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S1184................................................by JUDICIARY AND RULES
WHOLESALE DRUG DISTRIBUTION - Adds to existing law relating to wholesale
drug distribution to define terms; to require licensure of wholesale drug
distributors; to provide licensing requirements; to provide for
restrictions on transactions; to require each person who is engaged in the
wholesale distribution of prescription drugs to provide a pedigree; to
provide for contents of a pedigree; to provide for recordkeeping; to
provide certain enforcement powers to the Board of Pharmacy; to provide for
enforcement procedures; to provide certain prohibited acts; and to provide
penalties.
03/01 Senate intro - 1st rdg - to printing
03/02 Rpt prt - to Health/Wel
03/06 Rpt out - rec d/p - to 2nd rdg
03/07 2nd rdg - to 3rd rdg
03/08 3rd rdg - PASSED - 31-4-0
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Jorgenson, Keough, Little, Lodge,
McGee, McKague, McKenzie, Pearce, Richardson, Schroeder, Siddoway,
Stegner, Werk
NAYS -- Kelly, Langhorst, Malepeai, Stennett
Absent and excused -- None
Floor Sponsor - Broadsword
Title apvd - to House
03/09 House intro - 1st rdg - to Jud
03/16 Rpt out - rec d/p - to 2nd rdg
03/19 2nd rdg - to 3rd rdg
03/22 3rd rdg - PASSED - 63-3-4
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
Block, Bock, Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew,
Clark, Collins, Crane, Durst, Edmunson, Eskridge, Hagedorn, Hart,
Harwood, Henbest, Jaquet, King, Kren, Lake, Loertscher, Luker(Luker),
Marriott, Mathews, McGeachin, Mortimer, Moyle, Nielsen, Nonini,
Pasley-Stuart, Patrick, Pence, Raybould, Ring, Rusche, Sayler,
Schaefer, Shepherd(2), Shepherd(8), Shirley, Shively, Smith(30),
Smith(24), Snodgrass, Stevenson, Thayn, Trail, Vander Woude, Wills,
Wood(27), Wood(35), Mr. Speaker
NAYS -- Killen, LeFavour, Ringo
Absent and excused -- Henderson, Labrador, Roberts, Ruchti
Floor Sponsor - Ring
Title apvd - to Senate
03/23 To enrol
03/26 Rpt enrol - Pres signed - Sp signed - To Governor
03/30 Governor signed
Session Law Chapter 319
Effective: 07/01/07
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature First Regular Session - 2007
IN THE SENATE
SENATE BILL NO. 1184
BY JUDICIARY AND RULES 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, 54-1758 AND 54-1759, IDAHO CODE, TO PROVIDE A
5 SHORT TITLE, TO DEFINE TERMS, TO REQUIRE LICENSURE OF WHOLESALE DRUG DIS-
6 TRIBUTORS, TO PROVIDE AN EXCEPTION, TO PROVIDE FOR LICENSING REQUIREMENTS,
7 TO PERMIT THE BOARD OF PHARMACY TO ADOPT RULES, TO PROVIDE FOR LIMITATION
8 ON DISCLOSURE OF INFORMATION, TO PROVIDE RESTRICTIONS ON TRANSACTIONS, TO
9 REQUIRE EACH PERSON WHO IS ENGAGED IN WHOLESALE DISTRIBUTION OF PRESCRIP-
10 TION DRUGS TO PROVIDE A PEDIGREE, TO PROVIDE EXCEPTIONS, TO REQUIRE VERI-
11 FICATION WITH EXCEPTION, TO PROVIDE FOR THE CONTENTS OF A PEDIGREE, TO
12 PROVIDE FOR RECORDKEEPING, TO REQUIRE THE BOARD OF PHARMACY TO TIMELY
13 ADOPT RULES AND A FORM, TO PROVIDE CERTAIN ENFORCEMENT POWERS TO THE
14 BOARD, TO PROVIDE FOR ENFORCEMENT PROCEDURE, TO PROVIDE FOR THE IMPOSITION
15 OF PENALTIES, TO STATE CERTAIN PROHIBITED ACTS WITH EXCEPTIONS AND TO PRO-
16 VIDE FOR CRIMINAL PENALTIES; AND PROVIDING SEVERABILITY.
17 Be It Enacted by the Legislature of the State of Idaho:
18 SECTION 1. That Chapter 17, Title 54, Idaho Code, be, and the same is
19 hereby amended by the addition thereto of NEW SECTIONS, to be known and desig-
20 nated as Sections 54-1751, 54-1752, 54-1753, 54-1754, 54-1755, 54-1756,
21 54-1757, 54-1758 and 54-1759, Idaho Code, and to read as follows:
22 54-1751. SHORT TITLE. Sections 54-1751 through 54-1759, Idaho Code, shall
23 be known and may be cited as the "Idaho Wholesale Drug Distribution Act."
