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HDA Updates their Q/A for the DSCSA

Christian Souza

Here are a few Q/A from the HDA

How should wholesale distributors handle shipping a discrepancy? Shortage, Damage, Overage?

FDA has not addressed discrepancies or the need for changes to correct information in TI/TH/TS. Certainly the DSCSA requires that accurate TI/TH/TS be passed, received and stored, so if errors are discovered, they need to be corrected. In the HDA ASN Exceptions Guidelines for the Drug Supply Chain Security Act (“ASN Exceptions Guidelines”), HDA describes various scenarios in which there is a discrepancy or error in TI/TH/TS, and proposed responses/corrective actions.

If a wholesale distributor receives more product than it receives data for (e.g., it orders 150 units but only receives TI/TH/TS for 100 units), how does the wholesale distributor handle the 50 units for which it does not have data? How should the manufacturer correct the missing data?

The DSCSA provides that a wholesale distributor may not accept ownership of a product (that is, accept product into inventory) unless, prior to or at the time of product receipt, it has also received sufficient transaction data (TI/TH/TS). So, in the above example, the wholesale distributor could accept ownership of 100 units because it received transaction data for 100 units. Before the wholesale distributor could accept ownership of the final 50 units, the manufacturer would need to send the transaction data for those 50 units to the wholesale distributor. The ASN Exceptions Guidelines addresses this and other discrepancy issues in more detail.

If a wholesale distributor receives less product than it receives data for (e.g., it orders 300 and receives TI/TH/TS for 300 units but only 200 units are shipped), how should the wholesale distributor handle the discrepancy? How should the manufacturer correct the missing units ordered?

As noted in the response to Question 25, the DSCSA prohibits a wholesale distributor from accepting ownership of a product unless it has received sufficient transaction data. In the present example, the wholesale distributor received transaction data for the 200 units shipped, so the wholesale distributor may accept ownership of the 200 units. For the quantity not shipped, the parties would use standard business practices to resolve the shortage. The ASN Exceptions Guidelines addresses this and other discrepancy issues in more detail.

My shipment contains exempted products or other products not covered by the DSCSA, can I use the same ASN?

My shipment contains exempted products or other products not covered by the DSCSA, can I use the same ASN?

Yes you can, however, you only need to send TI/TH/TS for products covered by DSCSA.

My shipment contains items that are exempt from DSCSA. Can I use the same ASN?

Yes you can; however, you only need to send TI/TH/TS for products covered by DSCSA. Distributors typically ‘flag’ exempt items in their internal systems based on information from the manufacturer for each product. (For example, manufacturers will be prompted when completing the HDA Standard Product Information Form for Pharmaceutical Products [the ‘HDA New Item Form’] to indicate if that particular product is exempt from DSCSA requirements.)

HDA Q/A...

Would an ASN from a manufacturer include more than one product/different lots, etc.? If there are different products/different lots, do they provide the TS at the item/line level?

Yes, an ASN can still accommodate multiple products and different lots. There is line item detail which can provide a TS, including direct purchase statements and other detailed information (name, NDC#, lot #, container size, number of containers, etc.) about the product. The TS at the shipment level directs the receiver to line level for detailed direct purchase statements.

What will the receiving party do if an ASN is not received at the time the shipment arrives at the receiving party’s dock? Hold-off on formal receipt?

The law states that “A wholesale distributor shall not accept ownership of a product unless the previous owner prior to, or at the time of, the transaction provides the transaction history, transaction information, and a transaction statement for the product, as applicable under this subparagraph.” § 582(c)(1)(A)(i). This means that the wholesale distributor must have TI/TH/TS at the time of or before the change of ownership. Trading partners will need to determine how the seller will provide TI/TH/TS to the receiving party (whether by paper, ASN or other form) so that the receiving party may accept ownership of the product.

Because the time at which an ownership change occurs varies based upon commercial agreements between the parties, if product were to arrive at a buyer’s warehouse without TI/TH/TS, holding off on the physical receipt of product would be a business decision of the individual trading partners. Certainly if the buyer physically receives the product prior to receiving TI/TH/TS, the goods would need to remain quarantined until receipt of TI/TH/TS so that ownership could lawfully be accepted. See HDA'’s ASN Exceptions Guidelines for more details.

Are products designated for destruction subject to TI/TH/TS requirements? There is a change of ownership but no exchange of money.

Products designated for destruction are covered by the DSCSA’s “non-saleable returns” provisions. Under DSCSA, the transfer of product by a manufacturer, wholesale distributor, or dispenser (with or without the use of a returns processor) for destruction is exempt from the requirements to pass TI/TH/TS.

Are items distributed for emergency medical reasons subject to TI/TH/TS requirements?

