Authorized Distributors of OTC Diabetic Test Devices

Most pharmacies are familiar with the basic requirements of the Drug Supply Chain Security Act (DSCSA), including the requirement to purchase prescription products from authorized suppliers. However, one important caveat of the DSCSA is that it does not apply to OTC products (such as diabetic test strips). Because of this, OTC wholesalers and distributors do not have to maintain or provide track and trace information (pedigree) to confirm the authenticity of these products. This makes it difficult for pharmacies to determine if they are purchasing from an appropriate source and if the low prices offered are for legitimate product.

During a PBM invoice audit, purchases made from suppliers that are not identified as “authorized” may not be accepted and you may be found to have a shortage leading to significant financial recoupments and possible network termination.

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  • Both Express Scripts and Caremark have required pharmacies to purchase test strips from “authorized distributors” of the manufacturer since 2016
  • OptumRx requires pharmacies purchase from suppliers that are licensed wholesalers and have NABP Drug Distributor Accreditation (DDA) formerly known as VAWD
  • Note that VAWD/DDA is not synonymous with “authorized distributor” status
    • For example, Masters Pharmaceutical has NABP DDA status but is NOT an authorized distributor of diabetic test strips
    • Some pharmacies have made the mistake of seeing “McKesson” on authorized distributor list and assumed that a subsidiary such as “Masters” is also authorized, even though not explicitly listed as such – if not explicitly listed, then confirm before purchasing
  • See August 2021 article Invoice Audit Pitfalls – Are Your Wholesalers Legitimate? for additional invoice audit considerations

Eric Hartkopf, PharmD