Life Science Compliance Update

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September 18, 2017

Ohio Drug Distribution Verification: America’s Key Battleground State Shakes Up the Pharmaceutical Supply Chain

Prescription

The pharmaceutical industry faces monumental challenges in the age of globalization within the United States: state laws and regulations that are more stringent than their federal counterparts. This article provides the historical context and current overview of Ohio’s laws, regulations, and sub-regulatory guidance concerning the distribution of prescription drugs, including drug samples, into and within the state, the verification requirements when distributing product to terminal distributors of dangerous drugs and prescribers, record retention responsibilities, and penalties for noncompliance. The article then examines the industry’s response from a major manufacturer, a distributor/third-party logistics provider, verification vendor, and compliance advisory vendors. It concludes with a call to action to the industry to form a new coalition to address state legislative and regulatory actions that have the potential to disrupt the entire supply chain.

The pharmaceutical industry faces a major dilemma: active state legislatures, administrative agencies, and state attorney generals. There is a plethora of reasons why states have turned their attention towards the manufacturers and trading partners, such as wholesale distributors and third-party logistics providers (“3PLs”). There is an opioid crisis gripping the nation, an ever-growing increase in healthcare costs, unstoppable negative publicity aimed at the pharmaceutical industry, an emboldened citizenry demanding their legislatures to do something, hospital and insurance lobbies joining the fight. As a result, state politicians are using all of this to their advantage to pass laws aimed at the industry.

This article discusses a law that has been on the books for over forty years, and amended numerous times, including a 2017 revision that lead to Ohio becoming pharma’s “key battleground state.”

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