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S1146.................................................by HEALTH AND WELFARE
WHOLESALE DRUG DISTRIBUTION - Adds to existing law relating to wholesale
drug distribution to provide a short title; to require licensure of
wholesale drug distributors; to provide for licensing requirements; to
provide for limitation on disclosure of information; to provide
restrictions on transactions; to require each person who is engaged in
wholesale distribution of prescription drugs to provide a pedigree; to
provide exceptions; to require the Board of Pharmacy to timely adopt rules
and a form; to require verification with an exception; to provide for the
contents of a pedigree; to provide for recordkeeping; to provide certain
enforcement powers to the board; to provide for enforcement procedures; to
state certain prohibited acts with exceptions; and to provide for
penalties.
02/12 Senate intro - 1st rdg - to printing
02/13 Rpt prt - to Health/Wel
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE SENATE
SENATE BILL NO. 1146
BY HEALTH AND WELFARE COMMITTEE
1 AN ACT
2 RELATING TO WHOLESALE DRUG DISTRIBUTION; AMENDING CHAPTER 17, TITLE 54, IDAHO
3 CODE, BY THE ADDITION OF NEW SECTIONS 54-1751, 54-1752, 54-1753, 54-1754,
4 54-1755, 54-1756, 54-1757 AND 54-1758, IDAHO CODE, TO PROVIDE A SHORT
5 TITLE, TO DEFINE TERMS, TO REQUIRE LICENSURE OF WHOLESALE DRUG DISTRIBU-
6 TORS, TO PROVIDE AN EXCEPTION, TO PROVIDE FOR LICENSING REQUIREMENTS, TO
7 PROVIDE FOR LIMITATION ON DISCLOSURE OF INFORMATION, TO PROVIDE RESTRIC-
8 TIONS ON TRANSACTIONS, TO REQUIRE EACH PERSON WHO IS ENGAGED IN WHOLESALE
9 DISTRIBUTION OF PRESCRIPTION DRUGS TO PROVIDE A PEDIGREE, TO PROVIDE
10 EXCEPTIONS, TO REQUIRE THE BOARD OF PHARMACY TO TIMELY ADOPT RULES AND A
11 FORM, TO REQUIRE VERIFICATION WITH EXCEPTION, TO PROVIDE FOR THE CONTENTS
12 OF A PEDIGREE, TO PROVIDE FOR RECORDKEEPING, TO PROVIDE CERTAIN ENFORCE-
13 MENT POWERS TO THE BOARD, TO PROVIDE FOR ENFORCEMENT PROCEDURE, TO STATE
14 CERTAIN PROHIBITED ACTS WITH EXCEPTIONS AND TO PROVIDE FOR PENALTIES.
15 Be It Enacted by the Legislature of the State of Idaho:
16 SECTION 1. That Chapter 17, Title 54, Idaho Code, be, and the same is
17 hereby amended by the addition thereto of NEW SECTIONS, to be known and desig-
18 nated as Sections 54-1751, 54-1752, 54-1753, 54-1754, 54-1755, 54-1756,
19 54-1757 and 54-1758, Idaho Code, and to read as follows:
20 54-1751. SHORT TITLE. Sections 54-1751 through 54-1758, Idaho Code, shall
21 be known and may be cited as the "Idaho Wholesale Drug Distribution Act."
22 54-1752. DEFINITIONS. As used in sections 54-1751 through 54-1758, Idaho
23 Code:
24 (1) "Authentication" means to affirmatively verify before any wholesale
25 distribution of a prescription drug occurs that each transaction listed on the
26 pedigree has occurred.
27 (2) "Authorized distributor of record" means a wholesale distributor with
28 whom a manufacturer has established an ongoing relationship to distribute the
29 manufacturer's prescription drug. An ongoing relationship is deemed to exist
30 between such wholesale distributor and a manufacturer when the wholesale dis-
31 tributor, including any affiliated group of the wholesale distributor, as
32 defined in section 1504 of the Internal Revenue Code, complies with the fol-
33 lowing:
34 (a) The wholesale distributor has a written agreement currently in effect
35 with the manufacturer evidencing such ongoing relationship; or
36 (b) The wholesale distributor is listed on the manufacturer's current
37 list of authorized distributors of record, which is updated by the manu-
38 facturer on no less than a monthly basis.
