Blog Archives

Trump’s Tariffs and Drug Prices

Posted by bryan hanley On December 11, 2024 at 12:18 pm | Comments Closed

Following his election victory, president-elect Donald Trump announced intentions of implementing tariffs on Canada, Mexico, and China; these tariffs include 25% tax on imports from both Mexico and Canada, and an additional 10% increase on the tariffs already in place on Chinese exports to the United States. The goals of these imports, according to the Trump administration, are to protect U.S. manufacturing; incentivize companies to build facilities in the U.S. (and create American jobs); provide billions to the federal reserve to help offset the cost of tax cuts; and deter the flow of illegal immigrants, fentanyl, and other illicit drugs.

However, those opposed to the tariffs (including many economists) emphasize how taxing goods could result in price increases for consumers, including prescription drugs. About 85% of the Active Pharmaceutical Ingredients (APIs) used by U.S. manufacturers for generic pharmaceuticals are from India and China; Mexico and Canada are also exporters of these materials. Taxing these APIs as they enter the United States could result in higher prices for finished goods. Companies importing these goods may simply pass the cost of the tariffs to end consumers, who are already burdened by inflation.

According to the Active Pharmaceutical Ingredient Innovation Center (APIIC), this overreliance on China, India, and other foreign nations for most of our APIs is detrimentally impacting the supply of essential medications in the United States. The APIIC also believes rising imports of pharmaceuticals to the U.S. “creates serious risks to national security and patient safety.” In the past decade, the number of API-facility locations has decreased by 61%, while foreign nations continue to scale their operations. Reshoring the manufacturing process could help mitigate these concerns, and eliminate the financial risk of higher costs associated with tariffs; could Trump’s tariff plan present further opportunity to invest in domestic API production facilities?

What do you think about the impact of tariffs on drug prices? Will tariffs raise prescription drug prices, or could the benefits of in-country production outweigh the potential-price hikes in the long run?

What Is Exempt, per recent DSCSA Update 

Posted by bryan hanley On November 22, 2024 at 8:45 pm | Comments Closed

According to the DSCSA Exemption Announcement from the FDA on October 9th, here are the specific components of the legislation that eligible trading partners are exempt from. 

Section 582(g)(1)(A-F) for Manufacturers and Repackagers, Wholesale distributors, and Dispensers 

‘‘(A) The transaction information and the transaction statements as required under this section shall be exchanged in a secure, interoperable, electronic manner in accordance with the standards established under the guidance issued pursuant to paragraphs (3) and (4) of subsection (h), including any revision of such guidance issued in accordance with paragraph (5) of such subsection. 

‘‘(B) The transaction information required under this section shall include the product identifier at the package level for each package included in the transaction. 

‘‘(C) Systems and processes for verification of product at the package level, including the standardized numerical identifier, shall be required in accordance with the standards established under the guidance issued pursuant to subsection (a)(2) and the guidances issued pursuant to paragraphs (2), (3), and (4) of subsection (h), including any revision of such guidances issued in accordance with paragraph (5) of such subsection, which may include the use of aggregation and inference as necessary. 

‘‘(D) The systems and processes necessary to promptly respond with the transaction information and transaction statement for a product upon a request by the Secretary (or other appropriate Federal or State official) in the event of a recall or for the purposes of investigating a suspect product or an illegitimate product shall be required. 

‘‘(E) The systems and processes necessary to promptly facilitate gathering the information necessary to produce the transaction information for each transaction going back to the manufacturer, as applicable, shall be required—  

‘‘(i) in the event of a request by the Secretary (or other appropriate Federal or State official), on account of a recall or for the purposes of investigating a suspect product or an illegitimate product; or 

‘‘(ii) in the event of a request by an authorized trading partner, in a secure manner that ensures the protection of confidential commercial information and trade secrets, for purposes of investigating a suspect product or assisting the Secretary (or other appropriate Federal or State official) with a request described in clause (i). 

‘‘(F) Each person accepting a saleable return shall have systems and processes in place to allow acceptance of such product and may accept saleable returns only if such person can associate the saleable return product with the trans- action information and transaction statement associated with that product. 

