Pharmacy “Loan & Borrow” Practices Are Now DSCSA-Regulated Wholesale Transactions

For decades, pharmacies have relied on a simple industry tradition: Loan & Borrow.
One pharmacy runs out of medication needed for a patient, so a nearby pharmacy loans them a bottle or a quantity of the drug. When the receiving pharmacy restocks, they pay it back. No paperwork. No tracking. Just professional courtesy.

But under today’s Drug Supply Chain Security Act (DSCSA), this long-standing practice is no longer a simple verbal agreement. In fact, Loan & Borrow often triggers regulatory obligations that many pharmacies don’t realize — and may put them at significant risk of noncompliance.

Here’s what pharmacies need to know.

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What Is Loan & Borrow?

Loan & Borrow is the informal transfer of medication between pharmacies, typically to address unexpected stock-outs. Pharmacy A “loans” a medication to Pharmacy B, and Pharmacy B “returns” the same drug or quantity later.

This practice was harmless in a pre-DSCSA world.

Today, however, any movement of serialized product that changes ownership matters, and so does the electronic data that must accompany it.

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Loan & Borrow = A Wholesale Transaction Under DSCSA

Many pharmacies are surprised to learn that Loan & Borrow is not exempt from DSCSA requirements. Even if the intention is to return the product later, DSCSA views each movement as a standalone transaction.

Here’s why:

  1. Loaning the drug is one transaction.

         Ownership transfers from Pharmacy A to Pharmacy B.

  2. Returning the borrowed drug is a second transaction.

         Ownership transfers back from Pharmacy B to Pharmacy A.

Under DSCSA, both transfers require:

• Serialized EPCIS data

• Transaction Information (TI)

• Transaction Statement (TS)

• Documentation stored for at least 6 years

That means Loan & Borrow isn’t an informal favor: it is regulated wholesale distribution.

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Why Loan & Borrow Has Become a Compliance Risk

Loan & Borrow creates several challenges under DSCSA:

• No EPCIS outbound capability: Most pharmacies do not have systems to generate EPCIS transaction data,  a requirement for any outbound DSCSA transaction after Nov. 27, 2023.  

• Partial or open bottles cannot be transferred: DSCSA requires serialized tracing at the unit level, making mixed or open stock ineligible for compliant transfer.  

• Pharmacies may unintentionally operate as unlicensed wholesalers: Pharmacies have operated under a 5% rule for many years. This rule came from DEA standards and stated that if more than 5% of prescription drug volume is transferred annually, a pharmacy may be classified as a wholesale distributor, triggering distributor licensing requirements. Under DSCSA there is no such carve out for limited distribution. 

• Audit and enforcement exposure: State boards of pharmacy and FDA auditors may request documentation that most Loan & Borrow transactions cannot produce.

Put simply: Loan & Borrow without DSCSA-compliant data exchange is no longer a safe practice.

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What About “Specific Patient Need”? Is That Exempt?

Yes, but this exemption is very narrow.

A pharmacy may transfer product to another pharmacy, but only for the purpose of filling an existing prescription for a specific, identified patient, and only the exact amount needed to fill that prescription.

This exemption does not apply to traditional Loan & Borrow exchanges and does not allow transferring stock for replenishment or future use.

For almost all real-world Loan & Borrow situations, DSCSA rules apply.

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The New Reality: Pharmacies Need Outbound EPCIS Capability

Under enhanced DSCSA requirements, every outbound transaction requires EPCIS data. If a pharmacy engages in:

• Loan & Borrow

• Stock transfers

• Clinic or sister-pharmacy replenishments

• Emergency medication exchanges

…that pharmacy must be able to generate outbound EPCIS files with fully serialized transaction data.

Without outbound EPCIS capability, Loan & Borrow is not compliant, even if it's only occasional or “just helping another pharmacy out.”

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How LSPedia Helps Pharmacies Stay Compliant

LSPedia provides pharmacies with:

• Outbound EPCIS generation for any outbound transfer

• Serialized data management that matches FDA and partner requirements

• Transaction documentation tools that store TI/TS data automatically

• Compliance workflows that prevent noncompliant transfers

• Integration with wholesalers, manufacturers, and care networks

Whether you perform transfers once a year or every week, LSPedia ensures every transaction is DSCSA-compliant, auditable, and secure.

Loan & Borrow isn’t going away but it must evolve to meet today’s regulatory environment.

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Ensure Your Pharmacy Is DSCSA-Compliant

If your pharmacy engages in any Loan & Borrow or inter-pharmacy transfers, now is the time to ensure you have the systems and processes needed to comply with DSCSA.

Talk to LSPedia’s team today to confirm your pharmacy is compliant and equipped with outbound EPCIS capabilities.

👉 Contact LSPedia Sales: sales@lspedia.com
👉 Request a demo: www.lspedia.com/demo

Your compliance and your patients’ safety depend on it!

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