shutterstock_146893151The International Warehouse Logistics Association (IWLA) applauds the action by U.S. Senate to pass the Drug Quality and Security Act. The new law creates a single, uniform, and national supply chain solution to safeguard the pharmaceutical distribution system to replace the fragmented and piecemeal system that varies today from state-to-state. The bill had previously passed the U.S. House and now goes to the President for his signature.

Congressional action on this legislation caps a nearly three-year effort that has multi-faceted impacts on the third-party logistics industry and IWLA’s government affairs efforts.

Congress amended the Federal Food, Drug, and Cosmetic Act (FFDCA) to establish uniform national standard for all supply chain participants. The bill establishes a national system for tracing pharmaceutical products through the supply chain and sets national licensing standards for third-party logistics providers. The traceability system is based on an ownership model whereby transaction information is provided upon a change of ownership rather than a change of possession.

This distinction is critical to IWLA members in defining the title holders of the products stored and overly burdensome regulations that typically group 3PLs in with manufacturers and wholesalers. Having one set of standards for 3PLs who handle pharmaceuticals in the supply chain set at the federal level helps IWLA override California and other states, who tried to impose their own version of 3PL regulation in the supply chain.

IWLA Washington Representative Pat O’Connor believes the key to success in this instance was IWLA’s early, engaged participation in the Pharmaceutical Distribution Security Alliance. With more than 25 member companies spanning the pharmaceutical supply chain, the Pharmaceutical Distribution Security Alliance’s (PDSA) “mission is to develop and help enact a federal policy proposal that enhances the security and integrity of the domestic pharmaceutical distribution system for patients, and to articulate a technical migratory pathway to implement such a policy.”

“When dealing with supply chain security and safety the influence stems from being recognized as an equal partner to the pharmaceutical manufacturers, primary and secondary wholesalers and distributors and pharmacies. By working with everyone in the sector, supporting both needs, we become stronger,” O’Connor says.

IWLA was supported by member companies UPS Supply Chain Solutions and DSC Logistics who also participated as PDSA board members.

O’Connor offers an additional perk in this victory: This is the first instance of documented recognition by the Federal Government of third-party logistics providers as an integral part of the supply chain.

“This is the first federal statute to contain a strong definition of a 3PL’s place in the supply chain,” O’Connor says. “The impact is now we can point to this law on other issues affecting 3PLs.”

View the full H.R. 3204 Summary and Status report.

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