FDA’s Small Dispenser DSCSA Exemption

What does FDA’s Small Dispenser Exemption really mean?

On June 12, 2024, Food and Drug Administration (FDA) issued exemptions for certain dispensers and in limited scenarios, their trading partners, from certain requirements of section 582 under the Food Drug and Cosmetic Act (FD&C Act) until November 27, 2026.   

For purposes of the exemption, a dispenser is considered a “small dispenser” if the corporate entity that owns the dispenser has a total of 25 or fewer full-time employees licensed as pharmacists or qualified as pharmacy technicians. The specific exemptions relate to portions of section 582 of the FD&C Act and primarily to the enhanced distribution security requirements that are detailed in the FDA letter on the subject.  

In recent weeks, FDA has also made it clear that they do not intend to extend the 1 year Stabilization Period that was announced in August 2023. The stabilization period was intended to accommodate additional time for all trading partners to implement, troubleshoot, and develop systems and processes to fully comply with the Drug Supply Chain Security Act (DSCSA) enhanced distribution security requirements. For all trading partners (including manufacturers, repackagers, distributors, and dispensers) that are concerned they may not be able to fully comply with any effective requirements, FDA is recommending those organizations submit a waiver request following the WEER process by August 1, 2024. 

NABP strongly urges all dispensers who do not fall under the small pharmacy exemption and are unsure of their ability to comply with DSCSA by November 27, to consider submitting a WEER to the FDA as soon as possible. Large retail pharmacies and health systems in the US are reporting that they are receiving less than half of the expected volume of serialization data files (GS1 EPCIS) to date with some reporting as low as 20 to 30%. This means it is unlikely that even the largest dispensers will be ready given there is only around four months until the end of the stabilization period on November 27, 2024. 

So, what does this all mean for DSCSA implementation for the dispenser community? In this blog, we will explore questions around what dispensers are still responsible for within DSCSA, what they are actually exempt from, and how they can go about determining if they are exempt.

Does the FDA exemption mean that small dispensers are exempt from all requirements under DSCSA?

No. The FDA exemptions do NOT exempt small dispensers from their existing compliance obligations under DSCSA. For example, small dispensers must still: 

1. Know your prescription drug suppliers (sources). They must be a trading partner that is authorized as defined in Section 581 of the FD&C Act. 
2. Know where your current product tracing information (data) is being stored and how to access it. 
3. Know how to identify suspect products and have processes in place to quarantine, investigate, and communicate as required. 
4. Develop, update, and adhere to robust prescription drug purchasing policies and procedures (P&Ps) that accurately reflect your business location’s processes. 

What are small dispensers actually exempt from?

The exemptions relate to the enhanced drug distribution security requirements in section 582(g)(1) and 582(d)(4) of the FD&C Act. Specifically, they exempt small dispensers from using electronic and interoperable methods for all of the following:  

1. Exchanging transaction information and transaction statements with trading partners. 
2. Conducting product verifications for suspect and illegitimate products.  
3. Gathering transaction information for recalls at the package level.  
4. Gathering information to respond to a regulator in circumstances when they identify a suspect or illegitimate product. 

Ultimately, dispensers are still required to do all these things, but they can simply rely on manual or existing methods for the above.    

How do I determine if I am exempt?

1. Identify your parent company. 
2. Determine how many pharmacies are under the parent company. 
3. Count the number of full-time pharmacists and full-time pharmacy technicians that work in each pharmacy in the parent company. FDA recommends this be based on the November 2024 expected employee filings.  
4. Document the date and the number of relevant full-time equivalent employees (FTEs) for each parent company pharmacy. 
5. If the number of relevant FTEs across all parent company pharmacies is greater than 25, consider whether your company wishes to apply for a waiver, exemption, or exception as outlined by DA.   

How do I notify trading partners if I qualify as a small dispenser or other exemption?

You should notify all direct trading partners if you determine your organization is exempt. There is currently no publicly shared information by the FDA on waivers granted or organizations claiming exemptions. FDA recommends that any organization that is granted a waiver or exemption notify trading partners. We are working to add optional fields in the Pulse by NABP™ trading partner directory that will allow your organization to inform authorized trading partners about your exemption.   

Note: Keep in mind that the Transaction Statement sent with DSCSA ownership change events requires each party to document that they are fully complying with all applicable aspects of DSCSA. 

What if I do not qualify for the small dispenser exemption and I am not sure if I will be ready by November 27, 2024?

NABP encourages you to submit an FDA WEER as soon as possible. FDA recommends trading partners (including small dispensers that do not qualify for the exemption) submit a waiver or exemption request by August 1. FDA has published instructions on how to submit a request for a waiver or exemption and what to include in the request. Keep in mind that the waiver process includes outlining what your organization has been doing, what leads your organization to believe you will not be ready, and what plans you have to work towards full compliance. Although periods of time for granted WEERS can vary, FDA may ask for more regular updates on progress and ability to comply prior to end of any waiver period. 

What if I have systems and processes in place to comply with DSCSA, but I am only receiving partial data from my suppliers, am I compliant?

No. While some pharmacies may have electronic and interoperable systems in place and may have connections established with trading partners, if pharmacies are not receiving complete data from their upstream trading partners, they are NOT in compliance with the DSCSA and should consider filing a WEER.

Where can I find educational or other resources regarding DSCSA?  

FDA’s recently updated website is specifically geared towards pharmacies. In addition, NABP, along with many other pharmacy organizations, maintains the dscsa.pharmacy website that includes a number of webinars, blogs, articles and other resources that are targeted for the pharmacy community.  

We remind all trading partners of the importance of ensuring your own organization’s compliance and the need for communication with all stakeholders in meeting requirements of this patient safety driven federal legislation and related guidance.