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.

PAAS Tips:

Become an audit assistance member today to continue reading this article. As a member, you’ll have access to hundreds of articles and receive our monthly proactive newsletter!

Join today!

Both Express Scripts and Caremark have required pharmacies to purchase test strips from “authorized distributors” of the manufacturer since 2016
- See California’s public listing for a comprehensive list
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

Author
Recent Posts

Eric Hartkopf, PharmD

Analyst at PAAS National^®

As an Analyst, I focus on providing pre- and post-audit assistance, answering various member service questions, and researching & drafting articles for the Third-Party Newsline. I work with many of our members involved with invoice audits.

I obtained my PharmD from the University of Wisconsin-Madison School of Pharmacy and worked for a major chain as well as various LTC and independent pharmacies, before coming to PAAS.

I am passionate about learning and teaching. I strive to learn something new about PBM audits every day, so that PAAS can be more knowledgeable to better serve our members! In 2018, I started traveling to state pharmacy conferences to present audit seminars and meet our wonderful members in person.

Latest posts by Eric Hartkopf, PharmD (see all)

U.S. Government Alleges Counterfeit HIV Drugs Hiding in Pharmacy-to-Pharmacy Purchases - November 6, 2024
Walgreens $107 Million Settlement for False Claims Act Violations - November 4, 2024
Audit Risks: Medication Home Delivery - October 19, 2024