FDA Issues Proposal on Drug Supply Chain Security Act 3PL Licensing Standards
FDA is issuing its long-awaited proposed rule on standards for licensing of third-party logistics providers and wholesale distributors under the Drug Supply Chain Security Act (DSCSA). As expected (see 1708210034), the proposal’s definition of 3PLs includes only warehousing and 3PLs that take direct possession at a “facility,” exempting carriers engaged only in transportation from licensing requirements.
Under the proposed rule, released Feb. 3, wholesale distributors and 3PLs must obtain a license for each of their facilities from the state in which they are located, or obtain a license from FDA if no state licensing scheme is in place. The proposal sets standards for state licensing requirements, preempting any that are more stringent or burdensome than outlined in the standards, and harmonizes requirements between states. Comments on the proposed rule are due June 6.
“Requirements for wholesale distributors currently vary significantly across State lines, and many wholesale distributors and 3PLs have facilities in multiple States,” the proposed rule said. “Specifically, State requirements and standards for licensure can vary on 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; and inspection and approval requirements by certain, specific organizations in order to receive licensure in certain States. This proposed rule, when finalized will be an important first step in harmonizing these requirements, thus allowing for greater compliance and management of licensure.”
The proposal also notes that states have implemented “disparate” 3PL licensing policies since passage of the DSCSA, and says FDA’s proposed licensing requirements, with some eliminating 3PL licensing as a separate category, and others creating new types of licenses for 3PLs, when “finalized, will provide certainty and clarity in the logistics industry.”
Soon after the DSCSA was enacted, some questions arose on what types of entities would be covered under the act’s 3PL provisions (see 13121725). The law defines 3PLs activities as warehousing and “other logistics services,” and forwarders were concerned the latter would subject them to licensing requirements if they transported drug products.
As announced in FDA guidance issued in 2017, the proposed rule clarifies that forwarders aren't subject to the licensing provisions, as long as the carrier doesn't take ownership or possession at a facility like a warehouse. “Other logistics services” means “services provided by entities that accept or transfer direct possession of products from that entity’s facility within the United States and its territories on behalf of a trading partner (e.g., manufacturer, wholesale distributor, dispenser), but that do not take ownership of the product or have the responsibility to direct a product’s sale or disposition,” FDA said.
“A common carrier that only transports a product, but does not take ownership of the product, is not conducting ‘other logistics services,’” the agency said.
The proposed rule also sets standards applicable to third-party organizations involved in the licensure and inspection process, which it deems “approved organizations” or “AOs.” It also addresses standards and requirements for approval of third-party accreditation bodies, as well as “inspection services or programs to conduct inspections of facilities used by wholesale distributors seeking licensure and to review the qualifications of 3PLs for licensure.”