2007 Legislation
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SENATE BILL NO. 1146 – Wholesale drug distribution


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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
02/12    Senate intro - 1st rdg - to printing
02/13    Rpt prt - to Health/Wel

Bill Text

  ]]]]              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
  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
 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.
  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
  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-
  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.
 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
  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
  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
  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
  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.
 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
  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.
  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 / Fiscal Impact

                      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

Name:   Senator Joyce Broadsword
Phone:  208-332-1000 
Phone:  208-385-7070

STATEMENT OF PURPOSE/FISCAL NOTE                                  S 1146