Wholesale Distributor Verification Requirement for Saleable Returned Drug Product and Dispenser Verification Requirements When Investigating a Suspect or Illegitimate Product—Compliance Policies

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

Wholesale Distributor Verification
Requirement for Saleable Returned Drug
Product and Dispenser Verification
Requirements When Investigating a
Suspect or Illegitimate Product—
Compliance Policies
Guidance for Industry
This guidance is for immediate implementation.
FDA is issuing this guidance for immediate implementation in accordance with 21 CFR
10.115(g)(2). Submit one set of either electronic or written comments on this guidance at any
time. Submit electronic comments to https://www.regulations.gov. Submit written comments to
the Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852. You should identify all comments with the docket number
listed in the notice of availability that publishes in the Federal Register.
For questions regarding this document, contact (CDER) Office of Compliance at 301-796-3130,
drugtrackandtrace@fda.hhs.gov, or (CBER) Office of Communication, Outreach and
Development at 800-835-4709 or 240-402-8010.
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)
Office of Regulatory Affairs (ORA)
October 2020
Procedural

Wholesale Distributor Verification
Requirement for Saleable Returned Drug
Product and Dispenser Verification
Requirements When Investigating a
Suspect or Illegitimate Product—
Compliance Policies
Guidance for Industry
Additional copies are available from:
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Center for Drug Evaluation and Research
Food and Drug Administration
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and/or
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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)
Office of Regulatory Affairs (ORA)
October 2020
Procedural

Contains Nonbinding Recommendations
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................................... 1
II. BACKGROUND ....................................................................................................... .2
III. COMPLIANCE POLICY FOR WHOLESALE DISTRIBUTOR VERIFICATION
OF SALEABLE RETURNED PRODUCT ................................................. …………4
IV. COMPLIANCE POLICY FOR THE DISPENSER VERIFICATION
REQUIREMENTS…………………………………………………………………….....6

Contains Nonbinding Recommendations
1
Wholesale Distributor Verification Requirement for Saleable
Returned Drug Product and Dispenser Verification Requirements
When Investigating a Suspect or Illegitimate Product—Compliance
Policies
Guidance for Industry1
This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on
this topic. It does not establish any rights for any person and is not binding on FDA or the public. You
can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
To discuss an alternative approach, contact the FDA office responsible for this guidance as listed on the
title page.
I. INTRODUCTION
On September 24, 2019, FDA published the Wholesale Distributor Verification Requirement for
Saleable Returned Drug Product—Compliance Policy guidance (the 2019 Compliance Policy),
where FDA announced a 1-year delay in enforcement of the requirement for wholesale
distributors2 to verify3 saleable returned product4 as required under section 582(c)(4)(D) of the
Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360eee-1(c)(4)(D)). The 2019
Compliance Policy explained that the Agency intended to delay enforcement of this requirement
until November 27, 2020. This guidance announces FDA’s extension of such delay in
enforcement. It also sets forth the Agency’s enforcement policy with respect to section
582(d)(4)(A)(ii)(II) and (d)(4)(B)(iii) of the FD&C Act (21 U.S.C. 360eee-1(d)(4)(A)(ii)(II) and
(d)(4)(B)(iii)), which generally provide that, beginning November 27, 2020, a dispenser5 must
verify the product identifier6 of suspect or illegitimate product7 in the dispenser’s possession or
control.
This guidance addresses the readiness of wholesale distributors to comply with the requirement
to verify the product identifier upon receipt of a returned product that the wholesale distributor
1 This guidance has been prepared by the Office of Compliance in the Center for Drug Evaluation and Research
(CDER) in cooperation with the Center for Biologics Evaluation and Research (CBER) and the Office of Regulatory
Affairs (ORA) at the Food and Drug Administration.
2 Wholesale distributor is defined in section 581(29) of the FD&C Act (21 U.S.C. 360eee(29)).
3 Verification or verify is defined in section 581(28) of the FD&C Act.
4 Product is defined in section 581(13) of the FD&C Act. Return is defined in section 581(17) of the FD&C Act.
5 Dispenser is defined in section 581(3) of the FD&C Act.
6 Product Identifier is defined in section 581(14) of the FD&C Act.
7 Suspect product is defined in section 581(21) and illegitimate product is defined in section 581(8) of the FD&C
Act.