24 54-1752. DEFINITIONS. As used in sections 54-1751 through 54-1759, Idaho
25 Code:
26 (1) "Authentication" means to affirmatively verify before any wholesale
27 distribution of a prescription drug occurs that each transaction listed on the
28 pedigree has occurred.
29 (2) "Authorized distributor of record" means a wholesale distributor with
30 whom a manufacturer has established an ongoing relationship to distribute the
31 manufacturer's prescription drug. An ongoing relationship is deemed to exist
32 between such wholesale distributor and a manufacturer when the wholesale dis-
33 tributor, including any affiliated group of the wholesale distributor, as
34 defined in section 1504 of the Internal Revenue Code, complies with the fol-
35 lowing:
36 (a) The wholesale distributor has a written agreement currently in effect
37 with the manufacturer evidencing such ongoing relationship; and
38 (b) The wholesale distributor is listed on the manufacturer's current
39 list of authorized distributors of record, which is updated by the manu-
40 facturer on no less than a monthly basis.
41 (3) "Chain pharmacy warehouse" means a physical location for prescription
42 drugs that acts as a central warehouse and performs intracompany sales or
2
1 transfers of such drugs to a group of chain pharmacies that have the same com-
2 mon ownership and control.
3 (4) "Colicensed partner or product" means an instance where two (2) or
4 more parties have the right to engage in the manufacturing and/or marketing
5 of a prescription drug, consistent with the federal food and drug
6 administration's implementation of the prescription drug marketing act.
7 (5) "Drop shipment" means the sale of a prescription drug to a wholesale
8 distributor or chain pharmacy warehouse by the manufacturer of the prescrip-
9 tion drug, or that manufacturer's colicensed product partner, that
10 manufacturer's third party logistics provider or that manufacturer's exclusive
11 distributor, whereby the wholesale distributor or chain pharmacy warehouse
12 takes title but not physical possession of such prescription drug and the
13 wholesale distributor invoices the pharmacy or chain pharmacy warehouse, or
14 other person authorized by law to dispense or administer such drug to a
15 patient, and the pharmacy or chain pharmacy warehouse or other authorized per-
16 son receives delivery of the prescription drug directly from the manufacturer,
17 or that manufacturer's third party logistics provider, or that manufacturer's
18 exclusive distributor.
19 (6) "Facility" means a facility of a wholesale distributor where pre-
20 scription drugs are stored, handled, repackaged or offered for sale.
21 (7) "Manufacturer" means a person licensed or approved by the federal
22 food and drug administration to engage in the manufacture of drugs or devices,
23 consistent with the federal food and drug administration definition of
24 "manufacturer" under its regulations and guidance implementing the prescrip-
25 tion drug marketing act.
26 (8) "Manufacturer's exclusive distributor" means anyone who contracts
27 with a manufacturer to provide or coordinate warehousing, distribution or
28 other services on behalf of a manufacturer and who takes title to that
29 manufacturer's prescription drug, but who does not have general responsibility
30 to direct the sale or disposition of the manufacturer's prescription drug.
31 Such manufacturer's exclusive distributor must be licensed as a wholesale dis-
32 tributor under section 54-1753, Idaho Code, and to be considered part of the
33 normal distribution channel, must also be an authorized distributor of record.
34 (9) "Normal distribution channel" means a chain of custody for a pre-
35 scription drug that goes from a manufacturer of the prescription drug, from
36 that manufacturer to that manufacturer's colicensed partner, from that manu-
37 facturer to that manufacturer's third-party logistics provider or from that
38 manufacturer to that manufacturer's exclusive distributor, either directly or
39 by drop shipment, to:
40 (a) A pharmacy to a patient;
41 (b) Other designated persons authorized by law to dispense or administer
42 such drug to a patient;
43 (c) A wholesale distributor to a pharmacy to a patient or other desig-
44 nated persons authorized by law to dispense or administer such drug to a
45 patient;
46 (d) A wholesale distributor to a chain pharmacy warehouse to that chain
47 pharmacy warehouse's intracompany pharmacy to a patient or other desig-
48 nated persons authorized by law to dispense or administer such drug to a
49 patient; or
50 (e) A chain pharmacy warehouse to the chain pharmacy warehouse's
51 intracompany pharmacy to a patient or other designated persons authorized
52 by law to dispense or administer such drug to a patient.
