How a Small Pharmaceutical Distributor Shook America's Drug Chain
Once a little‑known wholesaler, Sterling Distributors compliance failures triggered counterfeit drugs, subpoenas and a high‑stakes FDA response.
The Law, the Lapses and the Stakes
In the decade since congress passed the Drug Supply Chain Security Act (DSCSA), the U.S. has been building an elaborate system to keep counterfeit and adulterated medicines out of pharmacies. The law requires drug makers, wholesalers and pharmacies to verify one another's licenses, document every transaction, and quarantine and investigate product that looks suspicious.
The goal, as the FDA puts it, is to "preserve the security of the supply chain for certain prescription drugs" so patients aren't exposed to drugs that may be counterfeit or harmful.
Against that backdrop, enforcement has been relatively rare. By June 2025 the FDA had issued only three warning letters citing DSCSA violations (raps.org). The most recent went to a little known Florida wholesaler named Sterling Distributors.
Mispackaged drug product, later determined to be counterfeit by the manufacturer, set off a chain reaction of subpoenas, inspections and revelations. The FDA's warning letter, published late last month, chronicles how Sterling failed at nearly every stage.
The company has offered no public explanation and its only response to regulators has been deemed inadequate.
What follows is a step-by-step account of how the Sterling affair unfolded.
What the DSCSA requires
The Drug Supply Chain Security Act (DSCSA) was enacted in 2013 to protect patients.
The act does so by ensuring the U.S. drug supply chain is free of counterfeit or contaminated products. It requires wholesalers, manufacturers, repackagers and dispensers to:
A 'stabilization period' for the enhanced drug distribution security (EDDS) phase ended on November 27 2024, but implementation deadlines vary by trading partner. FDA and subsequent industry guidance outline that manufacturers and repackagers must meet EDDS requirements by May 27 2025.
Wholesale distributors, like Sterling, must meet EDDS requirements by August 27 2025. Twenty-seven days from the publishing of this article.
Dispensers with 26 or more employees must meet the requirements by November 27 2025 and small dispensers have an extra year, with compliance required by November 27 2026.
Timeline of the Sterling Distributors case
At Sterling Distributors, our commitment to excellence is unwavering.
Aug 29 2024 - Feb 5 2025 : Sterling Distributors, operating from Coral Springs, Florida, received prescription drugs from an unlicensed trading partner and shipped them to pharmacies in Arkansas and Mississippi despite not holding wholesale distribution licenses in those states (FDA).
Nov 19 2024 : The Arkansas Board of Pharmacy subpoenaed Sterling's purchase records as part of an investigation into suspect product. Sterling ignored the subpoena and a follow-up subpoena in January 2025 (FDA).
Dec 4 2024 : A trading partner pharmacy notified Sterling that it had received a mispackaged product labelled as a name-brand diabetes medication. The product had been returned by the patient. Under DSCSA rules Sterling should have treated the product as a suspect product, quarantined it, cooperated with trading partners and notified FDA. Instead, Sterling returned the product to its supplier (FDA).
Dec 17 2024 - Jan 3 2025 : The manufacturer of the mispackaged product (name redacted) repeatedly contacted Sterling about the counterfeit. Sterling provided no evidence that it investigated or cooperated with the manufacturer (FDA). Arkansas and Mississippi boards of pharmacy attempted to obtain invoices; Sterling did not respond.
Mar 4-6 2025 : FDA inspectors visitors Sterling's facility and issued a Form 483. When asked for the transaction histories Sterling told investigators that it "does not maintain such records" (FDA).
Mar 25 2025 : Sterling responded to the Form 483 but did not provide a clear plan to correct DSCSA violations. The FDA deemed the response as "inadequate" (FDA). Sterling stated in its response to the federal agency that they were "not alerted to the fact the products at issue were potentially counterfeit, and therefore suspect and illegitimate".
Jun 5 2025 : FDA sent Warning Letter 706508 to Sterling Distributors (publicly posted June 24 2025). The letter summarizes DSCSA violations and warns that failure to correct them may result in injunction or seizure (FDA).
Who is responsible?
Although the FDA letter to Sterling Distributors itself is an administrative enforcement action, the company's owners and managers could face criminal prosecution and personal fines if violations are deemed intentional or if patients are harmed.