39 (3) "Chain pharmacy warehouse" means a physical location for prescription
40 drugs that acts as a central warehouse and performs intracompany sales or
41 transfers of such drugs to a group of chain pharmacies that have the same com-
42 mon ownership and control.
2
1 (4) "Colicensed partner or product" means an instance where two (2) or
2 more parties have the right to engage in the manufacturing and/or marketing of
3 a prescription drug, consistent with the federal food and drug
4 administration's implementation of the prescription drug marketing act.
5 (5) "Drop shipment" means the sale of a prescription drug to a wholesale
6 distributor or chain pharmacy warehouse by the manufacturer of the prescrip-
7 tion drug, or that manufacturer's colicensed product partner, that
8 manufacturer's third party logistics provider or that manufacturer's exclusive
9 distributor, whereby the wholesale distributor or chain pharmacy warehouse
10 takes title but not physical possession of such prescription drug and the
11 wholesale distributor invoices the pharmacy or chain pharmacy warehouse, or
12 other person authorized by law to dispense or administer such drug to a
13 patient, and the pharmacy or chain pharmacy warehouse or other authorized per-
14 son receives delivery of the prescription drug directly from the manufacturer,
15 or that manufacturer's third party logistics provider, or that manufacturer's
16 exclusive distributor.
17 (6) "Facility" means a facility of a wholesale distributor where pre-
18 scription drugs are stored, handled, repackaged or offered for sale.
19 (7) "Manufacturer" means a person licensed or approved by the federal
20 food and drug administration to engage in the manufacture of drugs or devices,
21 consistent with the federal food and drug administration definition of
22 "manufacturer" under its regulations and guidance implementing the prescrip-
23 tion drug marketing act.
24 (8) "Manufacturer's exclusive distributor" means anyone who contracts
25 with a manufacturer to provide or coordinate warehousing, distribution or
26 other services on behalf of a manufacturer and who takes title to that
27 manufacturer's prescription drug, but who does not have general responsibility
28 to direct the sale or disposition of the manufacturer's prescription drug.
29 Such manufacturer's exclusive distributor must be licensed as a wholesale dis-
30 tributor under section 54-1753, Idaho Code, and to be considered part of the
31 normal distribution channel, must also be an authorized distributor of record.
32 (9) "Normal distribution channel" means a chain of custody for a pre-
33 scription drug that goes from a manufacturer of the prescription drug, from
34 that manufacturer to that manufacturer's colicensed partner, from that manu-
35 facturer to that manufacturer's third-party logistics provider or from that
36 manufacturer to that manufacturer's exclusive distributor, either directly or
37 by drop shipment, to:
38 (a) A pharmacy to a patient;
39 (b) Other designated persons authorized by law to dispense or administer
40 such drug to a patient;
41 (c) A wholesale distributor to a pharmacy to a patient or other desig-
42 nated persons authorized by law to dispense or administer such drug to a
43 patient;
44 (d) A wholesale distributor to a chain pharmacy warehouse to that chain
45 pharmacy warehouse's intracompany pharmacy to a patient or other desig-
46 nated persons authorized by law to dispense or administer such drug to a
47 patient; or
48 (e) A chain pharmacy warehouse to the chain pharmacy warehouse's
49 intracompany pharmacy to a patient or other designated persons authorized
50 by law to dispense or administer such drug to a patient.
51 (10) "Pedigree" means a document or electronic file containing information
52 that records each distribution of any given prescription drug.
53 (11) "Prescription drug" means any drug, including any biological product,
54 except for blood and blood components intended for transfusion or biological
55 products that are also medical devices, required by federal law or federal
3
1 regulation to be dispensed only by a prescription, including finished dosage
2 forms and bulk drug substances, subject to section 503(b) of the federal food,
3 drug and cosmetic act.
4 (12) "Repackage" means repackaging or otherwise changing the container,
5 wrapper or labeling to further the distribution of a prescription drug,
6 excluding that completed by the pharmacists responsible for dispensing product
7 to the patient.
8 (13) "Repackager" means a person who repackages.
9 (14) "Third party logistics provider" means anyone who contracts with a
10 prescription drug manufacturer to provide or coordinate warehousing, distribu-
11 tion or other services on behalf of a manufacturer, but does not take title to
12 the prescription drug or have general responsibility to direct the prescrip-
13 tion drug's sale or disposition. Such third party logistics provider must be
14 licensed as a wholesale distributor under section 54-1753, Idaho Code, and to
15 be considered part of the normal distribution channel must also be an autho-
16 rized distributor of record.
