
5
4
3
2
1
0
2003
2004
2005
2006
2007
Pedigree Trends - VAWD
12
States that Require VAWD
•2005: IN
•2007: ND
10
8
Required
6
Recognize
4
2
0
2004 2005 2006 2007
States that Recognize VAWD by
Policy
•2005: OK, ID
•2006: AK, CO, CT, DE, IA, MA, MS,
MT, NE, OR, SD, SC
•2007: NV
By Policy – means that the state that recognizes VAWD accredited or third party
accredited facilities as meeting their state licensing requirements.
Pedigree Trends – VAWD
Wholesalers Accredited
60
50
40
30
VAWD Accredited
Wholesalers
20
10
0
2004
2005
2006
2007
VAWD Program was launched by the NABP in February 2004 with the introduction of Model
Rules. It became required in Indiana in 2005.
Pedigree Trends
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Prescription Drugs, no OTC, no Medical Devices
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Human vs. Veterinary
The following 7 states listed below require a pedigree for all drugs because
there is no distinction between veterinary or human drugs:
– Oregon
– Arizona
– Texas
– New Mexico
– Colorado
– Nevada
– New Jersey
Pedigree Trends
Mfr/ADR/Wholesaler Role
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The trend has been that the pedigree starts with the first wholesaler. CA is
the only state where pedigree starts with the manufacturer.
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Most states impose pedigree requirements to non-ADRs (out of Normal
Distribution). FL requires pedigree for all transactions.
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Federal pedigree rules required pedigree back to mfr. Because of injunction
PDMA currently requires back to last ADR.
Pedigree Trends
• Authentication
– PDMA – No Authentication
– Enacted States – Allow for Random Authentication
– Introduced Legislation – Some require 100% Authentication (i.e.
Georgia, Texas)
• Designated Representative
18 out of 21 States that have enacted pedigree rules require a
Designated Representative.
Pedigree Trends
Paper vs. Electronic
State
Allows Paper & Electronic
Electronic Only
FL
2006
2009
CA
N/A
2009 (2011?)
NV
2007
CO
2007
ID
2009
IN
2006
MD
2010
NE
2008
NV
2006
ND
2009
SD
2009
TX
2007
FEDERAL
2006
No Date Given
Pedigree Trends
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Due Diligence – The following require Supplier Due Diligence SOPs.
– FL
– VAWD
– PDMA
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Surety Bond
15 out of 21 States that have enacted pedigree rules require a Surety
Bond.
Pedigree Trends
Returns
– Florida – All returns must be listed on pedigrees if the wholesaler was
not notified within 7 days of shipment that the product will be returned.
– Nevada – Products returned from a wholesaler requires a pedigree.
– PDMA – Pedigrees must be sent if the product leaves the normal
distribution channel.
– The following states follow the PDMA Model:
– Idaho
– Maryland
– Wyoming
Pedigree Trends
Drop Ships
– Florida – Pedigrees must be sent to the customer within 14 days
of shipment.
– Maryland – Pedigrees not required if it follows the normal chain
of distribution.
– PDMA – Pursuant to 21 CFR Section 203.5, the non-ADR seller
must provide a pedigree to the purchaser.
– PDMA INJUNCTION –Pedigree should include dates of all listed
transactions and the names and addresses of all parties involved
in all of those transactions. FDA recommends the lot or control
number, dosage, and number and size of prescription drug
containers also be included.
The Henry Schein
Experience
The Henry Schein Experience
Customers
Technology
Implementers
Regulators
HSI Multifunctional
Task Force
Purchasing
HSI Mu
Operations
IT
Regulatory Affairs
Suppliers
Employees
Trade
Association
The Henry Schein Experience
Henry Schein was recognized by the NABP and Indiana Board of Pharmacy
for being the nation’s first wholesale drug distributor to earn VAWD
accreditation across the Company’s key distribution centers.
The Henry Schein Experience
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RFID/Serialization (Track and Trace of Products)
– Pilot Project with Department of Defense. As part of the DoD mandate,
HSI will combine RFID technology with EDI transaction sets to transmit
key shipment data to select DoD facilities.
The Henry Schein Experience
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Anti Counterfeit Awareness Training of Distribution Center Personnel
– Provide guidelines to assist in identifying possible counterfeit drugs and
to establish prompt and effective methods to notify appropriate
government agencies when counterfeit or unlawful drug product is
discovered.
The Henry Schein Experience
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Industry Conference Calls:
– Regulatory representatives of a cross section of wholesalers located
around the country.
– Share industry intelligence on developing legislation, regulation and
related industry affairs.
– Networking tool (periodic as needed, recently weekly).