Because the FDA letter redacts the name of the falsified medicines and details of the trading partner, it is unclear whether any patients were harmed. However, the Partnership for Safe Medicines notes that counterfeit Ozempic pens were found at an Arkansas pharmacy in late 2024 and that track-and-trace systems helped the Arkansas Board of Pharmacy identify the illegitimate product quickly.
The FDA letter is addressed to the president of Sterling Distributors, Mr. Dean Berry. Business directories corroborate that Mr. Berry is the key principal / owner of Sterling Distributors. The Better Business Bureau (BBB.org), and Dun and Bradstreet's profile name Mr. Berry as the key principal (DNB.com).
At the time of publishing this article, Mr. Berry is listed as a 'sales specialist' of Sterling Distributors on LinkedIn.
Potential penalties
The Drug Supply Chain Security Act incorporated DSCSA violations into the list of "prohibited acts" under the Federal Food, Drug, and Cosmetic Act, so the penalties under 21 U.S.C. § 333 apply (drug-dev.com).
Section 333 states that anyone who violates the Act is subject to imprisonment for not more than one year or a fine of not more than $1,000, or both (law.cornell.edu). It also provides that a person who commits a subsequent violation, or commits a violation with intent to defraud or mislead, can be imprisoned for up to three years or fined up to $10,000, or both (law.cornell.edu).
Delays for better or worse
Implementation of the law's serialization and electronic-tracing requirements have been repeatedly delayed. In 2017 the agency postponed enforcement of product-identifier requirements after trading partners warned they could not meet the deadline.
More recently, in October 2023 the FDA issued final guidance stating it would not take enforcement action on certain enhanced security requirements until November 27 2024, giving manufacturers, distributors, and dispensers additional time "to develop and refine appropriate systems and processes" for interoperable electronic tracing (nabp.pharmacy).
Trade publications described the decision as providing "breathing room for the pharmaceutical industry" while acknowledging that persistent challenges remain. The phased EDDS deadlines that follow the May 27 2025 date for manufacturers and repackagers, August 27 2025 for wholesale distributors, and November 27 2025 for larger dispensers (FDA) reflect the FDA's attempt to balance readiness concerns with the urgency of securing the drug supply chain.
The Sterling case, however, illustrates the risks of using delays as an excuse for non-compliance. Sterling's violation were not the result of a sophisticated IT integration challenge.
They stemmed from fundamental failures:
These lapses occurred during a period when the FDA had already exercised enforcement discretion. Delays were meant to avoid disruptions, not to give firms permission to look away from DSCSA requirements.
With wholesalers' EDDS deadline approaching in August 2025, the Sterling case may stiffen regulators' resolve. Patient safety advocates can point to the counterfeit incident as evidence that the U.S. supply chains remains vulnerable when distributors fail to implement the DSCSA rules.
Conclusion
The Sterling Distributors case is one of only three DSCSA warning letters issued by FDA to date. It highlights the seriousness with which the agency views licensure, record-keeping and suspect product investigations.
Sterlings' failures in operating without state licenses, buying from an unlicensed supplier, ignoring subpoenas, continuing to sell products from a suspect lot, and not maintaining transaction data represent a clear departure from DSCSA requirements.
The case is a cautionary tale for non-compliant entities and their owners and executives; individuals like Mr. Berry.
At the time of publishing this article no prescription products regulated by DSCSA were listed on the distributors website catalogue located at https://sterlingdistributors.net/.
The companies about us page states: "At Sterling Distributors, our commitment to excellence is unwavering. We maintain a direct line to the best in the business, ensuring that we deliver the highest quality equipment at competitive prices."
Mentions about the quality of pharmaceutical products and references to DSCSA are absent.
Do incidents like Sterling’s signal that the DSCSA is finally growing teeth or do they expose how far the industry still has to go to safeguard patients?
DSCSA Compliance Lead at CenterWell Pharmacy
1moExcellent article Daniel! Thank you!
Clay-Certified Coach | Founder @ automaterevops.ai | We Help Revenue Teams Build & Scale Their Growth Engine with Automated RevOps Systems
1moCurious to see your take on this one. The Sterling stuff has everyone talking.