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Pedigree Laws and their Impact on the Animal Health Industry Annual Update. Randy Lewis MWI Veterinary Supply Co. Manager of Compliance & Regulatory Affairs. Background Information. In 1987, The Prescription Drug Marketing Act (PDMA) was enacted. The main goals of this act were:

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pedigree laws and their impact on the animal health industry annual update
Pedigree Laws and their Impact on the Animal Health IndustryAnnual Update

Randy Lewis

MWI Veterinary Supply Co.

Manager of Compliance & Regulatory Affairs

background information
Background Information

In 1987, The Prescription Drug Marketing Act (PDMA) was enacted.

The main goals of this act were:

  • Ban the sale of drug samples
  • Ban re-importation
  • Require state licensing of wholesale distributors
  • Pedigree – This requirement was stayed until December 1, 2006.
fda nabp activities
FDA & NABP Activities
  • February 2004 – FDA issues a report entitled “Combating Counterfeit Drugs: A Report of the Food and Drug Administration.” NABP develops the Model Rules for the Licensure of Wholesale Distributors.
  • March 2005 – At the request of the FDA, NABP publishes a revised version of the Model Rules for the Licensure of Wholesale Distributors. The revision addressees more stringent state licensing requirements and calls for the pedigree requirements.
  • May 2005 – FDA publishes the annual update on the “Combating Counterfeit Drugs: A Report of the Food and Drug Administration.” The FDA summary applauds the efforts of the NABP toward tighter control of wholesale distributor licensing. FDA keeps a “wait and see” attitude towards the federal pedigree date of 12/1/06.
fda nabp activities1
FDA & NABP Activities
  • February 2005 – NABP Launches the Verified Accredited Wholesale Distributor (VAWD) program.
  • May 2005 – IN Governor signs licensing bill mandating VAWD.
  • February 2006 – NABP accredits the first 2 VAWD wholesale distributors.
  • June 2006 – FDA announces that the stay of the pedigree provision will be lifted December 1st 2006. Pedigree required for all non-ADR transactions.
  • November 2006 – FDA issues an industry compliance guide for PDMA pedigree implementation.
  • December 2006 – A group of secondary wholesalers are granted a temporary injunction regarding specific provisions of the pedigree requirements.
pdma pedigree requirements
PDMA Pedigree Requirements

§203.50 Requirements for wholesale distribution of prescription drugs:

  • (a) Identifying statement for sales by unauthorized distributors. Before the completion of any wholesale distribution by a wholesale distributor of a prescription drug for which the seller is not an authorized distributor of record to another wholesale distributor or retail pharmacy, the seller shall provide to the purchaser a statement identifying each prior sale, purchase, or trade of such drug. This identifying statement shall include:
  • (1) The proprietary and established name of the drug;
  • (2) Dosage;
  • (3) Container size;
  • (4) Number of containers;
  • (5) The drug's lot or control number(s);
  • (6) The business name and address of all parties to each prior transaction involving the drug, starting with the manufacturer; and
  • (7) The date of each previous transaction.
court injunction
Court Injunction?

What is affected by the preliminary injunction?

21 CFR § 203.50(a). The court order enjoins FDA from implementing 21 CFR § 203.50(a). 21 CFR § 203.50(a)(6), states that information regarding “each prior transaction involving the drug, starting with the manufacture” be included in the pedigree. However, while the preliminary injunction is in effect, pedigrees shall include information regarding prior transactions going back to the manufacturer or the last ADR that sold, purchased, or traded the prescription drugs. FDA encourages wholesalers to include information regarding each prior transaction going back to the manufacturer when that information is available.

court injunction1
Court Injunction??

What is not affected by the preliminary injunction?

Pedigrees still must be passed by non-authorized distributors of record (non-ADR) prior to each wholesale distribution. In addition, the court does not mention other pedigree-related regulations or other agency-issued documents relating to the pedigree requirement. Accordingly, those regulations and documents are not affected by the preliminary injunction.

court injunction2
Court Injunction???

The group of wholesalers that filed the injunction against the FDA are NOT trying to have the courts dismiss pedigree entirely. All the members involved in this suit have fully functional compliant pedigree programs. The law suit is focused at how far back in the supply chain a pedigree must originate, and who must provide a pedigree.

