PBM Audits – Is DSCSA Documentation The Next Trap for the Unwary?

PBMs are constantly expanding and changing the scope of their audits to find new avenues for revenue generation and new grounds for network termination.  One area that seems ripe for expanded scrutiny by the PBMs is Drug Supply Chain Security Act (DSCSA) track and trace documentation.

In addition to checking the license status and FDA registration, a pharmacy must receive DSCSA track and trace documentation from its “authorized trading partners” to compliantly receive prescription drugs from that partner into its inventory.

This is not as straightforward as it sounds.  Track and trace documentation includes Transaction Information, Transaction History, and Transaction Statement (the so-called “T3” information).  Some pharmacies might be surprised to learn that this documentation is not only required from licensed wholesalers and distributors that supply prescription drugs, but also from other pharmacies if prescription drugs are loaned or traded.   Since 2015, health systems and pharmacies have been prohibited from accepting ownership of a product unless the previous owner can provide a complete T3.  Beginning on November 27, 2023, that information will be only available electronically, and the Transaction History will be retired. This means, beginning November 2023, a pharmacy will need a mechanism to receive and store the product information electronically and provide the Transaction Information and Transaction Statement—electronically—when transferring ownership of a product unless an exception applies. Dispensers are also required to capture and maintain all Transaction Information and Transaction Statements for not less than 6 years.

If you are confused about what products require tracing documentation, you are not alone.  The DSCSA does not specify products but rather lists some broad categories of items that are exempt, like over-the-counter medications, medical gases, and intravenous solutions.

What should you be doing to ensure the T3 “pedigree” documentation is accurate and internally consistent?  Perhaps as important, what should you do if it isn’t?

We predict DSCSA documentation will be another source of audit data used by PBMs to subject pharmacies to justify chargeback of claims or termination from the network. We also anticipate that the PBMs may inadvertantly misapply or misinterpret the DSCSA requirements by including products they shouldn’t or imposing track and trace requirements to circumstances they shouldn’t.

If you are a wholesaler with questions about DSCSA documentation or a pharmacy owner looking for help responding to or appealing a PBM audit, give Boesen & Snow Law a call.  We have extensive experience fighting PBMs and our results speak for themselves. Find out what we can do for you.