17 (15) "Wholesale distributor" means anyone engaged in the wholesale distri-
18 bution of prescription drugs including, but not limited to:
19 (a) Manufacturers;
20 (b) Repackagers;
21 (c) Own-label distributors;
22 (d) Private-label distributors;
23 (e) Jobbers;
24 (f) Brokers;
25 (g) Warehouses, including manufacturers' and distributors' warehouses;
26 (h) Manufacturer's exclusive distributors;
27 (i) Authorized distributors of record;
28 (j) Drug wholesalers or distributors;
29 (k) Independent wholesale drug traders;
30 (l) Specialty wholesale distributors;
31 (m) Third party logistics providers;
32 (n) Retail pharmacies that conduct wholesale distribution; and
33 (o) Chain pharmacy warehouses that conduct wholesale distribution.
34 To be considered part of the normal distribution channel, such wholesale dis-
35 tributor must also be an authorized distributor of record.
36 (16) "Wholesale distribution" means distribution of prescription drugs to
37 persons other than a consumer or patient, but does not include:
38 (a) Intracompany sales of prescription drugs, meaning any transaction or
39 transfer between any division, subsidiary, parent or affiliated or related
40 company under common ownership and control of a corporate entity, or any
41 transaction or transfer between colicensees of a colicensed product.
42 (b) The sale, purchase, distribution, trade or transfer of a prescription
43 drug or offer to sell, purchase, distribute, trade or transfer a prescrip-
44 tion drug for emergency medical reasons.
45 (c) The distribution of prescription drug samples by manufacturers' rep-
46 resentatives.
47 (d) Drug returns, when conducted by a hospital, health care entity or
48 charitable institution in accordance with 21 CFR 203.23.
49 (e) The sale of minimal quantities of prescription drugs by retail phar-
50 macies to licensed practitioners for office use.
51 (f) The sale, purchase or trade of a drug, an offer to sell, purchase or
52 trade a drug, or the dispensing of a drug pursuant to a prescription.
53 (g) The sale, transfer, merger or consolidation of all or part of the
54 business of a pharmacy or pharmacies from or with another pharmacy or
55 pharmacies, whether accomplished as a purchase and sale of stock or busi-
4
1 ness assets.
2 (h) The sale, purchase, distribution, trade or transfer of a prescription
3 drug from one (1) authorized distributor of record to one (1) additional
4 authorized distributor of record when the manufacturer has stated in writ-
5 ing to the receiving authorized distributor of record that the manufac-
6 turer is unable to supply such prescription drug and the supplying autho-
7 rized distributor of record states in writing that the prescription drug
8 being supplied had, until that time, been exclusively in the normal dis-
9 tribution channel.
10 (i) The delivery of, or offer to deliver, a prescription drug by a common
11 carrier solely in the common carrier's usual course of business of trans-
12 porting prescription drugs, and such common carrier does not store, ware-
13 house or take legal ownership of the prescription drug.
14 (j) The sale or transfer from a retail pharmacy or chain pharmacy ware-
15 house of expired, damaged, returned or recalled prescription drugs to the
16 original manufacturer, third party returns processor or reverse distribu-
17 tor.
18 54-1753. WHOLESALE DRUG DISTRIBUTOR LICENSING REQUIREMENT -- MINIMUM
19 REQUIREMENTS FOR LICENSURE. (1) Every wholesale distributor who engages in the
20 wholesale distribution of prescription drugs must be licensed by the board,
21 and every nonresident wholesale distributor must be licensed by the board if
22 it ships prescription drugs into this state, in accordance with this act
23 before engaging in wholesale distributions of wholesale prescription drugs.
24 The board shall exempt manufacturers distributing their own federal food and
25 drug administration approved drugs and devices from any licensing and other
26 requirements, to the extent not required by federal law or regulation, unless
27 particular requirements are deemed necessary and appropriate following rule-
28 making.
