The chain of custody behind an imported Canadian drug

A straight line with no branches

The security design of the drug importation rules is a single unbranched path, and every link is written as a requirement rather than a preference.

The program sponsor has to ensure that each drug was approved and labeled for sale in Canada by the manufacturer before it reaches the foreign seller.

For a drug manufactured outside Canada, it has to have been authorized for import into Canada by the manufacturer, and not merely shipped through Canada on its way somewhere else.

Then the two links that define the model. "the drug was sold by the manufacturer directly to a Foreign Seller", and "the Foreign Seller ships the drug directly to the Importer in the United States".

No wholesaler sits between any pair. A product that passed through a broker would not satisfy the sentence.

The loop closes at the other end too. Returned drugs "are properly dispositioned in, and not exported from, the United States."

The manufacturer has to hand over its own paperwork

One short paragraph does a lot of work, because it forces documents across a commercial boundary.

For each transaction, the manufacturer must give the importer a copy of all transaction documents it provided to the foreign seller, "within 30 calendar days of receiving the Importer's request".

So the importer can compare what the seller says against what the manufacturer says, using the manufacturer's own records.

That comparison is later made compulsory. On receiving a drug and records from the foreign seller, the importer must compare that information with what it received from the manufacturer, including documentation about the transfer of ownership for the Canadian market.

What a seller does when a product looks wrong

The foreign seller has to run two determinations: whether a product is suspect, and whether it is illegitimate.

On finding a product suspect, or on the agency asking for verification of one, the seller must "Quarantine such product within its possession or control until such product is cleared or dispositioned".

It then investigates promptly, with the importer and manufacturer as applicable, and verifies the product at the package level. Where a suspect product turns out not to be illegitimate, the agency is told for the products it asked about.

Illegitimate product is handled harder. It is quarantined away from product intended for distribution, dispositioned, and the seller has to help the manufacturer or importer deal with any illegitimate product outside its own control.

A sample has to be kept for physical examination or laboratory analysis by the manufacturer or an official on request.

Notification is fast. The seller must tell the agency and the importer it received such product "not later than 24 hours after making such determination."

And the paper survives a long time: records of the disposition are kept "for not less than 6 years after the conclusion of the disposition."

The serial number, and where it is allowed to go

On receiving a shipment from the manufacturer, the foreign seller has to physically split it.

It separates the portion intended for the United States and must "store such portion separately from that portion of product intended for sale in the Canadian market".

It then assigns a serial identifier to each package and homogenous case bound for the United States, unless one bearing a manufacturer-applied product identifier arrived already.

The placement rule is unusually specific, and it exists because the product is still carrying Canadian labeling. The identifier "must be located on blank space on the package or homogenous case and must not obscure any labeling for the Canadian market", including the Canadian drug identification number.

The seller keeps records associating that identifier with the Canadian number, and all the records received from the manufacturer, for not less than six years.

Verification is on a clock too. When someone downstream asks whether an identifier matches one the seller applied, the seller answers within twenty-four hours, or another reasonable time the agency sets.

A mismatch is not a clerical matter. If the identifier does not correspond to one the seller applied, the seller must treat the product as suspect and investigate.

Twelve items on every transaction record

For each transaction between the foreign seller and the importer, twelve items have to be provided.

They start with a statement that the seller purchased the product directly from the manufacturer, and continue through the proprietary and established names, strength and dosage form, container size, and number of containers.

Then the traceable ones: the manufacturer-assigned lot number, the transaction date, and the shipment date where that is more than twenty-four hours later.

Then the parties, by business name and address on both sides of the ownership transfer.

And finally the two identifiers that make the chain checkable: the serial identifier for each package and homogenous case, and the Canadian drug identification number for each product.

On request in a recall or an investigation, the seller has to promptly give an official information about its transactions with both the manufacturer and the importer.

What the importer may and may not do to the package

The importer's first duty is a sourcing rule. "An Importer of an eligible prescription drug must purchase the drug directly from a Foreign Seller in Canada."

Its second is the relabeling operation, and the constraint on it is the interesting part.

The importer facilitates the application of a product identifier for all such drugs, and that has to happen at the same time the product is relabeled with the required United States labeling. Beyond repackaging necessary to do that relabeling, the importer "cannot otherwise relabel or repackage the product".

The work can be contracted out to a facility registered with the agency, on the same condition, and that contractor has to meet the applicable repackager requirements even if it is not otherwise repackaging.

A gate applies to whoever applies the identifier. It may go only on a package that already carries a serial number assigned and applied by the foreign seller.

Record duties run for six years on both halves: the product identifier information, and records associating that identifier with the seller's serial number and the Canadian drug identification number.

The exemptions, and what replaces them

Ordinary supply chain security law assumes a domestic chain of authorized trading partners, which this program does not have.

So the importer is exempted from four specific prohibitions, and each exemption is paired with a substitute.

It is exempt from the bar on receiving product without transaction history, information and statement, provided it receives the information this part requires from the foreign seller.

It is exempt from the bar on receiving product not encoded with a product identifier, provided the product carries the seller's serial identifier.

