Diabetic Test Strip Authorized Distributors – LifeScan Audits Continue!

The warning letter is softer in tone and educates recipients about the existence of an authorized distributor network and requests that the pharmacy reviews their suppliers to confirm that they are purchasing from a secure supply chain. Letters point out that purchases made outside of the secure supply chain could mean dispensing products that are counterfeit, have been tampered with (gray market), or are not authorized for sale in the United States.

The law firm letters boldly accuse pharmacies of having an “invoice shortage” and provides spreadsheets with claims and rebate data to support their allegations. These letters threaten to harm pharmacies by withholding rebate dollars owed to PBMs and notify PBMs of the pharmacy’s “non-compliance” unless the pharmacy pays a large amount of money to make the issue “go away”.

While PAAS National^® has only seen letters from LifeScan, the concept of an authorized distributor network applies to many manufacturers of OTC diabetic test strips (see list below).

Manufacturer authorized distributor lists for major diabetic test strips:

1. Abbott https://www.diabetescare.abbott/support/distributors.html
2. Ascensia https://www.ascensiadiabetes.com/ (click on “distributors” at the bottom of the page)
3. LifeScan www.genuineonetouch.com
4. Roche https://rxvp.accu-chek.com/welcome/adr_list
5. Trividia Health^TM https://www.trividiahealth.com/where-to-buy/

Because diabetic test strips are classified by the FDA as OTC medical devices, they fall outside of the Drug Supply Chain Security Act (DSCSA) and there is no requirement for a “pedigree” to ensure sourced product is legitimate and not stolen, counterfeit or previously dispensed (gray market). Pharmacies should take extra care when sourcing product that is advertised at a lower cost compared to primary wholesalers. Manufacturers have developed and maintained “lists” to aid supply chain partners like pharmacies.

It is also important to understand what each of the major PBMs have to say about sourcing diabetic test strips.

• Caremark requires network pharmacies to purchase diabetic test strips from authorized distributors only
• Express Scripts requires network pharmacies to purchase diabetic test strips from authorized distributors only
• OptumRx does NOT explicitly require pharmacies to purchase test strips from authorized distributors; however, they do require that pharmacies source all products (including OTC test strips) from vendors that are both (i) licensed as a drug wholesaler in your state and (ii) an NABP accredited drug distributor.

Finally, there are two states (California and New Jersey) that have regulations pertaining to the purchase and distribution of OTC diabetic test strips.

PAAS Tips:

• Be mindful of the interplay between state pharmacy regulations, PBM contract requirements, and manufacturer distribution channels when making inventory purchase decisions – the lowest possible price may cause you to run afoul of requirements
• Contact PAAS at (608) 873-1342 or info@paasnational.com if you receive a letter from LifeScan or an affiliate law firm regarding purchases of diabetic test strips so that we can assist you in navigating a response