53 (10) "Pedigree" means a document or electronic file containing information
54 that records each wholesale distribution of any given prescription drug.
55 (11) "Prescription drug" means any drug, including any biological product,
3
1 except for blood and blood components intended for transfusion or biological
2 products that are also medical devices, required by federal law or federal
3 regulation to be dispensed only by a prescription, including finished dosage
4 forms and bulk drug substances, subject to section 503(b) of the federal food,
5 drug and cosmetic act.
6 (12) "Repackage" means repackaging or otherwise changing the container,
7 wrapper or labeling to further the distribution of a prescription drug,
8 excluding that completed by the pharmacist responsible for dispensing product
9 to the patient.
10 (13) "Repackager" means a person who repackages.
11 (14) "Third party logistics provider" means anyone who contracts with a
12 prescription drug manufacturer to provide or coordinate warehousing, distribu-
13 tion or other services on behalf of a manufacturer, but does not take title to
14 the prescription drug or have general responsibility to direct the prescrip-
15 tion drug's sale or disposition. Such third party logistics provider must be
16 licensed as a wholesale distributor under section 54-1753, Idaho Code, and to
17 be considered part of the normal distribution channel, must also be an autho-
18 rized distributor of record.
19 (15) "Wholesale distributor" means anyone engaged in the wholesale distri-
20 bution of prescription drugs including, but not limited to:
21 (a) Manufacturers;
22 (b) Repackagers;
23 (c) Own-label distributors;
24 (d) Private-label distributors;
25 (e) Jobbers;
26 (f) Brokers;
27 (g) Warehouses, including manufacturers' and distributors' warehouses;
28 (h) Manufacturer's exclusive distributors;
29 (i) Authorized distributors of record;
30 (j) Drug wholesalers or distributors;
31 (k) Independent wholesale drug traders;
32 (l) Specialty wholesale distributors;
33 (m) Third party logistics providers;
34 (n) Retail pharmacies that conduct wholesale distribution; and
35 (o) Chain pharmacy warehouses that conduct wholesale distribution.
36 To be considered part of the normal distribution channel, such wholesale dis-
37 tributor, except for a chain pharmacy warehouse not engaged in wholesale dis-
38 tribution, must also be an authorized distributor of record.
39 (16) "Wholesale distribution" means distribution of prescription drugs to
40 persons other than a consumer or patient, but does not include:
41 (a) Intracompany sales of prescription drugs, meaning any transaction or
42 transfer between any division, subsidiary, parent or affiliated or related
43 company under common ownership and control of a corporate entity, or any
44 transaction or transfer between colicensees of a colicensed product.
45 (b) The sale, purchase, distribution, trade or transfer of a prescription
46 drug or offer to sell, purchase, distribute, trade or transfer a prescrip-
47 tion drug for emergency medical reasons.
48 (c) The distribution of prescription drug samples by manufacturers' rep-
49 resentatives.
50 (d) Drug returns, when conducted by a hospital, health care entity or
51 charitable institution in accordance with 21 CFR 203.23.
52 (e) The sale of minimal quantities of prescription drugs by retail phar-
53 macies to licensed practitioners for office use.
54 (f) The sale, purchase or trade of a drug, an offer to sell, purchase or
55 trade a drug, or the dispensing of a drug pursuant to a prescription.
4
1 (g) The sale, transfer, merger or consolidation of all or part of the
2 business of a pharmacy or pharmacies from or with another pharmacy or
3 pharmacies, whether accomplished as a purchase and sale of stock or busi-
4 ness assets.
5 (h) The sale, purchase, distribution, trade or transfer of a prescription
6 drug from one (1) authorized distributor of record to one (1) additional
7 authorized distributor of record when the manufacturer has stated in writ-
8 ing to the receiving authorized distributor of record that the manufac-
9 turer is unable to supply such prescription drug and the supplying autho-
10 rized distributor of record states in writing that the prescription drug
11 being supplied had, until that time, been exclusively in the normal dis-
12 tribution channel.