It is exempt from the bar on transacting with an entity that is not an authorized trading partner. It is also exempt from verifying a standardized numerical identifier at package level, provided it verifies the seller's identifier on each package and homogenous case.

Read together, the seller's serial identifier is doing the job the domestic product identifier normally does, until the point of relabeling.

Entry, and a warehouse within thirty miles

Every shipment has to arrive with a formal electronic entry filed in the customs system and designated as a drug imported under this program.

Entry is confined to a port the agency has authorized for the purpose.

Then comes the detail that makes the whole thing physical. The product is held at a secured warehouse, a location within a specific foreign trade zone, or another secure distribution facility controlled by or under contract with the importer. Conditions there must maintain product integrity, and it stays until the agency issues an admissibility decision.

And that place cannot be anywhere. "The secured warehouse or other secure distribution facility must be within 30 miles of the authorized Port of Entry for examination."

If entry is filed before testing and relabeling, the importer has to apply to bring the drug into compliance and then relabel and test under a plan the agency approved.

Testing every batch, in triplicate

On arrival of an initial shipment containing a batch, "the Importer must select a statistically valid sample of that batch to send to a qualifying laboratory". That applies unless the manufacturer does the required testing itself.

Subsequent shipments made up entirely of an already tested batch are sampled the same way.

The agency does not take the result on faith. Whoever sampled "must send three sets of the samples" that went to the qualifying laboratory to a named agency field laboratory.

A full package of documentation follows. Laboratory records, a detailed description of the sampling method, and the testing protocols. Then complete data from all tests needed to show the drug meets the approved product's specifications, a certificate of analysis, and supporting documentation.

Only after the agency reviews and accepts those results does relabeling happen. The agency notifies the importer, and then "the Importer must cause the eligible prescription drug to be relabeled with the required U.S. labeling."

A written certification to the agency closes the sequence once testing and relabeling have shown the requirements are met.

What has to happen after the drug is in the country

The post-importation section opens with a kill switch, and it is broader than a product recall.

The trigger is broad. It covers a drug, a manufacturer, a foreign seller, an importer, a qualifying laboratory, or any other participant or element of the supply chain failing to meet all applicable requirements. On determining that at any point, "the SIP Sponsor must immediately stop importation of all drugs under the SIP, notify FDA, and demonstrate to FDA that importation has in fact been stopped."

One failing participant stops everything, and stopping has to be demonstrated rather than asserted.

Importers also file the field alert reports the ordinary application rules require, to both the manufacturer and the agency, with additional reporting where a device part is involved.

The side effect reporting duties, and their clocks

The importer has to establish records and report all adverse events associated with use of the drugs it imported, and to promptly review all domestic safety information it receives.

Two clocks run. Serious and unexpected domestic events reported spontaneously go to the agency and the manufacturer as expedited reports, as soon as possible. The outer limit is "no later than 15 calendar days from the date when the Importer has both met the reporting criteria" and acquired a minimum data set.

The standard there is important. The duty applies "whether or not the Importer believes the events are related to the product."

Everything else, meaning serious but expected events and nonserious ones, is reported "within 90 calendar days" of the same trigger.

Follow-up reports run on the fifteen-day clock too, and the importer has to actively chase missing data rather than wait for it.

The chasing is auditable. "The Importer must document and maintain records of its efforts to obtain the minimum data set."

And on written notice, supporting documents held in the safety files, such as medical records, laboratory results or death certificates, have to be produced "within 5 calendar days of the FDA notice."

What this is worth to a reader of this market

The value here is a benchmark. This is what a lawful cross-border prescription drug channel is required to look like, written out in one place.

A single named manufacturer selling direct. One foreign seller. One importer. A serial identifier on blank label space. A secure facility within thirty miles of an authorized port. Batch testing with three sets of samples sent to a government laboratory. Six-year records at every link.

Set that against any offer that arrives as a parcel from overseas, and the comparison answers itself. None of these controls exists in that transaction.

One limit on this article. Only three sections of part 251 were read in full, and the definitions section was not re-read for this piece. The statute behind the program, and the customs and testing provisions cross-referenced, were not examined.

No claim is made here about whether any importation program is currently operating, or about who sponsors one. It describes the requirements the regulation sets for one that is authorized.

Sources

Each document below is named as it names itself, with the date printed on that document rather than the day it was read.

1. Title 21 Code of Federal Regulations section 251.14, Supply chain security requirements for eligible prescription drugs, read in full for the direct-sale chain, the manufacturer document duty, suspect and illegitimate product handling, the serial identifier and its placement, the twelve transaction items, the importer relabeling limits and the four exemptions — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
2. Title 21 Code of Federal Regulations section 251.17, Importation requirements, read in full for the electronic entry, the authorized port, the thirty mile secure facility rule, the batch sampling, the three sample sets and the sequence ending in relabeling and certification — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020
3. Title 21 Code of Federal Regulations section 251.18, Post-importation requirements, read in full for the stop-importation duty, field alert reporting, and the adverse event reporting scope, clocks, record contents and documentation duties — Electronic Code of Federal Regulations, Office of the Federal Register, October 2020