DSCSA Pilot Project SSA 2018

FOOD AND DRUG ADMINISTRATION
Pilot Project Program
Under the Drug Supply Chain Security Act
OMB Control No. 0910- NEW
SUPPORTING STATEMENT Part A: Justification
1. Circumstances Making the Collection of Information Necessary
On November 27, 2013, the Drug Supply Chain Security Act (DSCSA) (Title II of Pub. L. 11354) was signed into law. The DSCSA outlines critical steps to build an electronic, interoperable
system by November 27, 2023 that will identify and trace certain prescription drugs as they are
distributed within the United States. Section 202 of the DSCSA added the new sections 581 and
582 to the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 360eee and 360eee-1).
Under section 582(j) of the FD&C Act, FDA is required to establish one or more pilot projects,
in coordination with authorized manufacturers, repackagers, wholesale distributors, and
dispensers, to explore and evaluate methods to enhance the safety and security of the
pharmaceutical distribution supply chain.
2. Purpose and Use of the Information Collection
The DSCSA Pilot Project Program will assist the development of the interoperable electronic
system established by 2023. The program goals include assessing the ability of supply chain
members to: satisfy the requirements of section 582 of the FD&C Act; identify, manage, and
prevent the distribution of suspect and illegitimate products as defined in sections 581(21) and
581(8) of the FD&C Act, respectively; and demonstrate the electronic, interoperable exchange of
product tracing information across the pharmaceutical distribution supply chain, in addition to
identifying the system attributes needed to implement the requirements of section 582 of the
FD&C Act, particularly the requirement to utilize a product identifier for product tracing
purposes. FDA plans to coordinate with stakeholders that reflect the diversity of the
pharmaceutical distribution supply chain, including large and small entities from all industry
sectors.
FDA will be seeking pilot project participants from the pharmaceutical distribution supply chain
(authorized manufacturers, repackagers, wholesale distributors, and dispensers) and other
stakeholders. FDA expects that participants will propose the design and execution of their pilot
project in their submission to FDA; however, FDA intends to meet with all pilot project
participants to ensure the learnings from the pilot project(s) will be complementary in informing
the direction of the development of the electronic, interoperable system that will go into effect in
2023. FDA encourages supply chain members to focus their proposed pilot project (s) on the
DSCSA requirements related to the interoperable, electronic tracing of products at the package
level. Specifically, the pilot project(s) should focus on the requirements for package-level
tracing and verification that go into effect in 2023. If there are adequate pilot project
submissions, FDA may establish more than one pilot project to accomplish the goals of the
DSCSA Pilot Project Program.

3. Use of Improved Information Technology and Burden Reduction
Applicants and participants may electronically submit information to the FDA. Once the
DSCSA Pilot Project Program is established, volunteers interested in participating in the DSCSA
Pilot Project Program will be able to submit a request to participate by email to
DSCSAPilotProjects@fda.hhs.gov.
During the applications process, volunteers will provide the following information:
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Contact information (name of point of contact, mailing address, phone number, email
address)
Names of all partnering entities that would participate in such pilot project
Type(s) of trading partner(s) or supply chain stakeholder(s) participating in the pilot
project, such as “manufacturer” or “wholesale distributor”
Number of employees for each partnering entity of a pilot project
Expected duration of the pilot project and commitment to start date
Product(s) that will be used in the pilot project
Location(s) of where pilot project will be performed
Description of the proposed pilot project, including, but not limited to, the goals,
objectives, processes that will be studied, and evaluation methods

