Highlighting concerns with the pharmaceutical supply chain, the Food and Drug Administration warned McKesson, one of the nation’s largest wholesalers, for failing to properly handle episodes where pharmacies received tampered medicines, including three instances in which bottles contained naproxen instead of oxycodone, the highly addictive painkiller.
Specifically, the agency found that McKesson responded inadequately and demonstrated a lack of understanding of key regulations, according to a Feb. 7 warning letter. Notably, the letter is the first such missive issued under the Drug Supply Chain Security Act and also figured prominently in fresh remarks Tuesday by FDA Commissioner Scott Gottlieb about the ongoing opioid crisis.
So what happened?
During an FDA inspection of McKesson headquarters in San Francisco last year, the agency found that in 2016, the Rite Aid pharmacy chain reported to the wholesaler that three of its Michigan stores received bottles of oxycodone hydrochloride with broken seals that contained naproxen instead. One store reported that five bottles also contained an antibiotic.
McKesson investigated and figured the problem occurred under its own control, believing there was no evidence of tampering and all three pharmacies were located within a given region. But the FDA scolded McKesson for failing to properly identify and quarantine any suspected illegitimate medicines or notify other pharmacy customers and the agency itself, which is required under federal law.
“This is simply unacceptable,” Gottlieb said in the Tuesday statement. “A distributor’s failure to have systems in place to investigate and quarantine suspect and illegitimate products within their control is a violation of the law. But this is even more concerning given that we’re in the midst of a widespread opioid crisis.”
The warning letter cited two other instances in which McKesson purportedly failed to demonstrate that systems are in place to comply with the Drug Supply Chain Security Act. In late 2016, the Albertsons chain reported receiving two different medicines without lot numbers or expiration dates. And GlaxoSmithKline reported that a pharmacy received two sealed bottles of the wrong medication.
Although McKesson subsequently responded to the agency last fall with plans to correct the problems, the FDA chastised the company in the warning letter because its “statements demonstrate a lack of understanding of the definitions of suspect and illegitimate products, and of your firm’s responsibilities when notified of an illegitimate product by a trading partner.”
A McKesson spokeswoman wrote to say the company “takes this situation very seriously. We have been in communication with the FDA over the past several months to respond to their questions and we are in the process of providing additional procedural detail and documentation, including enhancements recently made in response to the FDA’s initial feedback. We are committed to the security of the supply chain and are taking steps to help ensure we comply fully with FDA’s track-and-trace laws for all pharmaceutical products.”
The Drug Supply Chain Security Act went into effect in 2015 and sought to address two key issues: upgrading the safety of compounded medicines following a severe outbreak of fungal meningitis that claimed 64 lives, and a desire to better track the distribution of prescription drugs through the supply chain in order to thwart counterfeit, stolen or contaminated products.
By citing the law and the warning letter in his remarks, however, Gottlieb appeared to up the ante for pharmaceutical wholesalers, especially since he tied the McKesson infractions to the opioid crisis. Wholesalers have been named in numerous lawsuits for allegedly failing to conduct proper oversight of opioid distribution and, two years ago, McKesson paid a $150 million for failing to report suspicious orders.
Last month, the Five Rivers Rx consulting firm noted the FDA inspection report was a “warning shot” for wholesalers. Citing the Drug Supply Chain Security Act as part of the inspection was described as a “significant” move, “because it sets precedent and expectations for distributors by the FDA.”
For now, there is “no immediate impact” on McKesson, according to Baird analyst Eric Coldwell. In fact, investors shrugged off the episode as the stock rose 2 percent in midday trading. Nonetheless, he noted the FDA indicated the failure to “promptly correct” the violations “may result in legal action” and “unresolved violations” cited in the letter may prevent other federal agencies from awarding contracts.
Stepping back, however, he cautioned that “we can add FDA’s aggressive stance on supply chain integrity to the long list of distributor risks.”