Contains Nonbinding Recommendations
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intends to further distribute under section 582(c)(4)(D) of the FD&C Act. The requirement
under section 582(c)(4)(D) of the FD&C Act for wholesale distributors to verify saleable
returned products prior to redistribution went into effect on November 27, 2019.8 FDA does not
intend to take action against wholesale distributors who do not, prior to November 27, 2023,
verify the product identifier prior to further distributing returned product as required under
section 582(c)(4)(D) of the FD&C Act. This represents an additional 3-year delay from the
delay set forth in the 2019 Compliance Policy in enforcement of the requirement for wholesale
distributors to verify the product identifier prior to further distributing that returned product.
This guidance also addresses the dispenser requirement in section 582(d)(4)(A)(ii)(II) of the
FD&C Act. This provision, which is effective as of November 27, 2020, requires a dispenser to
verify whether the product identifier of a suspect product, including the standardized numerical
identifier,9 of at least 3 packages10 or 10 percent of such suspect product, whichever is greater, or
all packages, if there are fewer than 3, corresponds with the product identifier assigned to such
product by the manufacturer or repackager.11 Furthermore, this guidance addresses section
582(d)(4)(B)(iii) of the FD&C Act, which requires dispensers to verify product as described in
section 582(d)(4)(A)(ii) of the FD&C Act in response to a notification of illegitimate product
from FDA or a trading partner.12 FDA does not intend to take action before November 27, 2023,
against dispensers who do not verify the product identifiers of suspect product as required by
section 582(d)(4)(A)(ii)(II) of the FD&C Act. In addition, FDA does not intend to take action
before November 27, 2023, against dispensers who do not verify the product identifiers of
illegitimate product that are the subject of a notification from FDA or a trading partner as
required by section 582(d)(4)(B)(iii) of the FD&C Act. This represents a 3-year delay in
enforcement of the requirements for dispensers to verify the product identifier when
investigating suspect or illegitimate product.
In general, FDA’s guidance documents do not establish legally enforceable responsibilities.
Instead, guidances describe the Agency’s current thinking on a topic and should be viewed only
as recommendations, unless specific regulatory or statutory requirements are cited. The use of
the word should in Agency guidances means that something is suggested or recommended, but
not required.
II. BACKGROUND
The Drug Supply Chain Security Act (DSCSA) (Title II of Public Law 113-54) was signed into
law on November 27, 2013. Section 202 of the DSCSA added section 582 to the FD&C Act.
This section established product tracing, product identifier, authorized trading partner, and
verification requirements for manufacturers, wholesale distributors, repackagers, and dispensers
8 See section 582(c)(4)(D) of the FD&C Act.
9 Standardized numerical identifier is defined in section 581(20) of the FD&C Act.
10 Package is defined in section 581(11) of the FD&C Act.
11 See section 582(d)(4)(A) of the FD&C Act.
12 For this guidance, trading partner is defined as described 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) of the FD&C Act, they
are not subject to the same product tracing requirements of section 582 of the FD&C Act.

