2007 Legislation
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SENATE BILL NO. 1184 – Wholesale drug distribution


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Bill Status

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

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

Bill Text

  ]]]]              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
  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
 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
  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,
  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.
  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.
 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;
  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)
  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.
  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-
  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.
  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;
  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 / Fiscal Impact

                       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.

Name: Senator Joyce Broadsword 
Phone: 208-322-1000
Elizabeth Criner
Phone: 208-385-7070

STATEMENT OF PURPOSE/FISCAL NOTE                        S 1184