The Prescription Drug Marketing Act sets timelines for loss reporting and investigation, but does not define “significant” or provide factors for consideration in determining significant losses.
Life sciences manufacturers and distributors are tasked with delineating consequential losses based on their business models.
According to the FDA's 2013 Guidance, "each manufacturer or authorized distributor is expected to establish its own threshold for determining when inventory that cannot be accounted for is significant. This threshold should be derived from each firm’s past experience in prescription drug sample distribution and inventory, and should be based on the level of accuracy of the firm’s internal audit and security procedures."
Many organizations have assigned arbitrary percentages or dollar amounts as loss thresholds. Some companies set thresholds of 10% of the quantity distributed, or 5% of the product cost.
Unfortunately, quantitative calculations do not account for the nature of products. To avoid over or under reporting, companies must consider qualitative factors, such as the potential for product abuse or diversion.
PorzioLS created Significant Loss Threshold Assurance, a customized, formula-based approach to sample accountability with 16 key variables for successful significant loss threshold determination.
Our proprietary formula determines thresholds that account for a company’s distribution model, historical sample loss records, and full product portfolio. The formula incorporates critical factors, including:
As your company’s distribution model or product portfolio evolves, we can promptly reassess your sample data to ensure continued compliance.
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