What Happens to a Medication Between the Factory and the Pharmacy

Answer first: the middle of the chain has a published floor

Most attention to drug supply lands on the two ends. A factory makes the medication and a pharmacy hands it over, and the warehouse between them is imagined as empty space.

It is not empty, and it is not unwritten. A federal regulation sets minimum requirements for the storage and handling of prescription drugs and for the distribution records that go with them.

One thing about that regulation has to be said before anything else. It is addressed to states, not to companies. Its own purpose section says it provides minimum standards, terms and conditions for licensing by state licensing authorities, and the operative section opens by saying the state licensing law shall include the requirements that follow.

So the floor described below is a floor states are told to build into their own licensing laws. Reading it tells you what a licensed distributor is expected to be doing, which is the useful part for anyone trying to picture the journey.

Who counts as a distributor, and who does not

The regulation applies to wholesale distribution of human prescription drugs in interstate commerce, and it defines the distributor broadly. The list expressly includes manufacturers, repackers, own-label distributors, private-label distributors, jobbers, brokers, warehouses of several kinds, independent wholesale drug traders, and retail pharmacies that conduct wholesale distributions.

The exclusions are as informative as the inclusions. Wholesale distribution does not include intracompany sales, and it does not include dispensing a drug pursuant to a prescription, which is what keeps a filling pharmacy out of the category.

Several other carve-outs describe ordinary hospital and pharmacy life. Sales among health care entities under common control are out, as is the sale of minimal quantities by retail pharmacies to licensed practitioners for office use.

One carve-out is worth remembering during a supply squeeze. Transfers of prescription drugs by one retail pharmacy to another to alleviate a temporary shortage are treated as an emergency medical reason and fall outside wholesale distribution.

Temperature is a written requirement, not a courtesy

The storage rule is short and specific. Prescription drugs are to be stored at appropriate temperatures and under appropriate conditions in accordance with any requirements in the labeling of those drugs, or with requirements in the current edition of an official compendium.

There is a default for products whose labeling is silent. Where no storage requirements are established, the drug may be held at controlled room temperature as defined in an official compendium, so that its identity, strength, quality and purity are not adversely affected.

The rule then asks for evidence. Appropriate manual, electromechanical or electronic temperature and humidity recording equipment, devices or logs are to be used to document proper storage.

That last clause is the one worth carrying. Correct storage in the middle of the chain is meant to be a documented fact, not an assurance.

Somebody is supposed to look at the box

Two inspections bracket a warehouse stay. On receipt, each outside shipping container is to be visually examined for identity and to prevent the acceptance of contaminated drugs or drugs otherwise unfit for distribution.

The regulation says what that examination has to be capable of catching. It must be adequate to reveal container damage that would suggest possible contamination or other damage to the contents.

The second inspection runs the other way. Each outgoing shipment is to be carefully inspected for the identity of the products, and to ensure that nothing damaged in storage or held under improper conditions goes out.

Both feed the same record. The recordkeeping requirements described below apply to all incoming and outgoing prescription drugs.

The quarantine rule, including the one about an opened container

Product that fails a check does not go back on the shelf. Drugs that are outdated, damaged, deteriorated, misbranded or adulterated are to be quarantined and physically separated from other drugs until they are destroyed or returned to their supplier.

A second rule covers a subtler case. Any prescription drug whose immediate container, or sealed outer or sealed secondary container, has been opened or used is to be identified as such, quarantined and physically separated, until it is destroyed or returned.

Returns get a judgment test rather than a rule of thumb. If the conditions under which a drug was returned cast doubt on its safety, identity, strength, quality or purity, it is destroyed or returned to the supplier. The exception is where examination, testing or other investigation proves it meets the appropriate standards.

The regulation even names what to weigh. A distributor is to consider how the drug was held, stored or shipped before or during its return, and the condition of the drug and of its container, carton or labeling as a result.

