Dive Brief:
- Georgia's Board of Pharmacy granted UPS a manufacturing pharmacy license last week, allowing the third-party logistics provider (3PL) to repackage and relabel drugs at its Duluth, GA, facility, according to CNBC.
- The move could help the 3PL deepen and protect its relationship with established drug manufacturers including Merck, which has a facility in Georgia, as companies like Amazon threaten to break into the space.
- The State of Georgia prohibits any person from selling or delivering drugs without a specific license. Previously, UPS' Duluth facility held a "wholesaler pharmacy" license, but the 3PL replaced it in favor of manufacturing pharmacy and third-party distribution licenses, according to public records.
Dive Insight:
As pharmaceutical distribution becomes increasingly complicated, 3PLs such as UPS are looking to take advantage of the opportunity to increase their business.
It was Congress that first opened the door to new business when it passed the Drug Supply Chain Security Act in 2013. The Act calls for all pharmaceutical stakeholders to work together in creating a transparent value chain, from manufacture to packaging and distribution. Although the law is being implemented over 10 years, certain requirements — such as traceability — are beginning to kick in, and not all manufacturers are ready to comply.
Such new and increasing regulations allow third-party companies like UPS and Amazon to sell their supply-chain-management services as an opportunity to outsource compliance costs. If a drug or medical device manufacturer can send all their non-compliant products to a third-party facility that will relabel their products with traceable solutions, all the while handling them properly, it eases the implementation timeline.
Public records indicate the Duluth facility remains UPS' only warehouse with a manufacturing pharmacy license, but other states with high drug manufacturing presences can likely expect the company to dig deeper into the space.