13 (i) The delivery of, or offer to deliver, a prescription drug by a common
14 carrier solely in the common carrier's usual course of business of trans-
15 porting prescription drugs, and such common carrier does not store, ware-
16 house or take legal ownership of the prescription drug.
17 (j) The sale or transfer from a retail pharmacy or chain pharmacy ware-
18 house of expired, damaged, returned or recalled prescription drugs to the
19 original manufacturer or third party returns processor, including a
20 reverse distributor.
21 54-1753. WHOLESALE DRUG DISTRIBUTOR LICENSING REQUIREMENT -- MINIMUM
22 REQUIREMENTS FOR LICENSURE. (1) Every wholesale distributor who engages in the
23 wholesale distribution of prescription drugs must be licensed by the board,
24 and every nonresident wholesale distributor must be licensed by the board if
25 it ships prescription drugs into this state in accordance with this act before
26 engaging in wholesale distributions of wholesale prescription drugs. The board
27 shall exempt manufacturers distributing their own federal food and drug admin-
28 istration approved drugs and devices from any licensing and other requirements
29 to the extent not required by federal law or regulation, unless particular
30 requirements are deemed necessary and appropriate following rulemaking.
31 (2) The board shall require the following minimum information from each
32 wholesale distributor applying for a license under subsection (1) of this sec-
33 tion:
34 (a) The name, full business address and telephone number of the licensee;
35 (b) All trade or business names used by the licensee;
36 (c) Addresses, telephone numbers, and the names of contact persons for
37 all facilities used by the licensee for the storage, handling, and distri-
38 bution of prescription drugs;
39 (d) The type of ownership or operation, i.e., partnership, corporation,
40 or sole proprietorship;
41 (e) The name of each person who is an owner or an operator of the licen-
42 see;
43 (f) A list of all licenses and permits issued to the applicant by any
44 other state that authorizes the applicant to purchase or possess prescrip-
45 tion drugs;
46 (g) The name of the applicant's designated representative for the facil-
47 ity, together with the personal information statement and fingerprints,
48 required pursuant to paragraph (h) of this subsection (2) for such indi-
49 vidual;
50 (h) Each individual required by paragraph (g) of this subsection (2) to
51 provide a personal information statement and fingerprints shall provide
52 the following information to the board:
53 (i) The individual's places of residence for the past seven (7)
54 years;
5
1 (ii) The individual's date and place of birth;
2 (iii) The individual's occupations, positions of employment and
3 offices held during the past seven (7) years;
4 (iv) The principal business and address of any business, corpora-
5 tion or other organization in which each such office of the individ-
6 ual was held or in which each such occupation or position of employ-
7 ment was carried on;
8 (v) Whether the individual has been, during the past seven (7)
9 years, the subject of any proceeding for the revocation of any
10 license or any criminal violation and, if so, the nature of the pro-
11 ceeding and the disposition of the proceeding;
12 (vi) Whether, during the past seven (7) years, the individual has
13 been enjoined, either temporarily or permanently, by a court of com-
14 petent jurisdiction from violating any federal or state law regulat-
15 ing the possession, control or distribution of prescription drugs or
16 criminal violations, together with details concerning any such event;
17 (vii) A description of any involvement by the individual with any
18 business, including any investments, other than the ownership of
19 stock in a publicly traded company or mutual fund, during the past
20 seven (7) years, which manufactured, administered, prescribed, dis-
21 tributed or stored pharmaceutical products, and any lawsuits in which
22 such businesses were named as a party;
23 (viii) A description of any felony criminal offense of which the
24 individual, as an adult, was found guilty, regardless of whether
25 adjudication of guilt was withheld or whether the individual pled
26 guilty or nolo contendere. If the individual indicates that a crimi-
27 nal conviction is under appeal and submits a copy of the notice of
28 appeal of that criminal offense, the applicant must, within fifteen
29 (15) days after the disposition of the appeal, submit to the board a
30 copy of the final written order of disposition; and
31 (ix) A photograph of the individual taken in the previous year.
32 (3) The information required pursuant to subsection (2) of this section
33 shall be provided under oath.