Three retention periods that are easy to confuse

The records themselves have defined content. A distributor keeps inventories and records of all receipts and distributions. Those records name the source of the drugs, with the seller's name and principal address, the address the drugs shipped from, the identity and quantity involved, and the dates.

Those records are to be available for inspection and copying by authorized officials for three years after they are created. Records kept away from the inspection site and not electronically retrievable are to be produced within two working days of a request.

A second, shorter clock covers disposal. Written documentation of the disposition of outdated prescription drugs is to be maintained for two years after that disposition.

Neither of those is the six-year period people usually have in mind. That longer one belongs to the later tracing law, which is a separate system with its own documents, and mixing the three produces confident wrong answers about how far back a paper trail reaches.

The written procedures behind a warehouse door

A licensed distributor is expected to have written policies and procedures for receipt, security, storage, inventory and distribution, including procedures for identifying, recording and reporting losses or thefts and for correcting errors in inventories.

Four specific procedures are named. The first sends the oldest approved stock out first, allowing deviation only where it is temporary and appropriate.

The second is a recall procedure, and the regulation describes the three situations it has to handle. Action initiated at the request of a government agency is the first. The second is voluntary action by a manufacturer to remove defective or potentially defective drugs. The third is action taken to promote public health by replacing existing merchandise with an improved product or new package design.

The third is a crisis procedure covering a strike, fire, flood, other natural disaster, or a local, state or national emergency. The fourth segregates outdated drugs for return or destruction, with written documentation of what happened to them.

Security gets its own paragraph. Facilities are to be secure from unauthorized entry, with outside access minimized and well controlled. A well-lighted perimeter and access limited to authorized personnel are named, along with an alarm system to detect after-hours entry. A further security system protects against theft and diversion, including diversion hidden by tampering with computers or electronic records.

Where the license comes from, and what Congress asked for next

The licensing itself is statutory. No person may engage in wholesale distribution of a prescription drug in a state without a license. It comes from the state the drug is distributed from, or from the federal government where that state has established no licensure requirement.

Interstate movement adds a second license. If the drug is distributed across a state line, the distributor must also be licensed by the state it is distributed into, where that state requires licensure of distributors coming in.

The same statute points forward. Each of those licenses is to meet standards, terms and conditions established under a separate section, which directs national standards for the licensing of wholesale distributors.

That section lists what the standards are to cover. Storage and handling with facility requirements come first, along with the establishment and maintenance of distribution records. A bond or equivalent security follows, then mandatory background checks and fingerprinting of facility managers or designated representatives. The rest covers qualifications for key personnel, mandatory physical inspection of any facility used, and the barring of certain persons from licensure.

It also says who may perform that inspection. The licensing authority may conduct it, or may accept an inspection by the state where the facility sits. A third option is an inspection by a third-party accreditation or inspection service approved by the federal government or by the licensing state.

Where a compounded preparation leaves this road

Everything above describes the movement of a finished prescription drug through wholesale distribution. A compounded preparation is made and dispensed on a different route, and the corresponding documents differ.

That difference is a matter of definition rather than a criticism. A question framed for one route produces an answer that sounds evasive when asked about the other.

It also changes what a buyer can usefully ask. For a manufactured product the questions are about the chain and the records behind it. For a compounded one they are about the facility that prepared it and the state that licenses that facility.

Both are answerable questions. Neither is answered by the phrase supply chain on its own.

What this changes about a question you can ask

The most common supply question a mail-order buyer has is about temperature, and it is usually asked about the last leg. The written floor above is about every leg before that one.

A program describing its own logistics is describing its own arrangement. The regulation gives you a vocabulary for what a licensed intermediate step is expected to look like, which makes a vague description easier to test.

Three questions follow from it. Which licensed entities held the product before it reached the dispensing pharmacy, what documentation of storage conditions exists, and who to contact if a shipment arrives in a state that raises a doubt.

None of those has to be answered with a company secret. They are questions about a system that already has published minimum expectations, and asking them costs nothing.