For a group of entities that partner to participate in a pilot project, only one point-of-contact for
the proposed pilot project should be provided in the request to participate.
Pilot project participants will also be expected to submit reports on the progress of their pilot
projects to FDA. FDA will work with participants to develop an appropriate schedule for the
submission of progress reports based on the design and duration of the pilot project. In addition,
within thirty business days of completing a pilot project, participants will provide a final report
to FDA that captures the description, objectives, methods, evaluation, and key findings and
lessons learned from the project. Progress reports and the final report may be submitted
electronically by email.
4. Efforts to Identify Duplication and Use of Similar Information
The FDA does not believe that duplication of submitted information is likely in the Pilot Project
Program based on the goals of the program. If there are multiple pilot projects conducted,
progress reports and final reports will be unique to the corresponding pilot project performed by
different groups of industry stakeholders.
5. Impact on Small Businesses or Other Small Entities
As required, FDA plans to coordinate with stakeholders that reflect the diversity of the
pharmaceutical distribution supply chain, including large and small entities from all industry
sectors. The partners in any pilot project that is selected into the program will be responsible for
the funding and resources necessary to conduct the pilot project.
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6. Consequences of Collecting the Information Less Frequently
FDA will work with participants to develop an appropriate schedule for the submission of
progress reports based on the design and duration of the pilot project. Progress reports should be
sufficient to capture details, procedures, or findings that may be key learnings for FDA and other
stakeholders. Less frequent progress reports may not sufficiently capture this information.
7. Special Circumstances Relating to the Guidelines in 5 CFR 1320.5
There are no special circumstances relating to this information collection. (The submission of
proprietary, trade secret, or other confidential information is addressed under section 10 below).
8. Comments in Response to the Federal Register Notice and Efforts to Consult Outside the
Agency
In the July 20, 2017 Federal Register notice (82 FR 33497), FDA requested public comment on
the proposed collection of information associated with the DSCSA Pilot Project Program. A
summary of the comments and FDA’s responses are as follows:
The comments raised concerns with the proposed timelines related to: initiation of pilot project,
duration of pilot projects, and final reports. One commenter expressed concern that 4 months
(after receiving a letter of acceptance from FDA) may not be enough time for a potential
participant to be ready to initiate their pilot project. Another comment suggested that the
proposed duration of pilot projects (no more than 6 months) should be longer and give the
participant(s) more flexibility to conduct the pilot project. In addition, another comment
described concern with the proposed requirement that final reports be completed within 30 days
because that may not be enough time to complete a final report.
FDA response: The proposed timelines were intended to enable completion of FDA’s pilot
project program within one year of the start date. FDA would like to complete the program in a
timely manner so that the information learned can be shared and utilized by supply chain
participants as they prepare and implement remaining DSCSA requirements that go into effect
between 2018 to 2023. To optimize the program, FDA expects pilot project participants to be
ready to initiate their pilot project within 4 months after receiving a letter of acceptance from
FDA. This will help ensure that participants have worked out funding, resources, planning, and
other issues in advance of initiation of the pilot project. FDA provided flexibility in the program
to allow the agency to consider pilot projects that may go beyond a 6-month period; however, a
pilot project duration of 6 months or less is preferred.
Another comment requested clarification of the proposed process for selecting participants. The
comment described concern that FDA’s pilot project program may include only those entities
that are most engaged in DSCSA implementation currently. The comment also described
concern that the findings and results may not accurately reflect the current environment because
the program may not include supply chain members with fewer resources, less sophisticated
compliance methods, or not as closely connected as other trading partners.
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FDA response: Participation in the pilot project program is open to anyone in the
pharmaceutical distribution supply chain (authorized manufacturers, repackagers, wholesale
distributors, and dispensers) and other stakeholders. FDA plans to coordinate with stakeholders
that reflect the diversity of the pharmaceutical distribution supply chain, including large and
small entities from all industry sectors. FDA expects that participants will propose the design
and execution of their pilot project in their submission to FDA, which may include coordination
with partnering entities in a manner that may resolve some of the concerns that the findings and
results may not accurately reflect the current environment of supply chain members that may
have fewer resources or less sophisticated compliance methods.
Another comment did not support FDA considering products for eligibility in proposed pilot
projects that may be outside the scope of “product” as defined in DSCSA, such as over-thecounter medications. The comment suggested that if FDA is expanding the scope of pilot
projects to include additional products, then the timeline for pilot projects would need to be
delayed beyond 2023 to allow sufficient time for supply chain participants to adjust to the needs
of these expanded pilots.
FDA response: The proposed consideration for product eligibility in pilot project program for
items that may be outside the scope of “product” as defined in DSCSA was included to provide
flexibility to potential participant that may choose to test a process or system involving product
outside the scope of “product” as defined by DSCSA. This is not a requirement; however, there
may be an opportunity to learn from such pilot projects. This consideration does not justify a
need to delay the timeline for the pilot projects beyond 2023. It will be up to the participants to
propose the design and execution of their pilot project in their submission to FDA. FDA will
consider multiple factors to ensure that the pilot project(s) selected for the program will support
the program goals.
Another comment believed that having pilot participants fund their pilot projects would conflict
with the need to include a diverse set of supply chain stakeholders because some supply chain
stakeholders do not have the resources to participate in a pilot project.
FDA response: There is no FDA funding for the pilot project program provided in the DSCSA
and participation is on a volunteer basis. FDA plans to coordinate with stakeholders that reflect
the diversity of the pharmaceutical distribution supply chain, including large and small entities
from all industry sectors.  FDA expects participants to be responsible for funding and resources
for the pilot project. Participants will develop and propose the design and execution of their pilot
project in their submission to FDA, which may include coordination with partnering entities in a
manner that may resolve resource concerns.
9. Explanation of Any Payment or Gift to Respondents
There is no payment or gift to respondents associated with this announcement.