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

(D) VERIFICATION OF SALEABLE RETURNED PRODUCT: Beginning 6 years after the date of enactment of the Drug Supply Chain Security Act, upon receipt of a returned product that the wholesale distributor intends to further distribute, before further distributing such product, the wholesale distributor shall verify the product identifier, including the standardized numerical identifier, for each sealed homogeneous case of such product or, if such product is not in a sealed homogeneous case, verify the product identifier, including the standardized numerical identifier, on each package.

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

‘‘(II) Dispenser must promptly conduct an investigation in coordination with trading partners, as applicable, to determine whether the product is an illegitimate product beginning 7 years after the date of enactment of such Act, verifying that the product identifier, including the standardized numerical identifier, of at least 3 packages or 10 percent of such suspect product, whichever is greater, or all pack- ages, if there are fewer than 3, corresponds with the product identifier for such product 

‘‘(iii) RESPONDING TO A NOTIFICATION —Upon the receipt of a notification from the Secretary or a trading partner that a determination has been made that a product is an illegitimate product, a dispenser shall identify all illegitimate product subject to such notification that is in the possession or control of the dispenser, including any product that is subsequently received, and shall perform the activities described in subparagraph (A). 

*Recall that an exemption was given to dispensers with 25 or less full-time employees already until November 27th, 2026. This is one year after the dispensers with 26 or more full time employees. 

For any questions regarding the exemption, feel free to contact the Gateway Checker team 

 

 

 

 

 

Revisiting Florida’s Plan to Import Drugs from Canada

Posted by bryan hanley On October 23, 2024 at 11:07 am | Comments Closed

An FDA-Approved Plan with Major Implications

Earlier this year, the FDA authorized Florida’s proposal to import select drugs from Canada under section 804 of the FD&C Act. The law allows companies to import prescription drugs in bulk if doing so saves Americans money and doesn’t put the health and safety of Americans at risk.

According to the office of Florida Governor Ron DeSantis, the proposal will save the state an estimated $180 million annually. More specifically, this program will reduce the price the state pays for medications used by certain groups, including older populations, foster children, and incarcerated individuals. Florida will begin with importing small cases of chronic medication, including those treating HIV/AIDS, mental illness, prostate cancer, and urea cycle disorder.

The FDA has emphasized that for Canadian drugs to be imported into the US, Canadian partners and American companies receiving them must adhere to additional security requirements. These include specifying the drugs they plan on importing, verifying drug authenticity and compliance with FDA-approved specifications, and relabeling these drugs in accordance with FDA policy.

Not Everyone Sees the Potential Benefits 

However, despite the cost-saving claims from Florida as well as the FDA’s approval of the change, many question the decision and the proposed benefits. Many experts believe this policy change will not solve the high-price issue of prescription drugs in the US. Critics argue the Canadian drug supply is too small, which means the change will not only have a minor impact on price reduction in the US, but could lead to major shortages throughout Canada. Four days after the policy change, the Canadian Government released the following statement:

“The Government of Canada is taking all necessary action to safeguard the drug supply and ensure Canadians have access to the prescription drugs they need and has been clear in its position: bulk importation will not provide an effective solution to the problem of high drug prices in the US.”

Accordingly, prominent members within the pharmaceutical industry have counteracted against the ruling; Stephen Ubl, President and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), believes the ruling has detrimental implications on American pharmaceutical supply chains. “The importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” Ubl claimed following the approval.

What Does this Mean for Compliance?

As to how these Canadian imports will comply with DSCSA Requirements, in particular Enhanced Drug Distribution Requirements, remains questionable. With Enhanced Drug Distribution Requirements delayed for connected trading partners in the US, will Canadian pharmaceutical manufacturers be expected to fully comply with DSCSA in November or will they be eligible for additional time for completion?

Is anyone aware of any Canadian pharmaceutical importation plans or activity since the policy change took effect in early January 2024?  Have Floridians spent $50 million implementing the plan? If yes, how did that ‘investment’ benefit American patients? Since more states may adopt a similar policy in the future, understanding fiscal costs and benefits is essential.

Finally, though Canadian imports must meet additional drug security requirements, will counterfeiters see this policy change as a money-making opportunity? Considering the numerous instances of domestic counterfeiting, we can’t count this out as a possibility.

Beware of Counterfeit Ozempic, says FDA

Posted by bryan hanley On October 15, 2024 at 1:05 pm | Comments Closed
Authentic Ozempic needle side by side with a fraudulent needle

Counterfeiting: A Major Issue with Drastic Consequences

On October 2nd, the FDA released an article highlighting the risk of unapproved weight loss drugs, including semgalutide and tirzepatide. These drugs pose a major risk to patients due to their lack of quality assurance. 