The FDA issued a compliance guide on 12/18/06 regarding the injunction. On 2/1/07, the FDA filed an appeal concerning the temporary injunction. This appeal process could take several months before any resolution may be reached.

authorized distributor of record
Authorized Distributor of Record

The PDMA requires distributors to pass a pedigree on all transactions that they are not the authorized distributor of record (ADR).

ADR status is obtained by entering into a written agreement with the manufacture to distribute all or specific products. The manufacturer must maintain a list of all ADR distributors.

other legislation
Other Legislation

Pharmaceutical Market Access and Drug Safety Act of 2007 (Introduced in House)

H.R.380

Title: To amend the Federal Food, Drug, and Cosmetic Act with respect to the importation of prescription drugs, and for other purposes.

Sponsor: Rep Emanuel, Rahm [IL-5] (introduced 1/10/2007)

Cosponsors (89)

Related Bills:S.242

Latest Major Action: 2/2/2007 Referred to House subcommittee. Status: Referred to the Subcommittee on Commerce, Trade and Consumer Protection.

other legislation1
Other Legislation

Tim Fagan’s Law

H.R.2345

Title: To amend the Federal Food, Drug, and Cosmetic Act to increase criminal penalties for the sale or trade of prescription drugs knowingly caused to be adulterated or misbranded, to modify requirements for maintaining records of the chain-of-custody of prescription drugs, to establish recall authority regarding drugs, and for other purposes.

Sponsor: Rep Israel, Steve [NY-2] (introduced 5/12/2005)      

Cosponsors (14)

Related Bills:H.R.1396, S.1978

Latest Major Action: 5/23/2005 Referred to House subcommittee. Status: Referred to the Subcommittee on Health.

what would this mean
What Would This Mean?
  • These legislative changes would strike the exemption from pedigree for manufacturers and ADR’s.
  • California will require electronic pedigree from manufacturer through all distributions in 2009. Other states have addressed ADR and “normal chain of distribution.”
slide14
VAWD

Indiana requires all wholesalers licensed in their state to become VAWD certified. VAWD stands for the Verified Accredited Wholesale Distributor certification. All current license holders must attain this status by the renewal period of 9/30/07. All new license applicants must achieve VAWD status prior to issuance of a wholesaler permit by the board.

The process includes among others; a $100,000 surety bond, background checks, designated representative, review of standard operating procedures (SOP’s), and a complete facility inspection.

Facilities must pay an initial $5000 application fee, a $1000 annual fee, and a $5000 re-inspection every three years.

As of 4/16/07, 95 facilities have successfully completed this VAWD process.

Other states may require this VAWD accreditation as new legislation is enacted. CO, ID, MD, ND, OK, and OR among others have referenced VAWD in some manner in their legislation.

slide15
VAWD

Oregon – Adopted rules 12/19/06

855-065-0006

Registration Requirements

(5) Any wholesale distributor located outside the boundaries of Oregon, applying for registration or re-registration, as a Class 1 Wholesaler, after January 1, 2008 must provide evidence of one of the following:

  • A current license or registration as a wholesale distributor in a state that has a license or registration procedure approved by the Board that included a physical inspection within the past three years; or

(b) A current accreditation by a process approved by the Board such as The National Association of Boards of Pharmacy’s Verified Accredited Wholesale Distributor (VAWD) program or other nationally recognized accreditation program or contract inspection service.

slide16
VAWD

North Dakota – Passed Legislation. Meeting 5/17/07 to discuss draft proposed rules.

43-15.3-04. Requirements to distribute prescription drugs.

1. A person may not engage in wholesale distributions of prescription drugs without, after December 31, 2007, obtaining and maintaining accreditation or certification from the national association of boards of pharmacy's verified accredited wholesale distributor or an accreditation body approved by the board under subsection 4, obtaining and maintaining a license issued by the board, and paying any reasonable fee required by the board.