29 (2) The board shall require the following minimum information from each
30 wholesale distributor applying for a license under subsection (1) of this sec-
31 tion:
32 (a) The name, full business address and telephone number of the licensee;
33 (b) All trade or business names used by the licensee;
34 (c) Addresses, telephone numbers, and the names of contact persons for
35 all facilities used by the licensee for the storage, handling, and distri-
36 bution of prescription drugs;
37 (d) The type of ownership or operation, i.e., partnership, corporation,
38 or sole proprietorship;
39 (e) The name of each person who is an owner or an operator of the licen-
40 see;
41 (f) A list of all licenses and permits issued to the applicant by any
42 other state that authorizes the applicant to purchase or possess prescrip-
43 tion drugs;
44 (g) The name of the applicant's designated representative for the facil-
45 ity, together with the personal information statement and fingerprints,
46 required pursuant to paragraph (h) of this subsection (2) for such indi-
47 vidual;
48 (h) Each individual required by paragraph (g) of this subsection (2) to
49 provide a personal information statement and fingerprints shall provide
50 the following information to the board:
51 (i) The individual's places of residence for the past seven (7)
52 years;
53 (ii) The individual's date and place of birth;
54 (iii) The individual's occupations, positions of employment and
5
1 offices held during the past seven (7) years;
2 (iv) The principal business and address of any business, corpora-
3 tion or other organization in which each such office of the individ-
4 ual was held or in which each such occupation or position of employ-
5 ment was carried on;
6 (v) Whether the individual has been, during the past seven (7)
7 years, the subject of any proceeding for the revocation of any
8 license or any criminal violation and, if so, the nature of the pro-
9 ceeding and the disposition of the proceeding;
10 (vi) Whether, during the past seven (7) years, the individual has
11 been enjoined, either temporarily or permanently, by a court of com-
12 petent jurisdiction from violating any federal or state law regulat-
13 ing the possession, control or distribution of prescription drugs or
14 criminal violations, together with details concerning any such event;
15 (vii) A description of any involvement by the individual with any
16 business, including any investments, other than the ownership of
17 stock in a publicly traded company or mutual fund, during the past
18 seven (7) years, which manufactured, administered, prescribed, dis-
19 tributed or stored pharmaceutical products, and any lawsuits in which
20 such businesses were named as a party;
21 (viii) A description of any felony criminal offense of which the
22 individual, as an adult, was found guilty, regardless of whether
23 adjudication of guilt was withheld or whether the individual pled
24 guilty or nolo contendere. If the individual indicates that a crimi-
25 nal conviction is under appeal and submits a copy of the notice of
26 appeal of that criminal offense, the applicant must, within fifteen
27 (15) days after the disposition of the appeal, submit to the board a
28 copy of the final written order of disposition; and
29 (ix) A photograph of the individual taken in the previous year.
30 (3) The information required pursuant to subsection (2) of this section
31 shall be provided under oath.
32 (4) The board shall not issue a wholesale distributor license to an
33 applicant, unless the board:
34 (a) Conducts a physical inspection of the facility at the address pro-
35 vided by the applicant as required in subsection (2)(a) of this section;
36 and
37 (b) Determines that the designated representative meets the following
38 qualifications:
39 (i) Is at least twenty-one (21) years of age;
40 (ii) Has been employed full time for at least three (3) years in a
41 pharmacy or with a wholesale distributor in a capacity related to the
42 dispensing and distribution of, and recordkeeping relating to, pre-
43 scription drugs;
44 (iii) Is employed by the applicant full time in a managerial level
45 position;
46 (iv) Is actively involved in and aware of the actual daily opera-
47 tion of the wholesale distributor;
48 (v) Is physically present at the facility of the applicant during
49 regular business hours, except when the absence of the designated
50 representative is authorized including, but not limited to, sick
51 leave and vacation leave;
52 (vi) Is serving in the capacity of a designated representative for
53 only one (1) applicant at a time, except where more than one (1)
54 licensed wholesale distributor is colocated in the same facility and
55 such wholesale distributors are members of an affiliated group, as
6
1 defined in section 1504 of the Internal Revenue Code;
2 (vii) Does not have any convictions under any federal, state or
3 local law relating to wholesale or retail prescription drug distribu-
4 tion or distribution of controlled substances; and
5 (viii) Does not have any felony convictions under federal, state or
6 local law.
7 (5) The board shall submit the fingerprints provided by a person with a
8 license application for a statewide criminal records check and for forwarding
9 to the federal bureau of investigation for a national criminal records check
10 of the individual.