34 (4) The board shall not issue a wholesale distributor license to an
35 applicant, unless the board:
36 (a) Conducts a physical inspection of the facility at the address pro-
37 vided by the applicant as required in subsection (2)(a) of this section;
38 and
39 (b) Determines that the designated representative meets the following
40 qualifications:
41 (i) Is at least twenty-one (21) years of age;
42 (ii) Has been employed full time for at least three (3) years in a
43 pharmacy or with a wholesale distributor in a capacity related to the
44 dispensing and distribution of, and recordkeeping relating to, pre-
45 scription drugs;
46 (iii) Is employed by the applicant full time in a managerial level
47 position;
48 (iv) Is actively involved in and aware of the actual daily opera-
49 tion of the wholesale distributor;
50 (v) Is physically present at the facility of the applicant during
51 regular business hours, except when the absence of the designated
52 representative is authorized including, but not limited to, sick
53 leave and vacation leave;
54 (vi) Is serving in the capacity of a designated representative for
55 only one (1) applicant at a time, except where more than one (1)
6
1 licensed wholesale distributor is colocated in the same facility and
2 such wholesale distributors are members of an affiliated group, as
3 defined in section 1504 of the Internal Revenue Code;
4 (vii) Does not have any convictions under any federal, state or
5 local law relating to wholesale or retail prescription drug distribu-
6 tion or distribution of controlled substances; and
7 (viii) Does not have any felony convictions under federal, state or
8 local law.
9 (5) The board shall submit the fingerprints provided by a person with a
10 license application for a statewide criminal records check and for forwarding
11 to the federal bureau of investigation for a national criminal records check
12 of the individual.
13 (6) The board shall require every wholesale distributor applying for a
14 license to submit a bond of at least one hundred thousand dollars ($100,000),
15 or other equivalent means of security acceptable to the board, such as an
16 irrevocable letter of credit or a deposit in a trust account or financial
17 institution, payable to a fund established by the board pursuant to subsection
18 (7) of this section. Chain pharmacy warehouses that are not engaged in whole-
19 sale distribution are exempt from the bond requirement. The purpose of the
20 bond is to secure payment of any fines or penalties imposed by the board and
21 any fees and costs incurred by the board regarding that license, which are
22 authorized under the law of this state and which the licensee fails to pay
23 thirty (30) days after the fines, penalties or costs become final. The board
24 may make a claim against such bond or security until one (1) year after the
25 licensee's license ceases to be valid. A single bond may suffice to cover all
26 facilities operated by the applicant in this state.
27 (7) The board shall establish a fund, separate from its other accounts,
28 in which to deposit the wholesale distributor bonds.
29 (8) If a wholesale distributor distributes prescription drugs from more
30 than one (1) facility, the wholesale distributor shall obtain a license for
31 each facility.
32 (9) In accordance with each licensure renewal, the board shall send to
33 each wholesale distributor licensed under this section a form setting forth
34 the information that the wholesale distributor provided pursuant to subsection
35 (2) of this section. Within thirty (30) days of receiving such form, the
36 wholesale distributor must identify and state under oath to the board all
37 changes or corrections to the information that was provided pursuant to sub-
38 section (2) of this section. Changes in, or corrections to, any information in
39 subsection (2) of this section shall be submitted to the board as required by
40 the board. The board may suspend or revoke the license of a wholesale dis-
41 tributor if such authority determines that the wholesale distributor no longer
42 qualifies for the license issued under this section.
43 (10) The designated representative identified pursuant to subsection
44 (2)(g) of this section must receive and complete continuing training in appli-
45 cable federal law and the law of this state governing wholesale distribution
46 of prescription drugs.
47 (11) The board may adopt rules to approve an accreditation body to evalu-
48 ate a wholesaler's operations to determine compliance with professional stan-
49 dards and any other applicable laws, and to perform inspections of each facil-
50 ity and location where wholesale distribution operations are conducted by the
51 wholesaler.
52 (12) Information provided under this section shall not be disclosed to any
53 person other than a state licensing authority, government board or government
54 agency, provided such licensing authority, government board or agency needs
55 such information for licensing or monitoring purposes.
7
1 54-1754. RESTRICTIONS ON TRANSACTIONS. (1) A wholesale distributor shall
2 receive prescription drug returns or exchanges from a pharmacy or chain phar-
3 macy warehouse pursuant to the terms and conditions of the agreement between
4 the wholesale distributor and the pharmacy or chain pharmacy warehouse.