3. The board may adopt rules that permit out-of-state wholesale drug distributors to obtain a license on the basis of reciprocity if an out-of-state wholesale drug distributor possesses a valid license granted by another state and the legal standards for licensure in the other state are comparable to the standards under this chapter and the other state extends reciprocity to wholesale drug distributors licensed in this state. However, if the requirements for licensure under this chapter are more restrictive than the standards of the other state, the out-of-state wholesale drug distributor must comply with the additional requirements of this chapter to obtain a license under this chapter.

slide17

Pedigree Requirements by State

WA

ME

VT

MT

ND

MN

NH

OR

MA

NY

WI

ID

SD

RI

CT

MI

WY

PA

IA

NJ

NE

OH

DC

DE

NV

IL

IN

MD

UT

WV

VA

CO

KS

KY

MO

NC

CA

TN

Pink = Passed and/or rules adopted

Blue = Passed, rules pending

Green = Passed

Yellow = Proposed

Red = None

OK

SC

NM

AR

AZ

AL

GA

MS

LA

TX

FL

AK

HI

other state activities
Other State Activities
  • Surety Bonds – AZ, CO, FL, IN, NV. $100,000 per facility.
  • Designated Representative – Pharmacy exam knowledge CA, FL. Financial background checks, fingerprints, minimum experience requirements.
  • Require out-of-state entities to become licensed by the state. NJ and NE previously did not require licensing of non resident wholesalers.
  • Nevada – Electronic monthly reporting of all pedigree transactions effective 2/15/07.
summary
Summary
  • The PDMA pedigree is here to stay. Although the injunction was granted on certain elements, the pedigree provision is still in effect. Today, any wholesaler who is not the ADR must pass pedigree including all transactions back to the manufacturer or last ADR.
  • States are rapidly passing pedigree and other wholesaler legislation. States may pass laws which are more stringent than the federal PDMA. Florida and Indiana are examples of states that require additional information to be included for pedigrees in their states.
  • For additional information on the federal PDMA please visit the following link:

http://www.fda.gov/cder/regulatory/PDMA/default.htm#relevantguidances

slide20

DEA UpdateFDA InspectionsState IssuesRonald W. Buzzeo, RPhChief Regulatory OfficerBuzzeoPDMADendrite Regulatory Compliance804.267-1740 x120ron.buzzeo@dendrite.com

the changing landscape yesterday vs today what is driving change
The Changing LandscapeYesterday vs. Today – What is Driving Change

Increased Federal Oversight

  • FDA
    • PDMA
  • DEA
  • US Attorney

Increased State Oversight

  • Regulatory Boards
    • Drug Distributor Licensing
    • Drug Pedigree
    • Stricter Guidance on Wholesale Drug Distribution
    • Theft and Loss Reporting
objectives
Objectives

To discuss and better understand the:

  • DEA Issues
  • PDMA Issues
  • State Regulations
  • Penalties
dea requirements regulatory issues
DEA Requirements/Regulatory Issues

Registration

  • Signature
  • Type of Registration
  • Activities
    • Research, Distribution and Manufacturing

Security

  • Access
  • Employee Theft
  • In-Transit Losses

Inventories

  • Accuracy
dea requirements regulatory issues1
DEA Requirements/Regulatory Issues

Records

  • Data Elements
    • Name, Address, DEA Registration Number
    • Drug, Strength, Form, Quantity, Number of Commercial Containers
  • Schedule II
    • DEA Form 222
    • Distribution/Receiving Record

Reporting

  • Thefts and Losses
  • ARCOS
drug pedigree update
Drug Pedigree Update
  • Federal Requirements
  • State Requirements
federal statutory requirements
Federal – Statutory Requirements
  • Wholesale Distributors; guidelines for licensing
  • Manufacturer and Authorized Distributor of Record (ADR)
  • ADR – Ongoing Relationship
  • Statement Identifying each prior sale (currently back to last ADR)
    • Date of Transaction
    • Names and addresses of all parties to the transaction
federal regulatory requirements
Federal – Regulatory Requirements
  • 21 C.F.R. § 203 and 205
  • FDA’s appeal filed 2/1/07
  • Defines ongoing relationship
  • Establishes information required on pedigree (while injunction in effect)
    • Last ADR handling drug
    • Business name and address of all parties to each prior transaction starting with the manufacturer traceable back to the last ADR
    • Date of each previous transaction back to ADR
  • 69 FR 12792 – March 18, 2004 – delayed effective date.
  • 71 FR 34249 –June 14, 2006 – effective date Dec. 1, 2006
  • RxUSA Wholesale Inc. et al vs. Department of Health and Human Services CV 06-5086 (E.D.N.Y. December 4, 2006) Order granting preliminary injunction
  • FDA filed Notice of Appeal on February 1, 2007
states with enacted proposed legislation relative to drug pedigrees
States with Enacted & Proposed Legislation Relative to Drug Pedigrees
  • 17 states with statutes and/or regulations addressing drug pedigree or equivalents
  • 14 states with pending legislation on drug pedigree or equivalents
drug pedigree states with enacted and or pending laws updated april 23 2007
Drug Pedigree States with Enacted and/or Pending Laws(updated April 23, 2007)