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10. Assurance of Confidentiality Provided to Respondents
The submitted information will be handled according to agency regulations, the Freedom of
Information Act, and other applicable disclosure law. Confidentiality of the information
submitted under these requirements is protected under 21 CFR Part 20. The unauthorized use or
disclosure of trade secrets is specifically prohibited under section 310(j) of the FD&C Act. FDA
will not disclose any information that is considered to be a trade secret and prohibited under
section 310(j) of the FD&C Act if such information is included in the notification to FDA.
The information submitted to FDA are handled by FDA employees. The electronic files will be
maintained according to FDA document retention schedules and destroyed when no longer
needed for administrative, legal, or audit purposes.
11. Justification for Sensitive Questions
There are no sensitive questions associated with this announcement.
12. Estimates of Annualized Hour Burden and Costs
12a. Annualized Hour Burden Estimate
The information collection associated with the DSCSA Pilot Project Program consists
of the following:

Reporting Burden Estimates: FDA estimates that no more than 10 respondents will submit a
request to participate, and that it will take approximately 80 hours to complete a request and
submit the request to FDA. FDA estimates that it will select no more than eight respondents for
the pilot project program. The estimated total time for respondents to submit a request to
participate in the program is 800 hours. Once the request to participate is accepted, the submitter
is now a participant of the DSCSA Pilot Project Program. FDA estimates that the eight
respondents (i.e., participants) will submit an average of five progress reports to FDA. Because
the duration of a pilot project should not exceed 6 months, the frequency of the progress reports
will vary based on the length of the individual pilot project. Pilot projects of relatively shorter
duration may result in shorter time intervals between progress reports so that the reports will be
sufficient to capture progress while the pilot project is ongoing. FDA estimates that it will take
approximately 8 hours to compile and submit each progress report. The estimated total number
of hours for submitting progress reports would be 320 hours. After completion of their pilot
project, each participant will provide one final report to FDA. FDA estimates that it will take the
8 participants approximately 40 hours to submit a final report. The estimated total number of
hours for submitting the final report is 320 hours. The total hours for the estimated reporting
burden are 1440 hours (table 1).
Recordkeeping Burden Estimates: Recordkeeping activities include storing and maintaining
records related to submitting a request to participate in the program and compiling reports.
Respondents can use current record retention capabilities for electronic or paper storage to
achieve these activities. FDA estimates that no more than 10 respondents will have
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recordkeeping activities related to program participation. FDA believes that it will take 0.5
hour/year to ensure that the documents related to submitting a request to participate in the
program are retained properly for a minimum of 1 year after the pilot project is completed (as
recommended by FDA). The resulting total to maintain the records related to submitting a
request is 5 hours annually. For retaining records related to progress reports and the final report
properly for a minimum of 1 year after the pilot project is completed (as recommended by FDA),
FDA estimates that it will take approximately 0.5 hour/year. As noted previously, FDA
estimates that the eight respondents will submit an average of five progress reports and one final
report to FDA. The estimated total for maintaining progress reports and the final report is 20 and
4 hours, respectively. The total recordkeeping burden is estimated to be 29 hours (table 2).
In developing its burden estimate for records associated with the proposed pilot projects, FDA
has taken account of existing industry practices for keeping records in the normal course of their
business. In particular, FDA is aware of various supply chain stakeholders that have conducted
pilot projects over the past few years, including some pilot projects that occurred before the
DSCSA was enacted. These pilot projects covered topics related to serialization, movement of
product data, aggregation of data, and verification of product identifiers of returned products.
Members of the supply chain who conduct pilot projects of their own accord created associated
records as a matter of usual and customary business practice. Therefore, FDA considers these
activities associated with a pilot project to be usual and customary business practice, and the
burden estimates for like records are not included in the calculation of the recordkeeping burden
(see 5 CFR 1320.3(b)(2)).
Third-Party Disclosure Burden Estimates: For those pilot projects that involve a participant
composed of partnering entities in the program, FDA is taking into consideration the time that
partnering entities will spend coordinating with each other in a pilot project. For the initial
request to participate, FDA estimates that eight respondents will work with their respective
partnering entities, and the average number of partnering entities will be two. FDA estimates
that each respondent will spend 8 hours coordinating with each partnering entity. Thus, for eight
respondents with an average of two partnering entities, the estimated total burden for
coordinating with partnering entities related to the submission of the request to participate in the
program is 128 hours. FDA estimates that seven respondents will need to coordinate with an
average of two partnering entities to create progress reports and the final report to submit to
FDA. Earlier, FDA estimated that an average of five progress reports will be submitted to FDA
per respondent. If a respondent has an average of 2 partners, it will coordinate 10 times with
those partners on the progress reports. FDA estimates that for each progress report, it will take 4
hours to coordinate with each partner, resulting in a total of 280 hours. FDA estimates that for
each final report, it will take approximately 20 hours to coordinate with each partner, resulting in
a total of 280 hours. The total estimation for third-party disclosure burden is 688 hours (table 3).

