Vermont Updates Rules to Align Regulation with the DSCSA – And Then Some

The DSCSA has had wide-ranging implications on state regulation of the pharmaceutical supply chain. But are some states using it as an opportunity to increase their oversight which has resulted in onerous requirements for the industry? 

Background

In early 2019, Vermont officially overhauled their license types to align with the FDA’s definition of wholesale distributor by breaking out a separate license type for manufacturers (see their policy here). Specifically, Vermont defined, and began to require licensure for, Virtual Manufacturers, Virtual Distributors, Contract Manufacturers, Repackagers, Relabelers, and Brokers.

Per the Board, the motivation was that the most recent federal definition (per the DSCSA Title II) of `wholesale distributor’ explicitly excluded “a manufacturer, a manufacturer’s co- licensed partner, a third-party logistics provider, [and] repackager.”

Controversy

However, in a move similar to Nevada and Arizona, Vermont took it one step further – they explicitly state that it’s their “expectation that all entities involved in the drug supply chain that results in prescription drugs entering Vermont shall be licensed.”

This, possibly unfairly, requires companies that do not sell into the state of Vermont to obtain a license. Although the state only has a population of .1% of the USA, the policy will likely affect virtually all Virtual Manufacturers, Contract Manufacturers, Repackagers and Relabelers, generating millions of dollars of revenue annually.

We have received consistent feedback from industry, both trade groups, and actual clients, that Vermont’s interpretation is unconstitutional and should be overturned. Although a legal showdown would be interesting, my bet is that companies will simply pay the $700 per year.

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Pharma Solutions promotes the quality, security, and integrity of the pharmaceutical supply chain through consulting and administrative solutions that leverage innovation, expertise, and technology.  We are hyper-focused on client care and meeting client objectives. Our full process management State Compliance Services cover clients from the initial assessment of requirements all the way through new licensure acquisition to renewals and on-going maintenance of compliance.

To learn more about our State Compliance Services,  email hello@fiveriversrx.com and set up a free consultation today.