11 (6) The board shall require every wholesale distributor applying for a
12 license to submit a bond of at least one hundred thousand dollars ($100,000),
13 or other equivalent means of security acceptable to the board, such as an
14 irrevocable letter of credit or a deposit in a trust account or financial
15 institution, payable to a fund established by the board pursuant to subsection
16 (7) of this section. Chain pharmacy warehouses that are engaged only in
17 intracompany transfers are exempt from the bond requirement. The purpose of
18 the bond is to secure payment of any fines or penalties imposed by the board
19 and any fees and costs incurred by the board regarding that license, which are
20 authorized under the law of this state and which the licensee fails to pay
21 thirty (30) days after the fines, penalties or costs become final. The board
22 may make a claim against such bond or security until one (1) year after the
23 licensee's license ceases to be valid. A single bond may suffice to cover all
24 facilities operated by the applicant in this state.
25 (7) The board shall establish a fund, separate from its other accounts,
26 in which to deposit the wholesale distributor bonds.
27 (8) If a wholesale distributor distributes prescription drugs from more
28 than one (1) facility, the wholesale distributor shall obtain a license for
29 each facility.
30 (9) In accordance with each licensure renewal, the board shall send to
31 each wholesale distributor licensed under this section a form setting forth
32 the information that the wholesale distributor provided pursuant to subsection
33 (2) of this section. Within thirty (30) days of receiving such form, the
34 wholesale distributor must identify and state under oath to the board all
35 changes or corrections to the information that was provided pursuant to sub-
36 section (2) of this section. Changes in, or corrections to, any information in
37 subsection (2) of this section shall be submitted to the board as required by
38 the board. The board may suspend or revoke the license of a wholesale dis-
39 tributor if such authority determines that the wholesale distributor no longer
40 qualifies for the license issued under this section.
41 (10) The designated representative identified pursuant to subsection
42 (2)(g) of this section must receive and complete continuing training in appli-
43 cable federal law and the law of this state governing wholesale distribution
44 of prescription drugs.
45 (11) Information provided under this section shall not be disclosed to any
46 person other than a state licensing authority, government board or government
47 agency, provided such licensing authority, government board or agency needs
48 such information for licensing or monitoring purposes.
49 54-1754. RESTRICTIONS ON TRANSACTIONS. (1) A wholesale distributor shall
50 receive prescription drug returns or exchanges from a pharmacy or chain phar-
51 macy warehouse pursuant to the terms and conditions of the agreement between
52 the wholesale distributor and the pharmacy or chain pharmacy warehouse,
53 including the returns of expired, damaged and recalled pharmaceutical product
54 to either the original manufacturer, third party returns processor or reverse
7
1 distributor, and such returns or exchanges shall not be subject to the pedi-
2 gree requirement of section 54-1755, Idaho Code, so long as they are exempt
3 from pedigree under the federal food and drug administration's currently
4 applicable prescription drug marketing act guidance. Wholesale distributors
5 and pharmacies shall be held accountable for administering their returns proc-
6 ess and ensuring that the aspects of this operation are secure and do not per-
7 mit the entry of adulterated and counterfeit product.
8 (2) A manufacturer or wholesale distributor shall furnish prescription
9 drugs only to a person licensed by the board or other appropriate state
10 licensing authorities. Before furnishing prescription drugs to a person not
11 known to the manufacturer or wholesale distributor, the manufacturer or whole-
12 sale distributor shall affirmatively verify that the person is legally autho-
13 rized to receive the prescription drugs by contacting the appropriate state
14 licensing authorities.
15 (3) Prescription drugs furnished by a manufacturer or wholesale distribu-
16 tor shall be delivered only to the premises listed on the license; provided
17 that the manufacturer or wholesale distributor may furnish prescription drugs
18 to an authorized person or agent of that person at the premises of the manu-
19 facturer or wholesale distributor if:
20 (a) The identity and authorization of the recipient is properly estab-
21 lished; and
22 (b) This method of receipt is employed only to meet the immediate needs
23 of a particular patient of the authorized person.
24 (4) Prescription drugs may be furnished to a hospital pharmacy receiving
25 area provided that a pharmacist or authorized receiving personnel signs, at
26 the time of delivery, a receipt showing the type and quantity of the prescrip-
27 tion drug so received. Any discrepancy between receipt and the type and quan-
28 tity of the prescription drug actually received shall be reported to the
29 delivering manufacturer or wholesale distributor by the next business day
30 after the delivery to the pharmacy receiving area.
31 (5) A manufacturer or wholesale distributor shall not accept payment for,
32 or allow the use of, a person's credit to establish an account for the pur-
33 chase of prescription drugs from any person other than the owner(s) of record,
34 the chief executive officer or the chief financial officer listed on the
35 license of a person legally authorized to receive prescription drugs. Any
36 account established for the purchase of prescription drugs must bear the name
37 of the licensee.