5 Returns of expired, damaged, recalled or otherwise nonsaleable pharmaceutical
6 product shall be distributed by the receiving wholesale distributor only to
7 either the original manufacturer or third party returns processor, including a
8 reverse distributor. The returns or exchanges of prescription drugs, saleable
9 or otherwise, including any redistribution by a receiving wholesaler, shall
10 not be subject to the pedigree requirement of section 54-1755, Idaho Code, so
11 long as they are exempt from pedigree under the federal food and drug
12 administration's currently applicable prescription drug marketing act guid-
13 ance. Wholesale distributors and pharmacies shall be held accountable for
14 administering their returns process and ensuring that the aspects of this
15 operation are secure and do not permit the entry of adulterated and counter-
16 feit product.
17 (2) A manufacturer or wholesale distributor shall furnish prescription
18 drugs only to a person licensed by the board or other appropriate state
19 licensing authorities. Before furnishing prescription drugs to a person not
20 known to the manufacturer or wholesale distributor, the manufacturer or whole-
21 sale distributor shall affirmatively verify that the person is legally autho-
22 rized to receive the prescription drugs by contacting the appropriate state
23 licensing authorities.
24 (3) Prescription drugs furnished by a manufacturer or wholesale distribu-
25 tor shall be delivered only to the premises listed on the license; provided
26 that the manufacturer or wholesale distributor may furnish prescription drugs
27 to an authorized person or agent of that person at the premises of the manu-
28 facturer or wholesale distributor if:
29 (a) The identity and authorization of the recipient is properly estab-
30 lished; and
31 (b) This method of receipt is employed only to meet the immediate needs
32 of a particular patient of the authorized person.
33 (4) Prescription drugs may be furnished to a hospital pharmacy receiving
34 area provided that a pharmacist or authorized receiving personnel signs, at
35 the time of delivery, a receipt showing the type and quantity of the prescrip-
36 tion drug so received. Any discrepancy between receipt and the type and quan-
37 tity of the prescription drug actually received shall be reported to the
38 delivering manufacturer or wholesale distributor by the next business day
39 after the delivery to the pharmacy receiving area.
40 (5) A manufacturer or wholesale distributor shall not accept payment for,
41 or allow the use of, a person's credit to establish an account for the pur-
42 chase of prescription drugs from any person other than the owner(s) of record,
43 the chief executive officer or the chief financial officer listed on the
44 license of a person legally authorized to receive prescription drugs. Any
45 account established for the purchase of prescription drugs must bear the name
46 of the licensee.
47 54-1755. PEDIGREE. (1) In General. Each person who is engaged in whole-
48 sale distribution of prescription drugs, including repackagers, but excluding
49 the original manufacturer of the finished form of the prescription drug, that
50 leaves, or has ever left, the normal distribution channel shall, before each
51 wholesale distribution of such drug, provide a pedigree to the person who
52 receives such drug.
53 (a) A retail pharmacy or chain pharmacy warehouse shall comply with the
54 requirements of this section only if the pharmacy or chain pharmacy ware-
8
1 house engages in wholesale distribution of prescription drugs.
2 (b) The board shall determine by July 1, 2009, a targeted implementation
3 date for electronic track and trace pedigree technology. Such a determina-
4 tion shall be based on consultation with manufacturers, distributors and
5 pharmacies responsible for the sale and distribution of prescription drug
6 products in this state. After consultation with interested stakeholders
7 and prior to implementation of the electronic pedigree, the board shall
8 deem that the technology is universally available across the entire pre-
9 scription pharmaceutical supply chain. The implementation date for the
10 mandated electronic track and trace pedigree technology will be no sooner
11 than July 1, 2010, and may be extended by the board in one (1) year incre-
12 ments if it appears the technology is not universally available across the
13 entire prescription pharmaceutical supply chain.
14 (2) Authentication. Each person who is engaged in the wholesale distribu-
15 tion of a prescription drug, including repackagers, but excluding the original
16 manufacturer of the finished form of the prescription drug, who is provided a
17 pedigree for a prescription drug and attempts to further distribute that pre-
18 scription drug, shall affirmatively verify before any wholesale distribution
19 of a prescription drug occurs that each transaction listed on the pedigree has
20 occurred.
