Definitions of Suspect Product and Illegitimate Product for Verification Obligations Under the Drug Supply Chain Security Act Guidance for Industry: Guidance for Industry

Administrative guidance, not enacted legislation. This captured publisher edition preserves the listed document and attachments; later developments are not independently consolidated.

Definitions of Suspect Product
and Illegitimate Product for
Verification Obligations Under
the Drug Supply Chain Security
Act
Guidance for Industry
U.S. Department of Health and Human Services
Food and Drug Administration
Center for Drug Evaluation and Research (CDER)
Center for Biologics Evaluation and Research (CBER)
March 2023
Procedural

Definitions of Suspect Product
and Illegitimate Product for
Verification Obligations Under
the Drug Supply Chain Security
Act
Guidance for Industry
Additional copies are available from:
Office of Communications, Division of Drug Information
Center for Drug Evaluation and Research
Food and Drug Administration
10001 New Hampshire Ave., Hillandale Bldg., 4th Floor
Silver Spring, MD 20993-0002
Phone: 855-543-3784 or 301-796-3400; Fax: 301-431-6353
Email: druginfo@fda.hhs.gov
https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/default.htm
and/or
Office of Communication, Outreach and Development
Center for Biologics Evaluation and Research
Food and Drug Administration
10903 New Hampshire Ave., Bldg. 71, Room 3128
Silver Spring, MD 20993-0002
Phone: 800-835-4709 or 240-402-8010
Email: ocod@fda.hhs.gov
https://www.fda.gov/vaccines-blood-biologics/guidance-compliance-regulatory-information-biologics/biologics-
guidances
U.S. Department of Health and Human Services
Food and Drug Administration
Center for Drug Evaluation and Research (CDER)
Center for Biologics Evaluation and Research (CBER)
March 2023
Procedural

Contains Nonbinding Recommendations
TABLE OF CONTENTS
I. 	INTRODUCTION............................................................................................................. 1
II. 	BACKGROUND ............................................................................................................... 2
A. 	Definitions of Suspect Product and Illegitimate Product ............................................................. 2
B. 	Scope of This Guidance ................................................................................................................. 2
III. 	INTERPRETATION OF TERMS .................................................................................. 3
A. 	Counterfeit...................................................................................................................................... 4
B. 	Diverted........................................................................................................................................... 4
C. 	Stolen............................................................................................................................................... 5
D. 	Fraudulent Transaction................................................................................................................. 6
E. 	Unfit for Distribution..................................................................................................................... 6

Contains Nonbinding Recommendations
1 	Definitions of Suspect Product and Illegitimate Product for
2 	Verification Obligations Under the Drug Supply Chain Security Act
3 	Guidance for Industry1
4
5
6
7 	This guidance represents the current thinking of the Food and Drug Administration (FDA or
8 	Agency) on this topic. It does not establish any rights for any person and is not binding on FDA
9 	or the public. You can use an alternative approach if it satisfies the requirements of the
10 	applicable statutes and regulations. To discuss an alternative approach, contact the FDA office
11 	responsible for this guidance as listed on the title page.
12
13
14
15
16 	I. 	INTRODUCTION
17
18 	FDA is issuing this guidance to interpret the terms used in the definition of suspect product set
19 	forth in section 581(21) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C.
20 	360eee(21), and the definition of illegitimate product set forth in section 581(8) of the FD&C
21 	Act, to assist trading partners in meeting verification obligations (including notification) under
22 	section 582(b)(4), (c)(4), (d)(4), and (e)(4) (21 U.S.C. 360eee-1(b)(4), (c)(4), (d)(4), and (e)(4))),
23 	respectively.
24
25 	The Drug Supply Chain Security Act (DSCSA) (Title II of Public Law 113-54) amended the
26 	FD&C Act to establish requirements for product tracing, verification, and identification for
27 	certain drug products that are distributed in the United States. Many of the terms used in these
28 	requirements are defined in section 581 of the FD&C Act.
29
30 	In general, FDA’s guidance documents do not establish legally enforceable responsibilities.
31 	Instead, guidances describe the Agency’s current thinking on a topic and should be viewed only
32 	as recommendations, unless specific regulatory or statutory requirements are cited. The use of
33 	the word should in Agency guidances means that something is suggested or recommended, but
34 	not required.
35
1 This guidance has been prepared by the Center for Drug Evaluation and Research in cooperation with the Center
for Biologics Evaluation and Research and the Office of Regulatory Affairs at the FDA.
1

