By now, you should be familiar with the Drug Supply Chain Security Act (DSCSA). It has been with us since 2013 and has, for the most part, already been in effect for pharmacies since 2015.  And now we have the “last” phase of the law, Electronic Drug Distribution Security (EDDS) (see our Electronic Drug Distribution Security System Blog for information about EDDS), becoming effective on 11/24/2023.  So in the next few blogs, I want to discuss some of the key aspects already in place that you need to be compliant with, especially since it is expected we will see an increase in the number of audits coming from the FDA, State Boards, other regulators, and even PBMs. In this blog, we will be talking about Authorized Trading Partners (ATPs), ensuring the U.S. Drug Supply Chain and complying with the DSCSA starts here for pharmacies.

Authorized Trading Partners are those suppliers (wholesalers and manufacturers) from where pharmacies may order products according to the DSCSA. So for pharmacies, ensuring we order from ATPs is our first chance to protect the U.S. drug supply chain. Verifying your ATPs will help ensure the products are legitimate before they make it to the patients.

Are They Authorized?

So what is an Authorized Trading Partner? DSCSA defines authorized and trading partners as described below and is based on their function in the U.S. prescription drug supply chain:

  • Authorized – means:
    • in the case of a manufacturer or re-packager, having a valid registration in accordance with the FDA
    • in the case of a wholesale distributor, having a valid license under state law
    • in the case of a third-party logistics provider, having a valid license under state law
    • in the case of a dispenser, having a valid license under state law
  • Trading partner – means:
    • a manufacturer, re-packager, wholesale distributor, or dispenser from whom a manufacturer, re-packager, wholesale distributor, or dispenser accepts direct ownership of a product or to whom a manufacturer, re-packager, wholesale distributor, or dispenser transfers direct ownership of a product; or
    • a third-party logistics provider from whom a manufacturer, re-packager, wholesale distributor, or dispenser accepts direct possession of a product or to whom a manufacturer, re-packager, wholesale distributor, or dispenser transfers direct possession of a product.

Before doing business with a wholesaler, a pharmacy must verify that wholesaler is an authorized company to sell or distribute drugs in your state. This means going out to the website of the entity in your state that licenses wholesalers, typically the State Board of Pharmacy, and verifying they are licensed then printing a copy of their licensing page, including their license number and expiration date, showing they are legitimate. The printout should be saved for your records and updated as necessary when the license expires. This kind of due diligence will show any auditors that you are conducting Primary Source Verifications to ensure the legitimacy of your suppliers. Getting an original copy of their license to compare the data is also a good idea.

If you are ordering directly from manufacturers, you need to approach them with the same questions and obtain the same information from them. They will also have an FDA registration you would verify to ensure they are an FDA Registered Manufacturer.

If receiving controlled substances from any of these entities, always ensure you get a copy of the DEA Permit and a copy of the State Controlled Substance Permit (if applicable).

These licenses, registrations, and permits need to be maintained, and as they expire, you need to update them before ordering new products from a particular ATP.

What Are Some Red Flags When Considering Your Authorized Trading Partners?

How often do you receive a fax or email from a “so-called” drug wholesaler offering an expensive medication at a significantly reduced cost? Before considering this opportunity, you need to verify that they are authorized. If you cannot verify them, you should not order, and it might be a good idea to notify the State Board of Pharmacy. If they are authorized, you are not done yet. There are a few questions you need to ask yourself next:

  1. Why is there a deep discount? Most likely, you will receive a product that is short-dated and will need to be dispensed quickly. They may or may not be up-front about this, so ask.
  2. Is this an expensive product routinely on the FDA shortage list? Think about the recent issues we have seen with HIV and Hepatitis medication.

If this all checks out and you order the product, be extra vigilant when conducting your inspection of the product and comparison with the Transaction Data.

What About a Pharmacy as an Authorized Trading Partner?

I will only talk about pharmacies selling products to other pharmacies for this question. A pharmacy may sell products to another pharmacy under one of two conditions:

  • The pharmacies share common ownership
  • The product is to fill a specific patient’s prescription

If both of the above are false, the pharmacy selling the product would be considered a wholesaler according to the DSCSA, meaning the selling pharmacy needs to be licensed as a wholesaler. These activities are currently occurring in many states since state law does not necessarily prohibit this activity. However, we can see it being eliminated when the individual states are instructed to start enforcing this aspect of the DSCSA as they are currently enforcing other sections of the DSCSA.

What does an Authorized Trading Partner do?

The simple answer is that they provide you with the products you have ordered. But the DSCSA requires a few more things from them. First, they need to verify their ATPs who ship them medication and to whom they ship medication. Next, they must review the products and the transaction data (transaction information, transaction history, and transaction statement) they receive from their ATPs that send the product to help ensure they are legitimate. Then they can ship the product you ordered with the necessary transaction data.


Do the due diligence. Verify your ATPs with their licensing board and obtain copies of their licenses and permits. It is easy and, more importantly, required by the DSCSA.

What is DSCSA 360TM?

DSCSA 360TM from PRS and Advasur 360®  from Advasur address every requirement pharmacies must comply with using a fully automated and interactive system. The program is so easy to use and efficient that the Advasur 360®  was used in two small pharmacy studies sponsored by the FDA and mandated by the DSCSA to ensure that small pharmacies could comply. The studies also demonstrated that it took ten minutes per week to document compliance using the program, and thus, the program easily pays for itself in staff time saved. Among many other features, the Advasur 360® Program also tracks and stores copies of the licenses and permits of virtually every ATP, including yours, reaching out to them for updates when necessary and alerting you if any ATPs you use have not responded with an updated copy.

About PRS Pharmacy Services

Founded in 1982, PRS is nationally recognized as the trusted, go-to pharmacy consulting, brokerage, and compliance/credentialing company for pharmacy executives, owners, and other professionals. Its comprehensive ComplianceTrack Platform provides various Compliance Services, including DSCSA Compliance Services in partnership with Advasur, to thousands of pharmacies in all 50 states and U.S. territories. PRS and Advasur have developed the only comprehensive Pharmacy Drug Supply Chain Security Act (DSCSA) Turn-Key Outsourced Compliance system for pharmacy clients. This leading-edge technology platform is the industry’s most complete state-of-the-art patent-protected DSCSA service and solution for independent pharmacies. Over 5000 pharmacy clients currently use these DSCSA Compliance Services and have a 100% success rate in passing Federal and State Inspections. For more information, visit the DSCSA Compliance Information page.