38 54-1755. PEDIGREE. (1) In General. Each person who is engaged in whole-
39 sale distribution of prescription drugs, including repackagers, but excluding
40 the original manufacturer of the finished form of the prescription drug, that
41 leaves, or has ever left, the normal distribution channel shall, before each
42 wholesale distribution of such drug, provide a pedigree to the person who
43 receives such drug.
44 (a) A retail pharmacy or chain pharmacy warehouse shall comply with the
45 requirements of this section only if the pharmacy or chain pharmacy ware-
46 house engages in wholesale distribution of prescription drugs.
47 (b) The board shall determine by July 1, 2009, a targeted implementation
48 date for electronic track and trace pedigree technology. Such a determina-
49 tion shall be based on consultation with manufacturers, distributors and
50 pharmacies responsible for the sale and distribution of prescription drug
51 products in this state. After consultation with interested stakeholders
52 and prior to implementation of the electronic pedigree, the board shall
53 deem that the technology is universally available across the entire pre-
54 scription pharmaceutical supply chain. The implementation date for the
8
1 mandated electronic track and trace pedigree technology will be no sooner
2 than July 1, 2010, and may be extended by the board in one (1) year
3 increments if it appears the technology is not universally available
4 across the entire prescription pharmaceutical supply chain.
5 (2) Authentication. Each person who is engaged in the wholesale distribu-
6 tion of a prescription drug, including repackagers, but excluding the original
7 manufacturer of the finished form of the prescription drug, who is provided a
8 pedigree for a prescription drug and attempts to further distribute that pre-
9 scription drug, shall affirmatively verify before any wholesale distribution
10 of a prescription drug occurs that each transaction listed on the pedigree has
11 occurred.
12 (3) Contents. The pedigree shall:
13 (a) Include all necessary identifying information concerning each sale in
14 the chain of distribution of the product from the manufacturer, or the
15 manufacturer's third party logistics provider, colicensed product partner,
16 or manufacturer's exclusive distributor, through acquisition and sale by
17 any wholesale distributor or repackager, until final sale to a pharmacy or
18 other person dispensing or administering the drug. At minimum, the neces-
19 sary pedigree information shall include:
20 (i) Name, address, telephone number and, if available, the e-mail
21 address, of each owner of the prescription drug, and each wholesale
22 distributor of the prescription drug;
23 (ii) Name and address of each location from which the product was
24 shipped, if different from the owner's;
25 (iii) Transaction dates; and
26 (iv) Certification that each recipient has authenticated the pedi-
27 gree.
28 (b) At minimum, the pedigree shall also include the:
29 (i) Name of the prescription drug;
30 (ii) Dosage form and strength of the prescription drug;
31 (iii) Size of the container;
32 (iv) Number of containers;
33 (v) Lot number and national drug code number of the prescription
34 drug; and
35 (vi) Name of the manufacturer of the finished dosage form.
36 (4) Maintenance Provisions. Each pedigree or electronic file shall be:
37 (a) Notwithstanding the provisions in section 54-1735, Idaho Code, main-
38 tained by the purchaser and the wholesale distributor for not less than
39 three (3) years from the date of sale or transfer; and
40 (b) Available for inspection or use within five (5) business days upon a
41 request of an authorized officer of the law.
42 (5) Implementation. The board shall adopt rules and a form relating to
43 the requirements of this section no later than ninety (90) days after the
44 effective date of this act.
45 54-1756. ENFORCEMENT -- ORDER TO CEASE DISTRIBUTION OF A DRUG. (1) If the
46 board finds that there is a reasonable probability that:
47 (a) A wholesale distributor, other than a manufacturer, has:
48 (i) Violated a provision in this act; or
49 (ii) Falsified a pedigree, or sold, distributed, transferred, manu-
50 factured, repackaged, handled or held a counterfeit prescription drug
51 intended for human use; and
52 (b) The prescription drug at issue as a result of a violation in para-
53 graph (a) of this subsection could cause serious, adverse health conse-
54 quences or death; and
9
1 (c) Other procedures would result in unreasonable delay;
2 the board shall issue an order requiring the appropriate person, including the
3 distributors or retailers of the drug, to immediately cease distribution of
4 the drug within that state.