36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
Contains Nonbinding Recommendations
II. 	BACKGROUND
A. 	Definitions of Suspect Product and Illegitimate Product
On November 27, 2013, the DSCSA was signed into law. Section 202 of the DSCSA, which
added section 581 to the FD&C Act, sets forth the definitions of “suspect product” and
“illegitimate product,” among other terms. Suspect product is defined in section 581(21) of the
FD&C Act, and illegitimate product is defined in section 581(8) of the FD&C Act:
SUSPECT PRODUCT—The term “suspect product” means a product for which
there is reason to believe that such product:
(A) 	is potentially counterfeit, diverted, or stolen;
(B) 	is potentially intentionally adulterated such that the product would result
in serious adverse health consequences or death to humans;
(C) 	is potentially the subject of a fraudulent transaction; or
(D) 	appears otherwise unfit for distribution such that the product would result
in serious adverse health consequences or death to humans.
ILLEGITIMATE PRODUCT—The term “illegitimate product” means a product
for which credible evidence shows that the product:
(A) 	is counterfeit, diverted, or stolen;
(B) 	is intentionally adulterated such that the product would result in serious
adverse health consequences or death to humans;
(C) 	is the subject of a fraudulent transaction; or
(D) 	appears otherwise unfit for distribution such that the product would be
reasonably likely to result in serious adverse health consequences or death
to humans.
B. 	Scope of This Guidance
This guidance applies to the definitions of suspect product and illegitimate product as described
in section 581(21) and (8) of the FD&C Act, specifically as those terms are used to describe
trading partners’ verification obligations (including notification) under section 582(b)(4), (c)(4),
(d)(4), and (e)(4), respectively. Section 582 includes requirements that trading partners have
systems in place to identify and handle suspect and illegitimate products.
This guidance is intended to help industry identify suspect and illegitimate product in the U.S.
pharmaceutical distribution supply chain by interpreting certain terms used in the definitions of
2

Contains Nonbinding Recommendations
74
75
suspect product and illegitimate product.2 Trading partners are required to take specific actions if
they identify such products.3
76
77
78
The Agency issued a revised draft guidance for industry in March 2022: Verification Systems
Under the Drug Supply Chain Security Act for Certain Prescription Drugs.4 The 2022 draft
79 	guidance addresses other aspects of the verification requirements in section 582 of the FD&C
80 	Act. In addition, the Agency previously issued, under section 582(h)(2)(A)(iii) of the FD&C Act,
81 	the guidance for industry Drug Supply Chain Security Act Implementation: Identification of
82 	Suspect Product and Notification (June 2021) that describes the processes for notifying FDA and
83 	trading partners of illegitimate product, as well as terminating those notifications.
84
85
86 	III. 	INTERPRETATION OF TERMS
87
88
89
To comply with the verification provisions (including notification) of section 582 of the FD&C
Act, trading partners5 (manufacturers, repackagers, wholesale distributors, and dispensers) must
90 	be able to identify a suspect product and make a determination about whether that product is an
91 	illegitimate product.
92
93 	To help satisfy these obligations, trading partners should focus on the potential supply chain
94 	security threats listed in the suspect product and illegitimate product definitions. These threats
95 	include drugs that are, or may be, counterfeit, diverted, stolen, intentionally adulterated, unfit for
96 	distribution, or the subject of a fraudulent transaction.
97
98 	FDA is clarifying its interpretation of the terms counterfeit, diverted, stolen, fraudulent
99 	transaction, and unfit for distribution to aid trading partners in determining whether a product is
100 	suspect and/or illegitimate.
101
102 	Although this guidance does not create an exhaustive list of the circumstances that may result in
103 	a counterfeit drug, a diverted drug, a stolen drug, a fraudulent transaction, or a drug that is unfit
104 	for distribution, it describes the most common scenarios that FDA believes trading partners will
105 	encounter.
2 FDA’s interpretations of terms in this guidance document are limited to identifying suspect and illegitimate
product as described in section 581(21) and (8) of the FD&C Act, because those terms are used to describe trading
partners’ verification obligations (including notification) under section 582(b)(4), (c)(4), (d)(4), and (e)(4).
Furthermore, these interpretations apply only to drugs that meet the definition of “product” in section 581(13). The
interpretations of the terms in this guidance do not apply to other parts of the FD&C Act or affect FDA’s
enforcement authority under other provisions of the FD&C Act.
3 See section 582(b)(4), (c)(4), (d)(4), and (e)(4) of the FD&C Act.
4 When the 2022 draft guidance is finalized, it will represent FDA’s current thinking on this topic. We update
guidances periodically. For the most recent version of a guidance, check the FDA guidance web page at
https://www.fda.gov/RegulatoryInformation/Guidances/default.htm.
5 Trading partner is defined in section 581(23)(A) of the FD&C Act. Although third-party logistics providers are
also considered trading partners under section 581(23)(B), the requirements of section 582(a) through (e) are not
applicable to them.
3