21 (3) Contents. The pedigree shall:
22 (a) Include all necessary identifying information concerning each sale in
23 the chain of distribution of the product from the manufacturer, or the
24 manufacturer's third party logistics provider, colicensed product partner,
25 or manufacturer's exclusive distributor, through acquisition and sale by
26 any wholesale distributor or repackager, until final sale to a pharmacy or
27 other person dispensing or administering the drug. At minimum, the neces-
28 sary pedigree information shall include:
29 (i) Name, address, telephone number and, if available, the e-mail
30 address, of each owner of the prescription drug, and each wholesale
31 distributor of the prescription drug;
32 (ii) Name and address of each location from which the product was
33 shipped, if different from the owner's;
34 (iii) Transaction dates; and
35 (iv) Certification that each recipient has authenticated the pedi-
36 gree.
37 (b) At minimum, the pedigree shall also include the:
38 (i) Name of the prescription drug;
39 (ii) Dosage form and strength of the prescription drug;
40 (iii) Size of the container;
41 (iv) Number of containers;
42 (v) Lot number and national drug code number of the prescription
43 drug; and
44 (vi) Name of the manufacturer of the finished dosage form.
45 (4) Maintenance Provisions. Each pedigree or electronic file shall be:
46 (a) Notwithstanding the provisions in section 54-1735, Idaho Code, main-
47 tained by the purchaser and the wholesale distributor for not less than
48 three (3) years from the date of sale or transfer; and
49 (b) Available for inspection or use within five (5) business days upon a
50 request of an authorized officer of the law.
51 (5) Implementation. The board shall adopt rules and a form relating to
52 the requirements of this section no later than ninety (90) days after the
53 effective date of this act.
54 54-1756. ENFORCEMENT -- ORDER TO CEASE DISTRIBUTION OF A DRUG. (1) If the
9
1 board finds that there is a reasonable probability that:
2 (a) A wholesale distributor, other than a manufacturer, has:
3 (i) Violated a provision in this act; or
4 (ii) Falsified a pedigree, or sold, distributed, transferred, manu-
5 factured, repackaged, handled or held a counterfeit prescription drug
6 intended for human use; and
7 (b) The prescription drug at issue as a result of a violation in para-
8 graph (a) of this subsection could cause serious, adverse health conse-
9 quences or death; and
10 (c) Other procedures would result in unreasonable delay;
11 the board shall issue an order requiring the appropriate person, including the
12 distributors or retailers of the drug, to immediately cease distribution of
13 the drug within the state.
14 (2) An order under subsection (1) of this section shall provide the per-
15 son subject to the order with an opportunity for an informal hearing, to be
16 held not later than ten (10) days after the date of the issuance of the order,
17 on the actions required by the order. If, after providing an opportunity for
18 such a hearing, the board determines that inadequate grounds exist to support
19 the actions required by the order, the board shall vacate the order.
20 54-1757. DISCIPLINE -- GROUNDS -- PENALTIES. (1) Upon a finding that a
21 wholesale distributor is in violation of any provision of this chapter or of
22 this act, or such rules or standards of conduct and practice as may be adopted
23 by the board, and in accordance with the provisions of chapter 52, title 67,
24 Idaho Code, the board may impose any one (1) or more of the penalties provided
25 for in section 54-1728, Idaho Code.
26 (2) Imposition of a penalty by the board or other action against a whole-
27 sale distributor by the board as set forth in this act shall not be construed
28 as barring other civil, administrative or criminal proceedings or prosecutions
29 or entry of any available penalty or sanction as authorized by law.