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to facilitate the tracing of a product through the pharmaceutical distribution supply chain.
Failure to comply with the requirements of section 582 of the FD&C Act is prohibited under
section 301(t) of the FD&C Act (21 U.S.C. 331(t)) and subject to enforcement action under the
FD&C Act.
One requirement of the verification scheme outlined in the DSCSA is the verification of saleable
returned product. Under section 582(c)(4)(D) of the FD&C Act, wholesale distributors must
have systems in place that will enable them to verify the product identifier, including the
standardized numerical identifier, on each sealed homogeneous case of saleable returned
product, or, if such product is not in a sealed homogeneous case, on each package of saleable
returned product. A saleable returned product may not be further distributed until the product
identifier is verified.13 The product should be handled as suspect product if the product identifier
is not successfully verified (i.e., it should be quarantined and investigated).14, 15 FDA published
the 2019 Compliance Policy on September 24, 2019, announcing a 1-year delay in enforcement
against wholesale distributors who do not verify the product identifier of saleable returned
product prior to further distributing such product as required by section 582(c)(4)(D) of the
FD&C Act.
In addition, section 582 of the FD&C Act requires certain trading partners (manufacturers,
repackagers, wholesale distributors, and dispensers) to exchange transaction information,
transaction history, and a transaction statement when engaging in transactions involving certain
prescription drugs.16,17 A transaction statement must include a statement that the entity
transferring ownership in a transaction had systems and processes in place to comply with
verification requirements under section 582 of the FD&C Act.18 In the 2019 Compliance Policy,
FDA acknowledged that wholesale distributors may not have systems in place by November 27,
2019, to enable the wholesale distributor to timely and efficiently comply with the verification of
saleable returned product requirements under section 582(c)(4)(D) of the FD&C Act without
potentially causing a disruption to the pharmaceutical distribution supply chain. Therefore, the
2019 Compliance Policy indicated FDA’s intent to take no enforcement action prior to
November 27, 2020, against a wholesale distributor that provided a transaction statement to a
subsequent purchaser of product on the basis that such wholesale distributor did not yet have
systems and processes in place to comply with the saleable return verification requirements
under section 582(c)(4)(D) of the FD&C Act.
Section 582 also includes requirements for dispensers to verify product identifiers when
investigating suspect or illegitimate product. Specifically, section 582(d)(4)(A)(ii)(II) of the
FD&C Act provides that, effective November 27, 2020, dispensers must verify “the product
13 See section 582(c)(4)(D) of the FD&C Act.
14 See Verification Systems Under the Drug Supply Chain Security Act for Certain Prescription Drugs (October
2018). We update guidances periodically. For the most recent version of the guidance, check the FDA guidance
web page at https://www.fda.gov/regulatory-information/search-fda-guidance-documents.
15 Section 582(c)(4)(A)(i) of the FD&C Act details how wholesale distributors must handle suspect product.
16 Transaction, transaction history, transaction information, and transaction statement are defined under sections
581(24), (25), (26), and (27) of the FD&C Act.
17 See section 582(b)(1), (c)(1), (d)(1), and (e)(1) of the FD&C Act.
18 See section 581(27)(E) of the FD&C Act.

Contains Nonbinding Recommendations
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identifier, including the standardized numerical identifier, of at least 3 packages or 10 percent of
such suspect product, whichever is greater, or all packages, if there are fewer than 3, corresponds
with the product identifier for such product [in the dispenser’s possession or control]”.19 Section
582(d)(4)(B)(iii) of the FD&C Act requires dispensers to verify product as described in
582(d)(4)(A)(ii) of the FD&C Act when they have received a notification of illegitimate product
from FDA or a trading partner.
III. COMPLIANCE POLICY FOR WHOLESALE DISTRIBUTOR VERIFICATION
OF SALEABLE RETURNED PRODUCT
After publishing the 2019 Compliance Policy, FDA has received comments and feedback from
wholesale distributors, as well as other trading partners and stakeholders, expressing additional
concern with industry-wide readiness for implementation of the verification of saleable returned
product requirement for wholesale distributors. Stakeholders have explained that the primary
factors FDA considered when issuing the 2019 Compliance Policy still exist: (1) the very large
volume of saleable returned products requiring verification; (2) the need to refine and test
verification systems during actual production using real-time volumes of saleable returned
product rather than simply in pilots; and (3) the complexities of building an interoperable,
electronic system with the capabilities to timely and efficiently verify the large volume of
saleable returned products amid immature technologies.
Given the concerns expressed, FDA recognizes that some wholesale distributors may still need
additional time beyond November 27, 2020, when the delay in enforcement set forth in the 2019
Compliance Policy expires, before they can begin verifying returned products prior to resale or
other further distribution as required by section 582(c)(4)(D) of the FD&C Act in an efficient,
secure, and timely manner. To minimize possible disruptions in the distribution of certain
prescription drugs in the United States, FDA does not intend to take action before November 27,
2023, against wholesale distributors who do not verify a product identifier prior to resale or other
further distribution of a package or sealed homogenous case of product as required by section
582(c)(4)(D) of the FD&C Act.
Additionally, FDA recognizes that wholesale distributors may still not have systems in place by
November 27, 2020, to enable the wholesale distributor to timely and efficiently comply with the
verification of saleable returned product requirements under section 582(c)(4)(D) of the FD&C
Act without potentially causing a disruption to the pharmaceutical distribution supply chain.
Therefore, prior to November 27, 2023, FDA does not intend to take action against a wholesale
distributor for providing a transaction statement to a subsequent purchaser of product on the
basis that such wholesale distributor does not yet have systems and processes in place to comply
with the saleable return verification requirements under section 582(c)(4)(D) of the FD&C Act.20
19 See section 582(d)(4)(A)(ii) of the FD&C Act.
20 See section 581(27)(E) of the FD&C Act, which defines transaction statement to include systems and processes to
comply with the verification requirements of section 582, including the saleable returns requirements of section
582(c)(4)(D).