Illegally marketed versions of these drugs have infiltrated pharmaceutical supply chains, most notably, Ozempic. Counterfeit versions of the drug have been marketed as authentic, but could contain too much, too little, no active ingredient, or harmful ingredients. These illegal drugs pose a risk to consumers; in fact, according to a December 2023 report, 2 people died and three people were hospitalized after consuming counterfeit Ozempic.

Another DSCSA Delay

The FDA October 9th that they were delaying implementation of Enhanced Drug Distribution Security requirements, along with other requirements of section 582(g) of the Drug Supply Chain Security Act. This compliance extension would only be for trading partners who have made a documented attempt to complete data connections with immediate trading partners, or those who are already doing so. 

The FDA has emphasized the decision came from a concern over potential drug supply shortages. In the release, the FDA referenced trading partners’ struggles “resolving issues involving missing or erroneous data in electronic DSCSA transaction information and transaction statements” without delaying product distribution (including those in shortage) downstream. 

The concern for preventing supply shortages downstream is real. Preventing shortages can help minimize the risk of counterfeit products, given how shortages lead to higher rates of counterfeits as consumers are willing to pay higher prices for goods. However, what’s also important to consider is the reason behind creating Enhanced Drug Distribution Security (EDDS) requirements in the first place. 

Counterfeit Crisis: DSCSA’s Role

The Enhanced Drug Distribution Security requirements under the DSCSA were created for instances like this. Counterfeiters have become increasingly deceitful in their craft: packages with authentic lot numbers and detailed inventory trails make it very difficult to determine the legitimacy of drugs. Sight alone is simply not enough to authenticate legitimate drugs from counterfeits, especially for end consumers—just look at the image above!

Enhanced Drug Distribution Security requirements drastically reduce this risk, mandating product-level traceability and interoperability. Flagging down counterfeit Ozempic is much easier to do with EDDS requirements in place; the FDA delaying these requirements again could pose risks similar to what we’ve seen with Ozempic. 

While it’s essential to acknowledge the FDA’s commitment to preventing drug shortages, delaying EDDS requirements may bring about its own consequences.

HDA DSCSA Guidance

Posted by bryan hanley On October 9, 2024 at 12:36 pm | Comments Closed

Following the recent HDA Traceability Seminar between August 26th-28th, I had the opportunity to lead a conversation amongst dozens of pharmaceutical partners and solution providers; we discussed various important topics related to the DSCSA, from Waiver, Exception, and Exemptions, to Verification Routing Services, and more. Emphasizing the importance of transparency and open conversation, I thought I’d highlight some important insights.  

It’s All About the Data

The FDA understands there are conflicts in terms of data quality and integrity. Downstream integrity is impossible without manufacturers ensuring their data and products align with updated standards. The FDA has stressed the importance of pharmaceutical partners, particularly manufacturers, meeting these standards by the end of the stabilization period (next month). However, for certain exceptions, including product/no data, WEEs must be considered.  

Waivers, Exceptions, Exemptions

Since mid-June, there have been over 324 requests for package-level requirements WEEs, with more likely to be submitted as we approach the deadline. Dispensers are most frequently requesting WEEs, followed by wholesalers, manufacturers, and repackages. The issue many partners are experiencing is that downstream partners cannot get accurate data from suppliers without upstream partners providing it to them efficiently. The FDA believes it is adequately staffed to handle WEEs, and if they find consistent requests for handling WEE scenarios, they will announce how partners should handle them.  

Easier Said than Done

Navigating the complexities of Waivers, Exceptions, and Exemptions is oftentimes easier said than done. While the FDA has provided various recommendations for handling tricky exceptions, oftentimes, partners still find themselves facing challenges in practice.  

VRS on the Rise

VRS is gaining popularity as an effective means to ensure interoperability between supply chain partners, helping pharmaceutical partners conform to product identification and authorization requirements under the DSCSA. Apart from saleable returns for pharmaceutical partners, VRS can provide additional verification in medical emergencies, though it’s not intended to bypass EPCIS verification.  

If you have any questions about these insights, please don’t hesitate to contact us.