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STATE PHARMACY BOARDS SHOULD REGULATE, LICENSE WHOLESALER UNDER DRUG DIVERSION LAW, NARD TELLS FDA; MS&D SAYS SAMPLING BY MAIL COULD BE DISCOURAGED

Executive Summary

State wholesaler regulation and licensing under the Prescription Drug Marketing Act should be the responsibility of boards of pharmacy, NARD maintained in Oct. 6 comments on FDA's draft wholesaler licensing guidelines for states. Noting that the FDA document "is silent as it regards the appropriate state licensing authority," the independent pharmacists association suggested that pharmacy boards be assigned to regulate wholesalers. State pharmacy boards, NARD said, "are especially knowledgeable and equipped to handle the requisite licensure, monitoring, and likely involvement in criminal investigations and related prosecutions." NARD also urged that any party that ships pharmaceuticals into a state be required to meet the state's wholesaler licensing requirements." Interstate wholesale distributors would prefer to need licensing only in states where their facilities are located. The NARD suggestion would presumably apply to mail-order pharmacies as well as other pharmaceutical distributors. The FDA draft's stipulation that "mere shipment of prescription drugs into a state does not necessarily require licensing [is] a reiteration of statutory language," NARD acknowledged. Nonetheless, the association recommended that "the agency, in fact, encourage licensure where the nexus involves a shipment of Rx drugs into the state." The principal target of the act, the association noted, "are those criminals who are well organized and engaged in conduct that threatens the health care of consumers utilizing prescription drugs, and undermines fair competition for retailers and wholesalers who serve the consumers." NARD also requested "additional clarity" from FDA regarding the respective enforcement roles of U.S. attorneys, the FBI, the HHS Inspector General, and their "interface with [states'] 'little FDA statutes,' which incorporate by reference all changes in federal statutes." State food and drug laws, the association noted, "coincidentally are within the jurisdiction and responsibility of those states' boards of pharmacy." The association criticized the guideline's reference to a Justice Department proposal to rescind the wholesaler licensing requirements of the drug diversion law. "We take strong exception to the agency's reiteration of reservations expressed by" the Administration to the wholesaler provisions, NARD said. Those reservations were "considered and overwhelmingly rejected by the U.S. Congress," and it is therefore "totally inappropriate in the cited proposed rule to allude to . . . the Department of Justice draft legislation" referred to Congress, the association maintained. "Noting the reservations and noting the proposed repealer are not consistent with the obligation of the agency to take all steps to appropriately implement what is now law throughout the U.S.," the association argued. "Obviously, if the law is changed by some later Congress, the proposed rule, or some later final rule would become moot. To note such a remote prospect in the cited rule-making serves only to undermine proper implementation, and otherwise makes the task of those truly committed to preventing the diversion of prescription drugs even more difficult." In September, the Justice Department forwarded to Congress proposed legislation to amend the drug diversion law. The proposal would repeal wholesaler licensing provisions of the act on the ground that they represent "a substantial intrusion into traditional state responsibilities and prerogatives." The proposal adds: "It is not apparent that such intrusion into an area traditionally regulated by the states is either necessary or appropriate." The act's wholesaler licensing provisions would effectively "prohibit prescription drug wholesaling in any state that does not adopt federal licensing standards," the department added in a letter attached to the proposal. Signed by Acting Assistant Attorney General Thomas Boyd, the letter notes the act's stipulation that a wholesale distributor may not do business in any state where it is not licensed. When President Reagan signed the act, he said that he had "grave reservations" about the provisions and ordered Justice to propose legislation to repeal them ("The Pink Sheet" May 2, T&G-9). The National Association of Chain Drug Stores urged the FDA not require chains to provide to its individual pharmacies paper trails of its product sources. "The intent of the legislation and the interpretive letter is to regulate transactions between wholesalers in interstate commerce," NACDS argued in Sept. 30 comments on FDA's Aug. 1 letter outlining its interpretation on the overall law. "Thus, an 'authorized distributor' who sells prescription drugs in interstate commerce is not required to maintain and provide an 'identifying statement' to its buyers." Merck Sharp & Dohme said FDA's tentative guidance could discourage sample distribution by mail or common carrier. The agency's proposed requirement that samples should be delivered only to individuals authorized to receive them "would have the unintended effect of discouraging sample delivery by mail or common carrier," MS&D maintained in Oct. 6 comments. Instead, the company suggested, the agency should "simply require that a licensed practitioner requesting delivery of a prescription drug sample to the pharmacy of a hospital or a health care entity include the name and address of the pharmacy" on the request form. Mandating hospitals and other health care entities to identify persons authorized to accept samples "is highly impractical and unnecessary," MS&D maintained. Furthermore, it "is not required or authorized by the Prescription Drug Marketing Act, even for delivery by mail or common carrier." Merck added that the agency should delete a proposed requirement that manufacturer representatives receive a receipt for delivered samples. The act requires only that doctors sign a written request for delivery, the company said. The company also urged FDA to delete the reference to "manufacturers' and distributors' representatives" from the guidance letter's definition of "wholesale distributor." Merck reasoned that the act was not intended to impose wholesaler requirements for storage and recordkeeping on sales reps. The Pharmaceutical Manufacturers Association asked that the agency's position on hospital returns accommodate the "diverse returned goods policies" of "individual PMA member companies." In Oct. 7 comments, the association said its principal concern "is that FDA not attempt to mandate a returned goods policy or system which could prove to be burdensome or unworkable for manufacturers who handle returned goods in various manners depending on individual marketing and distribution strategies." PMA also urged that FDA allow for "standing requests" for drug samples. The association asked that FDA's reg allow for standing requests with the limitation included in the report.

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