WA

ME

MT

ND*

MN

VT

NH

OR

MA

NY

CT

WI

ID*

SD*

RI

WY

MI

NJ

PA

IA

DE

NE

MD

DC

OH

NV

IL

IN

WV

UT

CO

VA

KS

MO

KY

CA

NC

TN

OK

SC

NM

AR

AZ

Federal

GA

AL

MS

LA

TX

FL

AK

Passed Legislation or Regulation

HI

Pending Legislation or Regulation

Passed and Pending Legislation or Regulation

  • - Newly passed legislation not effective until July 1, 2007
changes in passed enacted pedigree legislation
Changes in Passed/Enacted Pedigree Legislation

Includes states with pending legislation on or before 7/1/2007.

Does not include effective state rule making or enforcement activities (subject to change)

Total to Date 31

61% of all States & DC have passed Pedigree Legislation

slide34
Who Prepares the Drug Pedigrees?
  • Do Samples require a Pedigree?
pedigree impact to veterinary wholesalers distributors
Pedigree Impact to Veterinary Wholesalers/ Distributors
  • Meeting federal criteria on ADR status – vendor relationship and agreements
  • Recordkeeping provisions
  • Completing manual and electronic pedigree papers specific to state requirements
  • Handling drop shipments and complying with state pedigree
  • Authentication Process – random, every transaction
  • Returns Processing
  • Credits on Returns
  • Potential audits – federal and state
  • Repackaging activities
florida pedigree concerns impact to industry and authority
Florida Pedigree Concerns – Impact to Industry and Authority

Status of Florida Senate Bill 2122 Revisions

  • As of 4/13/07 in Agriculture Committee
  • Addresses industry and Department of Health concerns
  • Language variation on “Persons required to have Limited Prescription Drug Veterinary Wholesaler Permit”

Industry Concerns

  • Parent company and limitation of related entity product transfers
  • Delay of primary application approvals
  • Potential denial of existing registration applications

Department of Health Concerns

  • Potential for unregulated transfers
state licensing requirements for distributors
State Licensing Requirements for Distributors

Some states are exempting manufacturers and/or third party distributors from these rules

  • Extensive application and criminal background check of applicant
    • All senior personnel involved in the facility operations
    • Expense of applicant
  • Surety bond of not less than $100,000
  • Pedigree Requirement
  • Pedigree Authentication – Routine and Random
  • Designated Representative
  • Authorized Distributor of Record
  • Shipment Examination
  • Routine Facility Inspections
  • States beginning to implement VAWD (Indiana, Oregon, North Dakota)
  • Licensing
    • In-state
    • Out-of-state
licensing requirements1
Licensing Requirements
  • What states requires licensing for sales reps?
    • What type of drugs?
  • What state requires the employer to provide info on the sales reps?
    • What type of drugs?
  • My distributor takes possession, do they require state licenses?
  • We distribute samples to veterinarians, do we require state licenses?
  • How many state licenses are required?
  • I am a virtual company yet perform no marketing or sales do I require state licenses? How many?
  • I am a virtual company and perform marketing and sales do I require state licenses? How many?
distributor requirements rx and controlled
Distributor Requirements Rx and Controlled

WA

ME

VT

MT

ND

MN

NH

OR

MA

NY

WI

ID

SD

RI

MI

WY

CT

PA

IA

NJ

NE

OH

DC

DE

IL

IN

NV

MD

UT

WV

CO

VA

KS

KY

MO

NC

CA

TN

OK

SC

NM

AR

AZ

AL

GA

MS

TX

LA

FL

AK

Registration not required

HI

PR

Registration required

industry requirements for state compliance
Industry Requirements for State Compliance