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Table 1--Estimated Reporting Burden1
No. of
Respondents

DSCSA Pilot Project
Program
Requests to participate
Progress reports
Final report to FDA
Total
1

10

No. of
Responses per
Respondent
1

Total Annual Average
Responses
Burden per
Response
10
80

8
8

5
1

40
8

8
40

Total Hours
800
320
320
1440

There are no capital costs or operating and maintenance costs associated with this collection of information.

Table 2--Estimated Annual Recordkeeping Burden1
DSCSA Pilot Project
Program
Records related to
requests to participate
Records related to
progress reports
Records related to the
final report to FDA
Total
1

No. of
Recordkeepers

No. of Records per
Recordkeeper

Total
Annual
Records

10

1

10

8

5

40

8

1

8

Average
Burden per
Recordkee
ping
0.5 (30
minutes)
0.5
(30 mins)
0.5 (30
minutes)

Total Hours

5
20
4.0
29

There are no capital costs or operating and maintenance costs associated with this collection of information.

Table 3--Estimated Annual Third-Party Disclosure Burden1
DSCSA Pilot
Project Program
Coordination with
partnering entities
related to requests to
participate
Coordination with
partnering entities
related to progress
reports
Coordination with
partnering entities
related to final
reports
Total
1

No. of
Respondents
8

No. of
Disclosures per
Respondent
2

7

7

Total Annual
Disclosures
16

Average
Burden per
Disclosure
8

Total Hours
128

10

70

4

280

2

14

20

280

688

There are no capital costs or operating and maintenance costs associated with this collection of information.

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12b. Annualized Cost Burden Estimate
The industry burden estimate calculated above would result in labor costs. FDA Economics
Staff estimates that these types of notifications would likely be by a general operations manager
for manufacturers, repackagers, and wholesale distributors, and a pharmacist for a dispenser.
The adjusted mean hourly wage including benefits and overhead is $152.90 for manufacturers
and repackagers, as reported by the U.S. Department of Labor, Bureau of Labor Statistics, 2016
Employment Occupational Statistics for Management Occupations in Pharmaceutical and
Medicine Manufacturing (North American Industry Notification, NAICS, code 325400). The
mean hourly wage including benefits and overhead for wholesale distributors is $142.12
according to the U.S. Department of Labor, Bureau of Labor Statistics, 2016 Employment
Occupational Statistics for Management Occupations in Drug and Druggists Sundries Merchant
Wholesalers (North American Industry Notification, NAICS, 424200). The mean hourly wage
including benefits and overhead for a pharmacist is $115.44 as reported by the U.S. Department
of Labor, Bureau of Labor Statistics, 2016 Employment Occupational Statistics for Management
Occupations for Pharmacies and Drug Stores (North American Industry Notification, NAICS,
code 446110). Using these wage rates, the total labor costs for the activities listed above for
each group are in table 4 below. The total labor cost for this information collection equals
approximately $306,408.39.
Table 4--Annualized Cost Burden Estimate
Trading Partner