The distribution of product for emergency medical reasons (which does not include a drug shortage) is exempt from the definition of “transaction” (§ 581(24)(B)(iii)), and thus exempt from the requirements to pass TI/TH/TS.

What transaction data (TI/TH/TS) needs to be passed in the following scenario: Affiliate Manufacturer to Affiliate Repackager to Wholesale Distributor?

In this scenario, one affiliate manufactures the finished product and sells to the other affiliate, who is the repackager. The repackager packs into NEW finished product packaging and sells to wholesale distributors.

First, because the manufacturer and repackager are affiliates, the manufacturer’s transfer of product to the repackager qualifies for an exemption from the definition of “transaction.” Thus, the manufacturer would not have to pass TI/TH/TS to the repackager. Second, the repackager would have to pass TI/TH/TS to the wholesale distributor, with TH starting with the repackager. Finally, DSCSA § 582(c)(1)(A)(ii) [21 U.S.C. 360eee-1(c)(1)(A)(ii)] creates the “direct purchase option” under which purchases made directly from (i) the manufacturer, (ii) the exclusive distributor, or (iii) a repackager that purchased direct from the manufacturer, qualify for abbreviated TI and TH. Under this transaction scenario, because the wholesale distributor is purchasing from a direct-purchase repackager, the wholesale distributor would not have to include the lot number in TI or TH, and would not have to include the transaction date or shipment date (associated with its acquisition of product from the repackager) in TH.

How should wholesale distributors address the gap between the requirement for wholesale distributors to provide TI/TH/TS on January 1, 2015*, and the requirement for dispensers to receive it on July 1, 2015?

Trading partners will need to decide how they wish to address this gap as a business matter.

For a given transaction, when does ownership transfer take place?

Supply agreements may specify different points for actual transfer of title of goods, e.g., title may pass when goods leave the shipper’s dock, when the goods are delivered to the buyer’s dock, or when the buyer opens the truck, inspects the delivery and accepts it. “Transaction” is defined in DSCSA as “the transfer of product between persons in which a change of ownership occurs.” § 581(24)(A); 21 U.S.C. § 360eee(24)(A). HDA has recommended that FDA permit trading partners to use any commercially reasonable and supportable transaction date.

Can you provide clarification on transaction date and shipment date as it relates to the ASN and packing list?

For the purposes of the DSCSA, transaction date is the date of ownership transfer as recognized by the trading partners. The DSCSA does not define specifically how a company is to determine transaction date. HDMA has recommended that FDA permit trading partners to use any commercially reasonable and supportable transaction date in whatever document is sent, whether the ASN or a packing slip. In the ASN, the segment containing the transaction date is the Beginning Segment Date or “BSN”.

When a seller prepares a packing list, the shipment date is unknown. It might ship the same day or within the next couple of days. Which date should be printed on the packing list? After the ASN is sent, the seller has an actual ship date. Does the ship date in the ASN need to match the date on the packing list? If so, how can this be achieved?

The transaction date must be included on whichever document/documents that the seller designates to satisfy the DSCSA requirement to pass TI/TH/TS (whether packing slip, ASN or other). DSCSA does not require that the dates used on the packing slips and ASNs match, nor does HDA offer any guidance on this.

FDA recognizes 10-digit NDC numbers, yet certain customers require 11 digit or 12 digit NDC numbers for a variety of business reasons. What NDC number should be included in the TI/TH in order to comply with the DSCSA requirements?

Trading partners should use the same NDC number (whether 10 or 11 digits) when placing orders and sending ASN’s.

What is a “return” under the Drug Supply Chain Security Act (DSCSA)?

“Return” as used under the DSCSA means providing product to the authorized immediate trading partner from whom such product was purchased or received, or to a returns processor or reverse logistics provider for handling of such product. §581(17). Sending product to a trading partner from whom the product was not purchased is a new transaction and not a return. As discussed in Question 13 below, the DSCSA provides streamlined procedures for certain product movements that meet the definition of a “return.”

What requirements apply to nonsaleable returns to or from a wholesale distributor?

Under the DSCSA, a wholesale distributor may return a nonsaleable product to the manufacturer or repackager, to the wholesale distributor from whom such product was purchased, or to a person acting on behalf of such a person, such as a returns processor, without providing TI/TH/TS.

Further, the DSCSA does not require a dispenser to provide TI/TH/TS when it returns nonsaleable product to the wholesale distributor from whom it acquired the product. Implicitly, this means that the wholesale distributor is relieved of any requirement to receive TI/TH/TS when accepting the nonsaleable returned goods from the dispenser. Further, we believe this transfer may be outside the scope of the DSCSA because when a drug is nonsaleable, it is not for “administration to a patient.” If a drug is not for administration to a patient, it does not meet the definition of “product” under the DSCSA in §581(13).

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