Wholesale Drug Distributor Registrations

  • Increased requirements for fingerprinting, surety bonds, release of personal information

State Pedigree Requirements

  • Distributing human drugs to the veterinary market
  • Lack of veterinary labeled products, specific to human use
  • Registration Verification

VAWD Accreditation

  • Concerns on NABP meeting State issued mandates for certification
    • Indiana
    • Oregon
    • North Dakota
penalties1
Penalties
  • Failure to Make a report on a Conviction – NMT $100,000
  • Provides Information – Waiver of Penalty
  • Conducts an Investigation – Waiver of Penalty
  • Person Provides Info – ½ the Criminal Fee – NMT $125,000
state penalties
State Penalties
  • State Penalties for Noncompliance
  • Selling and/or distribution without the appropriate registration may be subject to fines, penalties, misdemeanor or felony convictions and/or seizure of product
    • Sales Reps may have product confiscated, fined
  • Company penalties range from $50-$50,000 per violation per day
    • Violation Examples
      • Failure to obtain a registration
        • Florida – third degree felony; imprisonment up to 5 years and a $5,000 fine
        • Indiana – Class D felony; 3 yrs. maximum imprisonment and $10,000 fine
        • North Dakota – Class C felony; imprisonment up to 5 years and $5,000 fine
      • Noncompliance with state requirements (i.e., recordkeeping, inventories)
state penalties for noncompliance with pedigree
State Penalties for Noncompliance with Pedigree

Colorado

  • Colo. Rev. Stat. § 12-22-806 - Penalty.
  • (1) A person who engages in the wholesale distribution of prescription drugs in violation of this part 8 shall be subject to a penalty of up to fifty thousand dollars.
  • (2) A person who knowingly engages in the wholesale distribution of prescription drugs in violation of this part 8 shall be subject to a penalty of up to five hundred thousand dollars.
state penalties for noncompliance with pedigree1
State Penalties for Noncompliance with Pedigree

Florida – Offense Severity Ranking Chart

Florida Statute Felony Degree Description

499.0051(1) 3rd Failure to maintain or deliver pedigree papers.

499.0051(2) 3rd Failure to authenticate pedigree papers.

499.0051(6) 2nd Sale or delivery, or possession with intent to sell, contraband legend drugs.

784.07(2)(b) 3rd Battery of law enforcement officer, firefighter, intake officer, etc.

316.193(2)(b) 3rd Felony DUI, 4th or subsequent conviction.

499.0051(3) 2nd Forgery of pedigree papers.

499.0051(4) 2nd Purchase or receipt of legend drug from unauthorized person.

499.0051(5) 2nd Sale of legend drug to unauthorized person.

state penalties for noncompliance with pedigree2
State Penalties for Noncompliance with Pedigree

Iowa

  • Class C Felony

Idaho

  • Unknowing Violations. If a person unknowingly engages in the wholesale distribution of prescription drugs in violation of this act, the person may be fined not more than ten thousand dollars ($10,000).
  • Knowing Violations. If a person knowingly engages in wholesale distribution of prescription drugs in violation of this act, the person shall be imprisoned for any term of years, or fined not more than five hundred thousand dollars ($500,000), or both.
state penalties for noncompliance with pedigree3
State Penalties for Noncompliance with Pedigree

Wyoming

  • If a person unknowingly engages in the wholesale distribution of prescription drugs and acts in violation of subsection (n) of this section, the person may be assessed an administrative penalty not to exceed fifty thousand dollars ($50,000.00);
  • If a person knowingly engages in wholesale distribution of prescription drugs in violation of subsection (n) of this section, the person may be assessed an administrative penalty not to exceed five hundred thousand dollars ($500,000.00).
securing the supply chain pedigree update trends and the henry schein experience

Securing the Supply Chain: Pedigree Update – Trends and The Henry Schein Experience

Nancy F. Lanis, Esq.