106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
Contains Nonbinding Recommendations
A. 	Counterfeit
FDA interprets the term counterfeit drug as used in section 581(8) and (21) of the FD&C Act,
and the verification provisions (including notification) in section 582(b)(4), (c)(4), (d)(4), and
(e)(4) to mean:
[A] drug which, or the container or labeling of which, without authorization, bears the
trademark, trade name, or other identifying mark, imprint, or device, or any likeness
thereof, of a drug manufacturer, processor, packer, or distributor other than the person or
persons who in fact manufactured, processed, packed, or distributed such drug and which
thereby falsely purports or is represented to be the product of, or to have been packed or
distributed by, such other drug manufacturer, processor, packer, or distributor.
See section 201(g)(2) of the FD&C Act (21 U.S.C. 321(g)(2)).
B. 	Diverted
For purposes of section 581(8) and (21) of the FD&C Act, and the verification obligations
(including notification) in section 582(b)(4), (c)(4), (d)(4), and (e)(4), FDA interprets the term
diverted to refer to a:
 	Product that left the U.S. pharmaceutical distribution supply chain and is reintroduced
in the United States in a transaction with a trading partner. For example, this scenario
would include when a trading partner reintroduces into the U.S. pharmaceutical
distribution supply chain product after it was dispensed to a patient or otherwise
removed from the U.S. pharmaceutical distribution supply chain; or
 	Product that is labeled for sale in a non-U.S. market and that is introduced into the
U.S. pharmaceutical distribution supply chain through a transaction with a trading
partner.
A product would not be considered diverted as described above and, therefore, would generally
not be considered a suspect or illegitimate product solely if a trading partner obtains that drug
product:
 	Through surveillance activities, including:
(1) The product was obtained by the trading partner from outside the U.S.
pharmaceutical distribution supply chain, or
(2) The product was obtained by the trading partner from a consumer who obtained
the product from outside the U.S. pharmaceutical distribution supply chain; or
 	As a result of FDA’s regulatory action to address a drug shortage; or
 	When FDA has issued an Emergency Use Authorization for the product under section
564 of the FD&C Act (21 U.S.C. 360bbb-3).
4

Contains Nonbinding Recommendations
151 	C. 	Stolen
152
153 	For purposes of section 581(8) and (21) of the FD&C Act, and the verification obligations
154 	(including notification) in section 582(b)(4), (c)(4), (d)(4), and (e)(4), FDA interprets the term
155 	stolen as it applies to a package of product to refer to:
156
157 	 	Any product in its entirety (i.e., the prescription drug and its packaging6) that has
158 	been taken or removed without permission of the owner of the product (e.g., a bottle
159 	and all of its content of drug are taken or removed from the trading partner, or
160 	product taken as a result of cargo theft, warehouse theft, or courier theft7);
161
162 	 	Any packaging of a product that has been taken or removed without the permission of
163 	the owner (e.g., only the empty bottle or outer carton is taken or removed from the
164 	trading partner);
165
166 	 	Any prescription drug that has been taken or removed without permission of the
167 	owner of the product (e.g., all or some of the tablets are removed from a bottle and
168 	then taken or removed from the trading partner); or
169
170 	 	Any prescription drug and/or its packaging, in physical custody of a trading partner,
171 	that is missing all or any portion of the drug as a result of the drug being taken or
172 	removed without permission of the owner (e.g., half of the tablets are removed from a
173 	bottle and the bottle with the remaining tablets is left with the trading partner subject
174 	to the theft, or all the tablets are removed from the bottle and the bottle is left with the
175 	trading partner subject to the theft).
176
177 	FDA recognizes that product may be unaccounted for that does not meet this definition of stolen.
178 	For example, a trading partner may encounter a situation involving lost or missing product.
179 	Trading partners who identify unaccounted-for product should use current company policies and
180 	procedures to look into the circumstances surrounding the lost or missing product to determine
181 	whether it has been stolen or is otherwise suspect or illegitimate product. Consult the guidance
182 	for industry Drug Supply Chain Security Act Implementation: Identification of Suspect Product
183 	and Notification where FDA describes how to help identify suspect and illegitimate product, and
184 	the 2021 draft guidance for industry Enhanced Drug Distribution Security at the Package Level
185 	Under the Drug Supply Chain Security Act8 where FDA discusses aggregation errors and other
186 	discrepancies.
187
6 Packaging here refers to package as defined in section 581(11) of the FD&C Act: “the smallest individual saleable
unit of product for distribution by a manufacturer or repackager that is intended by the manufacturer for ultimate
sale to the dispenser of such product.”
7 Stakeholders are also encouraged to report suspected criminal activity to FDA’s Office of Criminal Investigations
(OCI) at https://www.accessdata.fda.gov/scripts/email/oc/oci/contact.cfm.
8 When final, this guidance will represent FDA’s current thinking on this topic.
5

