FDA Grants Exemption to Connected Trading Partners: What It Means for Small Wholesale Distributors

FDA Grants Exemptions Beyond the Stabilization Period

As the pharmaceutical industry works toward full compliance with the Drug Supply Chain Security Act (DSCSA), the FDA's recent guidance granting exemptions to certain trading partners has raised important questions. This guidance, which offers relief from some of the enhanced drug distribution security requirements under Section 582 of the FD&C Act, is a significant step toward ensuring the continued flow of medicines while maintaining progress toward full DSCSA implementation.

For small wholesale distributors like LANDSTAR DRUGS & WHOLESALE LLC, the FDA’s exemption provides a temporary solution for companies working diligently to establish EPCIS (Electronic Product Code Information Services) connections but encountering difficulties in exchanging data with trading partners.

What Does the Exemption Cover?

The FDA’s guidance grants an exemption to trading partners who have either successfully completed or made documented efforts to establish data connections with their immediate trading partners. This exemption applies to certain trading partners, including manufacturers, repackagers, wholesale distributors, and dispensers, allowing them to transact products while facing challenges in exchanging data.

The key here is documented efforts—if a company is actively working to connect with its trading partners, even if the data exchange is not fully functional, they can benefit from the exemption. The FDA acknowledges that while much progress has been made, not all partners are yet fully compliant. By providing this exemption, the FDA aims to prevent supply chain disruptions and ensure that patients continue receiving their medications without delay.

Who Is Eligible?

This exemption is primarily for trading partners who have:

• Established or made efforts to establish data connections with their immediate partners.
• Documented these efforts in a way that shows good faith attempts to comply with DSCSA requirements.

It is important to note that both parties involved in the data exchange must be making these efforts. If one partner is unresponsive or unwilling to establish a connection, this could limit the applicability of the exemption.

For small wholesale distributors, like our company, this guidance offers a degree of flexibility in the face of challenges that are often outside of our control, such as delays or technical difficulties with trading partners. However, this does not exempt us from making ongoing, genuine efforts to comply.

How Long Does the Exemption Last?

The exemption varies by trading partner type:

• Manufacturers and repackagers: Exempt until May 27, 2025.
• Wholesale distributors: Exempt until August 27, 2025.
• Dispensers with 26 or more full-time employees: Exempt until November 27, 2025.

This timeframe provides a temporary cushion for trading partners working to establish connections, but it’s critical to continue pushing toward full compliance during this period.

How Should Small Distributors Proceed?

If you are a small distributor like us, documenting your efforts to establish EPCIS connections is crucial. Keeping detailed records of communication, connection attempts, and any challenges you face will help demonstrate your good faith efforts and secure your eligibility for the exemption. It is also important to stay in communication with your trading partners and encourage mutual efforts to comply.

While this exemption provides relief, it is not a long-term solution. The ultimate goal is full compliance with DSCSA by the expiration dates provided, so I encourage all industry partners to use this time to strengthen their data exchange systems.

Disclaimer: I am not an attorney, and this article should not be considered legal advice. Every organization has unique circumstances, and I recommend consulting with your legal counsel to assess how this FDA guidance applies to your specific operations.

As a DSCSA Compliance Manager, my goal is to share insights and foster discussion around these evolving regulations. Feel free to share your thoughts or experiences with this exemption—I'd love to hear any differing interpretations or challenges you’ve encountered with DSCSA compliance.