Activity

Manufacturer/Repackager
Manufacturer/Repackager
Manufacturer/Repackager

Reporting
Recordkeeping
Third-Party
Disclosure

Total
Manufacturer/Repackager
Wholesale Distributor
Wholesale Distributor
Wholesale Distributor
Total Wholesale
Distributor
Pharmacist
Pharmacist
Pharmacist

Estimated
Hours
506.7
10.5
229.3

Hourly Rate Cost
$152.90
$152.90
$152.90

$77,474.43
$1,605.45
$35,059.97
$114,139.85

Reporting
Recordkeeping
Third-Party
Disclosure

506.7
10.5
229.3

$142.12
$142.12
$142.12

$72,012.20
$1,492.26
$32,588.12
$106,092.58

Reporting
Recordkeeping
Third-Party
Disclosure

Total Pharmacist
Total Stakeholder costs

506.7
10.5
229.3

$115.44
$115.44
$115.44

$58,493.45
$1,212.12
$26,470.39
$86,175.96
$306,408.39

There are no capital costs or operating and maintenance costs associated with this collection of information.

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13. Estimates of Other Total Annual Cost Burden to Respondents and/or Recordkeepers/Capital
Costs
There are no capital, start-up, operating, or maintenance costs associated with this information
collection. Under the DSCSA Pilot Project Program, manufacturers/repackagers, wholesale
distributors, and pharmacies may utilize existing equipment and systems for pilot projects and
may use similar types of systems or processes for communications (which may include but is not
limited to sending an email, telephoning, mailing or faxing a letter).
14. Annualized Cost to the Federal Government
FDA expects that participants will propose the design and execution of their pilot project in their
submission to FDA; however, FDA intends to meet with all pilot project participants to ensure
the learnings from the pilot project(s) will be complementary in informing the direction of the
development of the electronic, interoperable system that will go into effect in 2023. FDA will
work with participants to develop an appropriate schedule for the submission of progress reports
based on the design and duration of the pilot project. Participants will also provide a final report
to FDA that captures the description, objectives, methods, evaluation, and key findings and
lessons learned from the project. FDA will review all progress and final reports submitted by
participants and publish the DSCSA Pilot Project Program final report.
The annualized government cost estimates are $360,250 as indicated in Table 5.
Table 5--Government Costs
Est. No.
Hours

Hourly
Rate

Total Cost

FDA Program Management

600

$82.00

$49,200

FDA review of project proposals

100

$82.00

$8,200

FDA review of reports

200

$82.00

$16,400

FDA publish final report

200

$82.00

$16,400

Type of Activity

Contract Cost for Project
Management

$270,050

Total Costs

$360,250

There are no capital costs or operating and maintenance costs associated with this collection of information.

Note: The hourly rate is determined by dividing the Agency's
fully-loaded cost of $171,154 per FTE (for FY 2018) by the
number of hours per FTE per year (2,080) to arrive at $82 per hour.

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15. Explanation for Program Changes or Adjustments
This is a new data collection. Comments received on the proposed program were addressed and
no changes were made to the proposed program and FDA’s original burden estimates.
16. Plans for Tabulation and Publication and Project Time Schedule
There are no plans for tabulation and publication and project time scheduling.
17. Reason(s) Display of OMB Expiration Date is Inappropriate
The OMB expiration date will be displayed where required.
18. Exceptions to Certification for Paperwork Reduction Act Submissions
There are no exceptions to the certification in 5 CFR 1320.9. 

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