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 Contains Nonbinding Recommendations 36 II. BACKGROUND 37 38 A. Definitions of Suspect Product and Illegitimate Product 39 40 On November 27, 2013, the DSCSA was signed into law. Section 202 of the DSCSA, which 41 added section 581 to the FD&C Act, sets forth the definitions of "suspect product" and 42 "illegitimate product," among other terms. Suspect product is defined in section 581(21) of the 43 FD&C Act, and illegitimate product is defined in section 581(8) of the FD&C Act: 44 45 SUSPECT PRODUCT-The term "suspect product" means a product for which 46 there is reason to believe that such product: 47 (A) is potentially counterfeit, diverted, or stolen; 48 (B) is potentially intentionally adulterated such that the product would result 49 in serious adverse health consequences or death to humans; 50 (C) is potentially the subject of a fraudulent transaction; or 51 (D) appears otherwise unfit for distribution such that the product would result 52 in serious adverse health consequences or death to humans. 53 54 ILLEGITIMATE PRODUCT-The term "illegitimate product" means a product 55 for which credible evidence shows that the product: 56 (A) is counterfeit, diverted, or stolen; 57 (B) is intentionally adulterated such that the product would result in serious 58 adverse health consequences or death to humans; 59 (C) is the subject of a fraudulent transaction; or 60 (D) appears otherwise unfit for distribution such that the product would be 61 reasonably likely to result in serious adverse health consequences or death 62 to humans. 63 64 B. Scope of This Guidance 65 66 This guidance applies to the definitions of suspect product and illegitimate product as described 67 in section 581(21) and (8) of the FD&C Act, specifically as those terms are used to describe 68 trading partners' verification obligations (including notification) under section 582(b)(4), (c)(4), 69 (d)(4), and (e)(4), respectively. Section 582 includes requirements that trading partners have 70 systems in place to identify and handle suspect and illegitimate products. 71 72 This guidance is intended to help industry identify suspect and illegitimate product in the U.S. 73 pharmaceutical distribution supply chain by interpreting certain terms used in the definitions of 2 Contains Nonbinding Recommendations 74 suspect product and illegitimate product.2 Trading partners are required to take specific actions if 75 they identify such products.3 76 77 The Agency issued a revised draft guidance for industry in March 2022: Verification Systems 78 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 To comply with the verification provisions (including notification) of section 582 of the FD&C 89 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 Contains Nonbinding Recommendations 106 A. Counterfeit 107 108 FDA interprets the term counterfeit drug as used in section 581(8) and (21) of the FD&C Act, 109 and the verification provisions (including notification) in section 582(b)(4), (c)(4), (d)(4), and 110 (e)(4) to mean: 111 112 [A] drug which, or the container or labeling of which, without authorization, bears the 113 trademark, trade name, or other identifying mark, imprint, or device, or any likeness 114 thereof, of a drug manufacturer, processor, packer, or distributor other than the person or 115 persons who in fact manufactured, processed, packed, or distributed such drug and which 116 thereby falsely purports or is represented to be the product of, or to have been packed or 117 distributed by, such other drug manufacturer, processor, packer, or distributor. 118 119 See section 201(g)(2) of the FD&C Act (21 U.S.C. 321(g)(2)). 120 121 B. Diverted 122 123 For purposes of section 581(8) and (21) of the FD&C Act, and the verification obligations 124 (including notification) in section 582(b)(4), (c)(4), (d)(4), and (e)(4), FDA interprets the term 125 diverted to refer to a: 126 127  Product that left the U.S. pharmaceutical distribution supply chain and is reintroduced 128 in the United States in a transaction with a trading partner. For example, this scenario 129 would include when a trading partner reintroduces into the U.S. pharmaceutical 130 distribution supply chain product after it was dispensed to a patient or otherwise 131 removed from the U.S. pharmaceutical distribution supply chain; or 132 133  Product that is labeled for sale in a non-U.S. market and that is introduced into the 134 U.S. pharmaceutical distribution supply chain through a transaction with a trading 135 partner. 136 137 A product would not be considered diverted as described above and, therefore, would generally 138 not be considered a suspect or illegitimate product solely if a trading partner obtains that drug 139 product: 140 141  Through surveillance activities, including: 142 (1) The product was obtained by the trading partner from outside the U.S. 143 pharmaceutical distribution supply chain, or 144 (2) The product was obtained by the trading partner from a consumer who obtained 145 the product from outside the U.S. pharmaceutical distribution supply chain; or 146 147  As a result of FDA's regulatory action to address a drug shortage; or 148 149  When FDA has issued an Emergency Use Authorization for the product under section 150 564 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 circumstances to determine whether the nonsaleable product rises to the level of suspect 230 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