5 (2) An order under subsection (1) of this section shall provide the per-
6 son subject to the order with an opportunity for an informal hearing, to be
7 held not later than ten (10) days after the date of the issuance of the order,
8 on the actions required by the order. If, after providing an opportunity for
9 such a hearing, the board determines that inadequate grounds exist to support
10 the actions required by the order, the board shall vacate the order.
11 54-1757. PROHIBITED ACTS. (1) It is unlawful for a person to perform or
12 cause the performance of or aid and abet any of the following acts in this
13 state:
14 (a) Failure to obtain a license in accordance with this act, or operating
15 without a valid license when a license is required by this act;
16 (b) If the requirements of section 54-1754(1), Idaho Code, are applicable
17 and are not met, the purchasing or otherwise receiving a prescription drug
18 from a pharmacy;
19 (c) If a state license is required pursuant to section 54-1754(2), Idaho
20 Code, the sale, distribution or transfer of a prescription drug to a per-
21 son that is not authorized under the law of the jurisdiction in which the
22 person receives the prescription drug to receive the prescription drug;
23 (d) Failure to deliver prescription drugs to specified premises, as
24 required by section 54-1754(3), Idaho Code;
25 (e) Accepting payment or credit for the sale of prescription drugs in
26 violation of section 54-1754(5), Idaho Code;
27 (f) Failure to maintain or provide pedigrees as required by this act;
28 (g) Failure to obtain, pass or authenticate a pedigree, as required by
29 this act;
30 (h) Providing the board or any of its representatives or any federal
31 official with false or fraudulent records or making false or fraudulent
32 statements regarding any matter within the provisions of this act;
33 (i) Obtaining or attempting to obtain a prescription drug by fraud,
34 deceit, misrepresentation or engaging in misrepresentation or fraud in the
35 distribution of a prescription drug;
36 (j) Except for the wholesale distribution by manufacturers of a prescrip-
37 tion drug that has been delivered into commerce pursuant to an application
38 approved under federal law by the food and drug administration, the manu-
39 facture, repackaging, sale, transfer, delivery, holding or offering for
40 sale any prescription drug that is adulterated, misbranded, counterfeit,
41 suspected of being counterfeit or has otherwise been rendered unfit for
42 distribution;
43 (k) Except for the wholesale distribution by manufacturers of a prescrip-
44 tion drug that has been delivered into commerce pursuant to an application
45 approved under federal law by the food and drug administration, the adul-
46 teration, misbranding or counterfeiting of any prescription drug;
47 (l) The receipt of any prescription drug that is adulterated, misbranded,
48 stolen, obtained by fraud or deceit, counterfeit or suspected of being
49 counterfeit, and the delivery or proffered delivery of such drug for pay
50 or otherwise; and
51 (m) The alteration, mutilation, destruction, obliteration or removal of
52 the whole or any part of the labeling of a prescription drug or the com-
53 mission of any other act with respect to a prescription drug that results
54 in the prescription drug being misbranded.
10
1 (2) The acts prohibited in subsection (1) of this section do not include
2 a prescription drug manufacturer, or agent of a prescription drug manufac-
3 turer, obtaining or attempting to obtain a prescription drug for the sole pur-
4 pose of testing the prescription drug for authenticity.
5 54-1758. PENALTIES. (1) Unknowing Violations. If a person unknowingly
6 engages in the wholesale distribution of prescription drugs in violation of
7 this act, the person may be fined not more than ten thousand dollars
8 ($10,000).
9 (2) Knowing Violations. If a person knowingly engages in wholesale dis-
10 tribution of prescription drugs in violation of this act, the person shall be
11 imprisoned for any term of years, or fined not more than five hundred thousand
12 dollars ($500,000), or both.
STATEMENT OF PURPOSE
RS 17012
Since 2000 there have been an increasing number of counterfeit drugs
that have made their way into the wholesale distribution chain and
ended up in the hands of American consumers. This legislation is
proposed to limit the opportunity to introduce counterfeit drugs into
the U.S. market via the wholesale transfer process. The legislation
accomplishes this by tightening the rules around the licensing of
prescription drug wholesalers and establishes pedigree requirements to
ensure the authenticity of prescription drugs within the distribution
system. The legislation also establishes penalties for violators
FISCAL IMPACT
There will be no fiscal impact on the State s general fund or dedicated
funds.
Contact
Name: Senator Joyce Broadsword
Phone: 208-332-1000
ElizabethCriner
Phone: 208-385-7070
STATEMENT OF PURPOSE/FISCAL NOTE S 1146