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This compliance policy aligns with the statutory requirements that effective November 27, 2023,
an enhanced system21 be used by manufacturers, repackagers, wholesale distributors, and
dispensers that allows for secure, interoperable, electronic tracing of products at the package
level.22 The enhanced system must allow for, among other things, incorporation of the product
identifier into product tracing and utilization of the product identifier to verify a product at the
package level.23 FDA believes that the extension of the delay in enforcement until November
27, 2023, will allow wholesale distributors to focus resources and efforts on implementing the
enhanced system. We envision that, along with other enhanced drug distribution security
requirements, wholesale distributors can increase their efficiency by incorporating the saleable
return verification requirements into the enhanced verification required by 2023 instead of
developing separate processes or infrastructures. Extending the delay in enforcement also
provides more time for wholesale distributors to test their ability to verify saleable returns using
real-time volume, involving all trading partners.
The compliance policy described in this section is limited to the requirements that wholesale
distributors verify saleable returned products prior to further distribution and have verification
systems in place to comply with the requirements of section 582(c)(4)(D) of the FD&C Act; it
does not extend to the other requirements in section 582 of the FD&C Act. For example, it does
not affect the requirement that a wholesale distributor must have verification systems in place to
determine whether a returned product is a suspect product.24 This compliance policy does not
affect the requirement that as of November 27, 2019, a wholesale distributor may engage in
transactions involving a product only if such product is encoded with a product identifier (except
as provided pursuant to section 582(a)(5) of the FD&C Act).25 This compliance policy does not
relieve a manufacturer of its verification obligations pursuant to section 582(b)(4)(C) of the
FD&C Act upon receiving a request for verification from an authorized wholesale distributor.
Further, as of November 27, 2019, wholesale distributors must only accept returned product from
a dispenser or repackager if the wholesale distributor can associate returned product with the
transaction information and transaction statement associated with that product.26 FDA
previously issued the draft guidance, Verification Systems Under the Drug Supply Chain Security
Act for Certain Prescription Drugs (October 2018) (Verification Systems Draft Guidance) to
describe FDA’s interpretation of the requirements of section 582 of the FD&C Act regarding
verification systems.27 Wholesale distributors should refer to the Verification Systems Draft
Guidance for a detailed description of responsibilities that are applicable to them.
This compliance policy is not applicable with respect to returns of saleable packages and sealed
homogeneous cases of product without product identifiers that were in the pharmaceutical
distribution supply chain before November 27, 2018. The guidance for industry Grandfathering
21 For the purpose of this guidance, enhanced system refers to the interoperable, electronic, package-level product
tracing systems and processes required by section 582(g) of the FD&C Act.
22 See section 582(g)(1)(A) of the FD&C Act.
23 See section 582(g)(1)(B) and (C) of the FD&C Act.
24 See section 582(c)(4)(A) of the FD&C Act.
25 See section 582(c)(2) of the FD&C Act.
26 See section 582(c)(1)(B)(i)(II) of the FD&C Act.
27 When final, this guidance will represent the FDA’s current thinking on this topic.

