While, overall, the U.S. drug supply is typically safe, Congress, the Food and Drug Administration (FDA), industry groups, and consumers are working to devise a system to limit opportunities for counterfeiting and mishandling. It (1) describes the chain from manufacturer to patient, including where it is vulnerable; (2) summarizes current federal law, regulation, and FDA policies that Congress and the agency designed to protect the integrity of the final drug product, and indicates where those protections may falter; (3) notes state-level and professional association activities; and (4) discusses areas that Congress, FDA, and industry, health care, and patient stakeholders have suggested might be changed to increase the security of the pharmaceutical supply chain. This segment of the supply path is called downstream . A manufacturer may sell directly to a dispenser, but usually sells to a primary wholesale distributor (labeled B). Since its passage in 1938, the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended, both directly addresses and indirectly influences the pharmaceutical supply chain. The Prescription Drug Marketing Act of 1987 (PDMA, P.L. By adding a new Subsection 503(e), PDMA also addressed other segments of the supply chain with the following changes to the FFDCA:
required that wholesalers, except for authorized distributors of record, provide to the recipient "a statement ... identifying each prior sale, purchase, or trade of such drug.... ," often referred to as a pedigree; required each manufacturer to maintain a current list of its authorized distributors of record; stated that no one may engage in wholesale distribution unless licensed by a state in accordance with the Secretary's guidelines; required the Secretary to issue guidelines, by regulation, establishing minimum standards for wholesaler licensing to include storage and handling and records; and defined authorized distributor of record (ADR) and wholesale distribution (see earlier textbox). With the FDA Amendments Act of 2007 (FDAAA, P.L. The law directed the Secretary to "develop standards and identify and validate effective technologies for the purpose of securing the drug supply chain against counterfeit, diverted, subpotent, substandard, adulterated, misbranded, or expired drugs." Food and Drug Administration Safety and Innovation Act of 2012

Five years after FDAAA, attempts by Congress, FDA, and other stakeholders to craft a comprehensive supply chain plan culminated in the Food and Drug Administration Safety and Innovation Act (FDASIA, P.L. 112-144 ). Several sub-goals, some of them overlapping, are evident in current and prior legislative proposals that would
protect the patient from ineffective or dangerous drugs that may be in the supply chain as a result of counterfeiting, theft and resale, or manufacturing, transportation, or storage mishaps; protect the manufacturer , who can lose both money and reputation if its product harms a patient, regardless of whether the fault laid with the manufacturer's actions; and allow the assignment of accountability for identified problems. Lot- or unit-level activity . A unit is the smallest package that is delivered to the dispenser (retail or hospital pharmacy or clinical setting) who will dispense it to a patient. Current legislative discussions are focused on the downstream chain. Authentication . Interoperability . For a track and trace system to work as envisioned, the data maintained by the manufacturer and each subsequent link in the chain must have compatible formats and definitions. Data management . Confidentiality . Notification . Distributors or dispensers may find that a shipment includes suspected or confirmed counterfeit or substandard drug products. Implementation timing . Licensure , registration, and accreditation . Accountability . Cost . Consideration of cost is often a part of decisions regarding scope, implementation dates, reporting requirements, and other elements of a supply chain security system. Federal and state jurisdiction . However, the requirements in federal legislation might preempt state law and regulation. 3204 , the Drug Quality and Security Act, the text of which was released as an agreement by majority and majority leadership of the Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Energy and Commerce on September 25, 2013. The House passed H.R. 3204 on September 28, 2013. The bill now awaits Senate action.
The drug package that a community pharmacist hands to a patient, or a hospital pharmacist sends to a patient's bedside, or a physician administers in the medical office has reached the end of a complicated path. That path is called a supply or distribution chain. The upstream portion of the chain includes the journey of each active and inactive ingredient and their chemical components to the manufacturer that creates the finished drug product. The downstream chain, which this report addresses, includes the repackagers, wholesale distributors, associated storage and transport companies, and, finally, the dispenser. Dispensers include independent community or chain pharmacies, hospitals or other health care facilities, and physicians' offices.
Usually the supply chain provides consumers with unadulterated prescription drugs. However, the chain is potentially vulnerable, and when it breaks, a dispenser might provide a counterfeit product containing no active ingredient, less-than-labeled dosage, or a dangerous substitution. The dispenser might also provide a mishandled or diverted drug that has become sub- or superpotent or has gone past its expiration date. In addition to the potential harm to patients, these security breaches can affect a manufacturer's reputation and financial bottom line.
Congress has addressed pharmaceutical supply chain security several times over the past 107 years. The 1906 Food and Drugs Act focused on labeling; the 1938 Federal Food, Drug, and Cosmetics Act (FFDCA) addressed adulteration, misbranding, and the registration and inspection of manufacturing establishments; and the Prescription Drug Marketing Act (PDMA, P.L. 100-293) required that wholesale distributors be licensed by the states and required that a wholesale distributor, except one in a specified ongoing relationship with the manufacturer, provide to the purchasing distributor or dispenser a statement—called a pedigree—"identifying each prior sale, purchase, or trade of such drug." More recently, the Food and Drug Administration Amendments Act of 2007 (FDAAA, P.L. 110-85) required the Secretary to "develop standards and identify and validate effective technologies for the purpose of securing the drug supply chain against counterfeit, diverted, subpotent, substandard, adulterated, misbranded, or expired drugs"; and, in 2012, the Food and Drug Administration Safety and Innovation Act (FDASIA, P.L. 112-144) expanded registration and reporting requirements. Despite current federal law and actions by state legislatures, opportunities for breaches of the supply chain continue to exist. The 112th and 113th Congresses have worked to craft a set of national requirements that would protect both patient and manufacturer, and allow the assignment of accountability for identified problems, while attempting to manage cost and avoiding a confusing patchwork of state legislation.
In their work, House and Senate policymakers have been considering many decisions. These include, for example, definitions; pedigrees; track-and-trace technologies; serialization; lot- and unit-level requirements; authentication; interoperable data collection and systems; data confidentiality and access; requirements for transaction reporting and notification regarding suspect deliveries; implementation timing; licensure, registration, and accreditation standards for entities in the supply chain; accountability; cost; and the relationship between federal and state laws. After passing individual bills (H.R. 1919 and S. 959), majority and minority leadership of the House Committee on Energy and Commerce and the Senate Committee on Health, Education, Labor, and Pensions announced an agreement on September 25, 2013. The House passed the text of the agreement, H.R. 3204, on September 28, 2013, and the bill awaits Senate action.