Vice President, Regulatory and Legal Affairs

AVDA Annual Conference

May 1, 2007

topics
Topics
  • Pedigree Trends
  • The Henry Schein Experience
pedigree trends
Pedigree Trends
  • 2003: FL
  • 2004: CA
  • 2005: AZ, NV, VA, TX, IA, OK, CT, IN, MS, NJ
  • 2006: OR, NE, CO, VT, NM
  • 2007 (YTD): MD, ND, SD, ID, WY
pedigree trends vawd
Pedigree Trends - VAWD

States that Require VAWD

  • 2005: IN
  • 2007: ND

States that Recognize VAWD by Policy

  • 2005: OK, ID
  • 2006: AK, CO, CT, DE, IA, MA, MS, MT, NE, OR, SD, SC
  • 2007: NV

By Policy – means that the state that recognizes VAWD accredited or third party accredited facilities as meeting their state licensing requirements.

pedigree trends vawd wholesalers accredited
Pedigree Trends – VAWDWholesalers Accredited

VAWD Program was launched by the NABP in February 2004 with the introduction of Model Rules. It became required in Indiana in 2005.

pedigree trends1
Pedigree Trends
  • Prescription Drugs, no OTC, no Medical Devices
  • Human vs. Veterinary

The following 7 states listed below require a pedigree for all drugs because there is no distinction between veterinary or human drugs:

    • Oregon
    • Arizona
    • Texas
    • New Mexico
    • Colorado
    • Nevada
    • New Jersey
pedigree trends mfr adr wholesaler role
Pedigree TrendsMfr/ADR/Wholesaler Role
  • The trend has been that the pedigree starts with the first wholesaler. CA is the only state where pedigree starts with the manufacturer.
  • Most states impose pedigree requirements to non-ADRs (out of Normal Distribution). FL requires pedigree for all transactions.
  • Federal pedigree rules required pedigree back to mfr. Because of injunction PDMA currently requires back to last ADR.
pedigree trends2
Pedigree Trends
  • Authentication
    • PDMA – No Authentication
    • Enacted States – Allow for Random Authentication
    • Introduced Legislation – Some require 100% Authentication (i.e. Georgia, Texas)
  • Designated Representative

18 out of 21 States that have enacted pedigree rules require a Designated Representative.

pedigree trends3
Pedigree Trends

Paper vs. Electronic

pedigree trends4
Pedigree Trends
  • Due Diligence – The following require Supplier Due Diligence SOPs.
    • FL
    • VAWD
    • PDMA
  • Surety Bond

15 out of 21 States that have enacted pedigree rules require a Surety Bond.

pedigree trends5
Pedigree Trends

Returns

  • Florida – All returns must be listed on pedigrees if the wholesaler was not notified within 7 days of shipment that the product will be returned.
  • Nevada – Products returned from a wholesaler requires a pedigree.
  • PDMA – Pedigrees must be sent if the product leaves the normal distribution channel.
  • The following states follow the PDMA Model:
      • Idaho
      • Maryland
      • Wyoming
pedigree trends6
Pedigree Trends

Drop Ships

  • Florida – Pedigrees must be sent to the customer within 14 days of shipment.
  • Maryland – Pedigrees not required if it follows the normal chain of distribution.
  • PDMA – Pursuant to 21 CFR Section 203.5, the non-ADR seller must provide a pedigree to the purchaser.
  • PDMA INJUNCTION –Pedigree should include dates of all listed transactions and the names and addresses of all parties involved in all of those transactions. FDA recommends the lot or control number, dosage, and number and size of prescription drug containers also be included.
the henry schein experience1
The Henry Schein Experience

Henry Schein was recognized by the NABP and Indiana Board of Pharmacy for being the nation’s first wholesale drug distributor to earn VAWD accreditation across the Company’s key distribution centers.

the henry schein experience2
The Henry Schein Experience
  • RFID/Serialization (Track and Trace of Products)
    • Pilot Project with Department of Defense. As part of the DoD mandate, HSI will combine RFID technology with EDI transaction sets to transmit key shipment data to select DoD facilities.
the henry schein experience3
The Henry Schein Experience
  • Anti Counterfeit Awareness Training of Distribution Center Personnel
    • Provide guidelines to assist in identifying possible counterfeit drugs and to establish prompt and effective methods to notify appropriate government agencies when counterfeit or unlawful drug product is discovered.
the henry schein experience4
The Henry Schein Experience
  • Industry Conference Calls:
    • Regulatory representatives of a cross section of wholesalers located around the country.
    • Share industry intelligence on developing legislation, regulation and related industry affairs.
    • Networking tool (periodic as needed, recently weekly).