30 54-1758. PROHIBITED ACTS. (1) It shall be unlawful for a person to know-
31 ingly perform, or cause the performance of, or aid and abet any of the follow-
32 ing acts in this state:
33 (a) Failure to obtain a license when a license is required by this act;
34 (b) Operate as a wholesale distributor without a valid license when a
35 license is required by this act;
36 (c) Purchase from or otherwise receive, return or exchange a prescription
37 drug from a pharmacy or chain pharmacy warehouse, other than in compliance
38 with section 54-1754(1), Idaho Code;
39 (d) When a state license is required pursuant to section 54-1754(2),
40 Idaho Code, sell, distribute, transfer or otherwise furnish a prescription
41 drug to a person who is not authorized under the law of the jurisdiction
42 in which the person received the prescription drug to receive the pre-
43 scription drug;
44 (e) Failure to deliver prescription drugs to specified premises, as
45 required by section 54-1754(3), Idaho Code;
46 (f) Acceptance of payment or credit for the purchase of prescription
47 drugs, other than in compliance with section 54-1754(5), Idaho Code;
48 (g) Failure to maintain or provide pedigrees as required by this act;
49 (h) Failure to obtain, pass or authenticate a pedigree, as required by
50 this act;
51 (i) Provide the board or any of its representatives or any federal offi-
52 cial with false or fraudulent records or make false or fraudulent state-
53 ments regarding any matter within the provisions of this act;
10
1 (j) Obtain, or attempt to obtain, a prescription drug by fraud, deceit or
2 misrepresentation or engage in misrepresentation or fraud in the distribu-
3 tion of a prescription drug;
4 (k) Manufacture, repackage, sell, transfer, deliver, hold or offer for
5 sale any prescription drug that is adulterated, misbranded, counterfeit,
6 suspected of being counterfeit or otherwise has been rendered unfit for
7 distribution;
8 (l) Adulterate, misbrand or counterfeit any prescription drug;
9 (m) Receive any prescription drug that is adulterated, misbranded,
10 stolen, obtained by fraud or deceit, counterfeit or suspected of being
11 counterfeit;
12 (n) Deliver or proffer delivery of, for pay or otherwise, any prescrip-
13 tion drug that is adulterated, misbranded, stolen, obtained by fraud or
14 deceit, counterfeit or suspected of being counterfeit;
15 (o) Alter, mutilate, destroy, obliterate or remove the whole or any part
16 of the labeling of a prescription drug or commit any other act with
17 respect to a prescription drug that results in the prescription drug being
18 misbranded; or
19 (p) Sell, deliver, transfer or offer to sell to a person not authorized
20 under law to receive the return or exchange of a prescription drug, a pre-
21 scription drug that has expired, been damaged or recalled by either the
22 original manufacturer, a third party returns processor or a reverse dis-
23 tributor.
24 (2) The acts prohibited in subsection (1) of this section do not include
25 a prescription drug manufacturer, or agent of a prescription drug manufac-
26 turer, who obtains or attempts to obtain a prescription drug for the sole pur-
27 pose of testing the prescription drug for authenticity.
28 54-1759. PENALTIES. (1) Any person who commits any act prohibited by sec-
29 tion 54-1758(1)(a) through (1)(h), Idaho Code, is guilty of a misdemeanor,
30 which is punishable by not more than one (1) year of imprisonment, or by a
31 fine not exceeding five thousand dollars ($5,000), or both.
32 (2) Any person who commits any act prohibited by section 54-1758(1)(i)
33 through (1)(p), Idaho Code, is guilty of a felony, which is punishable by
34 imprisonment for a term of not less than five (5) years and not more than
35 twenty (20) years, or by a fine not exceeding five hundred thousand dollars
36 ($500,000), or both.
37 (3) Any person who, with the intent to commit any of the acts prohibited
38 by section 54-1758(1)(i) through (1)(p), Idaho Code, commits any act prohib-
39 ited by section 54-1758(1)(a) through (1)(h), Idaho Code, is guilty of a fel-
40 ony, which is punishable by imprisonment for a term of not less than five (5)
41 years and not more than twenty (20) years, or by a fine not exceeding five
42 hundred thousand dollars ($500,000), or both.
43 (4) Any criminal penalty imposed on a person who commits any act prohib-
44 ited by section 54-1758, Idaho Code, is in addition to, and not in lieu of,
45 any other civil or administrative penalty or sanction authorized by law.
46 SECTION 2. SEVERABILITY. The provisions of this act are hereby declared
47 to be severable and if any provision of this act or the application of such
48 provision to any person or circumstance is declared invalid for any reason,
49 such declaration shall not affect the validity of the remaining portions of
50 this act.
STATEMENT OF PURPOSE
RS 17127
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 NOTE
There will be no fiscal impact on the State's general fund. No
fiscal impact is anticipated on dedicated funds due to ability of
Board of Pharmacy to either raise licensure fees for wholesalers
or use existing accreditation body.
Contact
Name: Senator Joyce Broadsword
Phone: 208-322-1000
Elizabeth Criner
Phone: 208-385-7070
STATEMENT OF PURPOSE/FISCAL NOTE S 1184