Understanding the FDA's Exemption for DSCSA Compliance

On Oct. 9, 2024—49 days before the end of the one-year stabilization period under the Drug Supply Chain Security Act (DSCSA)—the FDA issued an exemption¹ for eligible trading partners that will continue to delay enforcement regarding compliance with the law’s final enhanced drug distribution security requirements. The exemption duration varies by partner type:

• Manufacturers and Repackagers: Until May 27, 2025
• Wholesale Distributors: Until Aug. 27, 2025
• Dispensers with 26 or more full-time employees: Until Nov. 27, 2025 (this excludes small dispensers, which are exempt until Nov. 27, 2026)

This exemption is intended for partners who have successfully completed or made documented efforts to complete data connections with their immediate trading partners but still face challenges exchanging data, helping to prevent delays in medication delivery. Partners using the exemption are not required to notify the FDA, ensuring smooth, continued access to medications as they implement new security measures around unit-level tracking.

Enacted in 2013, the DSCSA was designed as a unified federal standard for pharmaceutical drug tracing, giving manufacturers, distributors, and dispensers steps to establish an interoperable electronic system to identify and trace prescription drugs at the package level to prevent harmful drugs from entering the US drug supply and protect healthcare providers and patients from counterfeit, unapproved, or potentially dangerous products. The law went into effect in November 2023; however, the FDA decided in August 2023 to delay enforcement and grant a year-long "stabilization period" for partners to adapt to its substantial requirements to enable unit-level tracking.

FDA exemption acknowledges progress

The FDA’s latest decision to issue an exemption and further delay enforcement for eligible trading partners acknowledges the progress many partners have made while recognizing the challenges that remain across the industry. Most recently, in an Oct. 7 letter to FDA Commissioner Robert Califf,² House lawmakers urged the FDA’s continued intervention in DSCSA implementation to prevent drug shortages and ensure patient access to essential medications. Among other issues, the letter pointed out “critical gaps in data quality and accuracy" and a substantial number of waiver, exception, and exemption (WEE) requests that still required the FDA’s evaluation.

While the FDA's latest announcement will initiate a phased approach to help manufacturers, distributors, and dispensers steadily align their data exchange processes, it’s important to note that this exemption is only available to trading partners who have actively worked to establish data connections. Trading partners who have not taken any steps—less than 10% of manufacturers, according to Cencora’s estimates—must still meet the Nov. 27 implementation deadline or obtain a WEE. However, if previously noncompliant partners can show they’ve made efforts to qualify for the exemption by Nov. 27, they will receive it until the given deadlines.

A message to manufacturers and dispensers: Don’t delay

While noncompliant trading partners must prioritize necessary changes, the exemption also presents a valuable opportunity for all members of the supply chain to optimize processes and procedures. It should not be seen as a reason to delay implementing the final requirements of the law.

Manufacturers should continue testing and validating their current systems and processes to identify any gaps and needs—and establish risk management plans to minimize potential disruptions to operations. Dispensers should use this time to refine existing processes, adapt standard operating procedures, and practice with the DSCSA reporting and returns.

After 10 years of progress, the final goal of unit traceability for distributors, dispensers, and manufacturers is within reach. It’s crucial that trading partners sustain their momentum towards achieving full DSCSA compliance. Now is the time to speed up, not slow down. As trading partners, including Cencora navigate this critical phase, we aren’t just meeting a regulatory requirement; we’re setting a new standard for safety and integrity in the pharmaceutical supply chain. The future of healthcare relies on our shared dedication to this goal.

About the Author

Matthew Sample is the SVP of Manufacturer and Replenishment Operations at Cencora.

References

1. Waivers and Exemptions Beyond the Stabilization Period. FDA. May 15, 2024. https://www.fda.gov/drugs/drug-supply-chain-security-act-dscsa/waivers-and-exemptions-beyond-stabilization-period?utm_medium=email&utm_source=govdelivery

2. Congressional Letter to FDA to Avoid Drug Supply Chain Disruptions. HDA. October 7, 2024. https://hda.org/getmedia/ec6bb7a4-8515-4d14-b458-bfb5bc629191/Congressional-Letter-to-FDA-to-Avoid-Drug-Supply-Chain-Disruptions.pdf