Two Labs Blog

Two Labs Blog

How DSCSA Changes the Licensing Landscape for Third-Party Logistics

Posted by Two Labs on January 10, 2018

The Drug Supply Chain Security Act (DSCSA), passed in November 2013, has become a buzzword in the pharma industry in the past few years, and will continue to be until the completion of the implementation in 2023.  DSCSA describes creating an electronic, inter operable system that stores transaction information and history of a drug from the time of manufacture to when it is dispensed to a patient.

The big license earthquake came when the FDA defined what a Third-Party Logistics (3PL) company should be.  Before the passage of DSCSA, 3PL companies could be licensed as a wholesaler. The Wholesale and 3PL business models are similar: both company types accept products from manufacturers into their warehouses and then distribute them to customers. However, there is one major difference: the 3PL does not own the products that they are distributing. 

Because the 3PL does not take ownership of the product, the FDA decided that the 3PL should have its own category and can no longer be licensed as a wholesaler. As Federal law supersedes any state requirement, all 305 Third-Party Logistics locations listed by the FDA had state licenses that were now considered nullified.  

3PLvWholesaler-BlogGraphic-010718-04.png

The big question is: How are the 3PLs able to continue to do business in a state when all their licenses are no longer valid? This is an issue plaguing the industry.  Even the National Association Boards of Pharmacy (NABP) has been trying to help clarify. Feel free to check out their November/December issue of their publication, Innovations, page 7 where NABP leads a discussion forum to provide guidance to the wholesale industry.

As of December 2017, there are only 14 states that have established a specific license for a 3PL. This means the 3PL may continue to do business in the other 36 states (in addition to Washington, D.C.) without the requirement of a license. The state legislatures must decide for themselves whether a state will require a 3PL to hold a license, what the requirements will be, costs, etc. That small number of 14 states will both continue to grow and continue to change the landscape of licensing for pharmaceutical distribution over the next few years as the states make these decisions

Which 14 States  Require a License?

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Topics: 3PL, PharmaLicense, DSCSA

3 Entities That Can Change Your State Licensing Strategy

Posted by Two Labs on November 9, 2017
Pharmaceutical State Licensing ChangesIn the Pharmaceutical industry, licensing is never a static process. There are many changes that can alter your licensing strategy: 
 

1. Your Company

This one is pretty obvious. There are a number of different business changes that could direct the strategy of your licensing, or the maintenance of your state licenses. Some of the most common occurrences are: a change of business entity (i.e. LLC to INC), a change of officers, or moving. These are the more common instances, but there is a wide variety of scenarios that may affect your company's licensing strategy.  Remember, each state interprets business changes differently according to its own statutes.
 
Are you making any strategic business changes? Fill out this form and let us check to see if it will affect your Licensing.
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2. Contract Manufacturing Organization (CMO)

If your CMO moves, it might affect your state licensing more than you would expect. States are now asking for your CMO's license number on applications, and to provide a copy of the FDA's inspection report. If any pharmaceutical manufacturer opens a new facility, they have to go through the rigmarole of an FDA inspection all over again to get an updated license. This can adversely impact your licensing if the required states aren't updated with the change.
 

3. Third-Party Logistics Provider (3PL)

Similar to the CMO, if a 3PL changes locations or opens up a new location, this may alter your state licensing. The states vary on the requirement of a 3PL's license: several states allow a company to piggyback off of its 3PL's license, a handful require your 3PL's state license to be listed, and a few print the 3PL's location on your license. In each scenario, your 3PL's business activities may adversely change your state licensing strategy and the process of maintaining your state licensing.
 
If any of these situations sounds like something your company is faced with now or potentially in the future, contact the Two Labs PharmaLicense team and let us determine if your future plans will alter your licensing strategy.
 
Fill Out the Form Here
 
For more information about Two Labs, visit www.twolabs.com
 

Topics: PharmaLicense, 3PL