Contains Nonbinding Recommendations
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Policy for Packages and Homogenous Cases of Product Without a Product Identifier (September
2018), addresses such returns.28
IV. COMPLIANCE POLICY FOR THE DISPENSER VERIFICATION
REQUIREMENTS
In the years since the passage of the DSCSA, FDA has received comments and feedback from
dispensers expressing concern with readiness for implementation of certain requirements under
section 582(d) of the FD&C Act, including the verification requirements addressed in this
compliance policy. Specifically, dispensers have described challenges with implementation of
these provisions in the DSCSA due to the time necessary to develop technologies and processes
that would support a robust verification system.
Given the concerns expressed, FDA recognizes that some dispensers may need additional time
beyond November 27, 2020, before they can begin to verify the statutorily-designated portion of
product identifiers of suspect and illegitimate products as described in sections
582(d)(4)(A)(ii)(II) and (B)(iii) of the FD&C Act. To minimize possible disruptions in the
distribution of certain prescription drugs in the United States, FDA does not intend to take action
before November 27, 2023, against dispensers who do not verify the statutorily-designated
portion of product identifiers of suspect product as required by section 582(d)(4)(A)(ii)(II) of the
FD&C Act. In addition, FDA does not intend to take enforcement action before November 27,
2023, against dispensers who do not verify, as required by section 582(d)(4)(B)(iii) of the FD&C
Act, the statutorily-designated portion of product identifiers of product that is the subject of an
illegitimate product notification by FDA or a trading partner.
Dispensers should refer to the Verification Systems Draft Guidance for a detailed description of
responsibilities that are applicable to them, as the compliance policy described in this section
applies only to the dispenser requirements regarding verification of product identifiers described
in sections 582(d)(4)(A)(ii)(II) and (B)(iii) of the FD&C Act and does not apply to any other
provision in section 582 of the FD&C Act. This compliance policy does not address any of the
other verification requirements set forth in section 582(d)(4) of the FD&C Act. For example,
this compliance policy does not affect the requirement that as of November 27, 2020, a dispenser
may engage in transactions involving a product only if such product is encoded with a product
identifier (except as provided pursuant to section 582(a)(5) of the FD&C Act),29 and this
compliance policy does not affect the other activities required by section 582(d)(4)(A) and
section 582(d)(4)(B) by incorporation (e.g., dispensers must still quarantine product, conduct
investigations, and disposition illegitimate product). This compliance policy does not relieve a
manufacturer of its verification obligations pursuant to section 582(b)(4)(C) of the FD&C Act
upon receiving a request for verification from an authorized dispenser.
This compliance policy aligns with the statutory requirements for an enhanced drug distribution
system discussed above in section III of this guidance. When effective on November 27, 2023,
28 For the most recent version of the guidance, check the FDA guidance web page.
29 See section 582(d)(2) of the FD&C Act.

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the enhanced system must include as part of the transaction information the product identifier for
each package in the transaction.30 The enhanced system must also allow for the verification of
product at the package level.31 In addition, the enhanced system must allow for the ability to
promptly generate and provide specific product and transaction documentation upon request by
FDA, another Federal or State official, or an authorized trading partner for purposes of
investigating suspect or illegitimate product.32 FDA believes that dispensers can use this 3-year
period to ensure the systems and processes that are put into place to meet the enhanced system
requirements by November 27, 2023, will also fulfill all dispenser verification requirements
under section 582(d)(4) of the FD&C Act.
30 See section 582(g)(1)(B) of the FD&C Act.
31 See section 582(g)(1)(C) of the FD&C Act.
32 See section 582(g)(1)(D) of the FD&C Act.