So, You Think You're Exempt?

Published November 22nd, 2024?

DSCSA Deadline: Just Days Away?

The deadline for DSCSA stabilization is just days away, mandating Enhanced Drug Distribution Security (EDDS) requirements for manufacturers, repackagers, wholesale distributors, and dispensers. While the FDA announced an extension from certain components of the FD&C in the form of a phased approach, this extension only applies to certain eligible trading partners. Eligible trading partners include those who have either completed connections with immediate trading partners, or who have initiated efforts (with documented evidence) but could not complete them by the November 27th deadline.?

The phased approach to exemptions arose after industry stakeholders and House of Representatives members called for additional reform, emphasizing how a lack of government intervention can lead to drug shortages. The deadline for eligible trading partners is as follows:?

• Manufacturers and Repackagers: May 27th, 2025?

• Wholesale Distributors: August 27th, 2025?

• Large Dispensers (>25 fulltime employees): November 27th, 2025?

• Small Dispensers (<25 fulltime employees): November 27th, 2026?

In light of these exemptions, it’s important that we understand the details: who is and isn’t exempt, and from what specific requirements are eligible trading partners exempt from??

Who Is Actually Exempt? For How Long??

Unlike the 1-year stabilization period announced in August of 2023, this exemption only applies to certain eligible trading partners. To be eligible for the exemption, trading partners must have initiated their systems and processes in alignment with requirements outlined in section 582(g)(1) of the FD&C Act by the November 27th, 2024, start date. Section 582(g)(1) mandates the exchange of transaction data in an electronic and interoperable manner, implements procedures for product verification, and requires partners to keep transaction records in the case of a recall or in case product may be illegitimate or counterfeit. The announcement states,?

“In order to prevent confusion, the FDA made it very clear in their announcement who they consider eligible for the exemption; they stated, “eligible trading partners are those who have initiated their systems and processes by successfully completing data connections with their immediate trading partners and those who initiated processes including documentation of efforts to establish data connections but were not able to fully complete them with all immediate trading partners.”?

Additionally, this exemption “extends to trading partners throughout the pharmaceutical distribution supply chain who subsequently transact such product.” In other words, if a manufacturer is exempt and sends product downstream to a wholesale distributor, then that partner would be exempt for that product as well.?

It’s also important to highlight the specific regulations eligible partners are exempt from. The announcement clarifies eligible partners are only exempt from certain subsections of 582(g)(1), 582(c)(4), and 582(d)(4). These specific regulations are as follows:?

• Section 582(g)(1) (A-F) for manufacturers and repackagers, wholesale distributors, and dispensers with 26 or more full-time employees?

• Section 582(c)(4)(D) For Wholesale Distributors?

• Section 582(d)(4)(A)(ii)(II) and (B)(iii) for Dispensers with 26 of more full-time employees?

To read these specific requirements in full, click here. ?

How to Prepare for November 27th and Beyond?

With FDA inquiries and audits to confirm compliance on the horizon, here’s a few steps you can take to ensure you aren’t at risk:?

1. Confirm the “Who” and “What” of the Recent Exemption: Understand if you are eligible, and if so, from what specific regulations you are exempt from.??
2. Test your exchanges: Testing exchanges is the best way to ensure your organization meets federal requirements. Gateway Checker’s TraceReady? platform evaluates DSCSA conformance and compliance in line to the receiving and fulfillment process, enabling continuous quality assurance for your transactions.??
3. Prepare ahead of time: don't see these exemptions as an excuse to delay compliance efforts. By preparing your systems before the deadline, you prevent disruptions to supply chains down the line, avoid potential penalties of noncompliance, and demonstrate your commitment to supply chain security.?
4. Communicate Consistently: by communicating your challenges consistently with your trading partners, you can address any complications before the deadline.?
5. Ask questions: The Gateway Checker team is here to support compliance efforts, no matter where you are in the process. Whether you need help providing evidence of data exchanges to trading partners, support communicating extension reliance, or need help meeting extension eligibility requirements, don’t hesitate to contact us.?