Contains Nonbinding Recommendations
188 	D. 	Fraudulent Transaction
189
190 	For purposes of section 581(8) and (21) of the FD&C Act, and the verification provisions
191 	(including notification) in section 582(b)(4), (c)(4), (d)(4), and (e)(4), FDA interprets the term
192 	fraudulent transaction as referring to a transaction in which the transaction information,
193 	transaction history, or transaction statement contains information knowingly falsified by a
194 	trading partner who has provided or received the information.
195
196 	It may not be immediately evident whether product tracing information is knowingly falsified.
197 	There may be situations where there is a clerical error or discrepancy in the product tracing
198 	information that may not be indicative of a suspect product. In such circumstances, FDA
199 	recommends that a trading partner take steps to determine whether the error can be resolved and
200 	whether the product is suspect or illegitimate.9 If the error cannot be resolved and the product is
201 	determined to be suspect or illegitimate, the trading partner must refrain from further distributing
202 	or dispensing the product and follow the verification steps as appropriate under section 582 of
203 	the FD&C Act.
204
205 	E. 	Unfit for Distribution
206
207 	For the purpose of determining whether a product is suspect or illegitimate as those terms are
208 	defined in section 581(8) and (21) of the FD&C Act, and for purposes of the verification
209 	provisions (including notification) in section 582(b)(4), (c)(4), (d)(4), and (e)(4), FDA interprets
210 	the term unfit for distribution as referring to a prescription drug that is nonsaleable because its
211 	sale would violate the FD&C Act and there is a reason to believe or credible evidence which
212 	shows that the product would be reasonably likely to result in serious adverse health
213 	consequences or death to humans.
214
215 	Product that is unfit for distribution may include adulterated products (see section 501 of the
216 	FD&C Act) (21 U.S.C. 351)), including drugs rendered nonsaleable because conditions (such as
217 	return, recall, damage, including temperature excursion, or expiry) cast doubt on the drug’s
218 	safety, identity, strength, quality, or purity (see section 501(a)(2)(B) of the FD&C Act) to the
219 	point where there is a reason to believe or credible evidence which shows that such product
220 	would be reasonably likely to result in serious adverse health consequences or death to humans.
221
222 	In addition, product that is unfit for distribution may include misbranded products (see section
223 	502 of the FD&C Act (21 U.S.C. 352)) where there is a reason to believe or credible evidence
224 	which shows that such product would be reasonably likely to result in serious adverse health
225 	consequences or death to humans. FDA recognizes that nonsaleable products (e.g., expired) are
226 	frequently removed from the supply chain without triggering a suspect product investigation.
227 	Although FDA recognizes that not all nonsaleable drug products will be determined to be suspect
228 	product, trading partners should use current company policy and procedure to look into the
9 See the draft guidance for industry Enhanced Drug Distribution Security at the Package Level Under the Drug
Supply Chain Security Act . When final, this guidance will represent FDA’s current thinking on this topic.
6

Contains Nonbinding Recommendations
229
230
circumstances to determine whether the nonsaleable product rises to the level of suspect
product.10
231
232 	This definition of unfit for distribution, used to determine whether a product could be considered
233 	suspect or illegitimate, does not include product that is awaiting reverse distribution and
234 	processing and will not be distributed to patients. These products awaiting reverse distribution
235 	are not considered unfit for distribution within the context of initiating an investigation of
236 	suspect product. Similarly, product granted a waiver, exception, or exemption under section
237 	582(a)(3) of the FD&C Act and product grandfathered under section 582(a)(5) would not be
238 	considered unfit for distribution. Although such product is not considered unfit for distribution
239 	solely because it fits in one of these categories, such product could be unfit for distribution
240 	because it otherwise falls under the definition laid out in this section.
10 See the guidance for industry Drug Supply Chain Security Act Implementation: Identification of Suspect Product
and Notification.
7