2008 Legislation
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SENATE BILL NO. 1377<br /> – Wholesale drug dist license


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Bill Status

S1377.................................................by HEALTH AND WELFARE
WHOLESALE DRUG DISTRIBUTION - Amends existing law relating to wholesale
drug distribution to provide for additional information required for
licensure; to remove a bond requirement; and to remove a requirement to
establish a fund.

02/05    Senate intro - 1st rdg - to printing
02/06    Rpt prt - to Health/Wel
02/08    Rpt out - rec d/p - to 2nd rdg
02/11    2nd rdg - to 3rd rdg
02/13    3rd rdg - PASSED - 34-0-1
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
      Goedde, Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai(Sagness), McGee, McKague, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- McKenzie
    Floor Sponsor - Broadsword
    Title apvd - to House
02/14    House intro - 1st rdg - to Health/Wel
03/11    Rpt out - rec d/p - to 2nd rdg
03/12    2nd rdg - to 3rd rdg
03/13    3rd rdg - PASSED - 66-0-4
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Black, Block,
      Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez,
      Chew, Clark, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
      Henbest, Henderson, Jaquet, Killen, King, Labrador, Lake, LeFavour,
      Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer, Moyle,
      Nielsen, Nonini, Pasley-Stuart, Patrick, Pence, Raybould, Ringo,
      Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
      Shepherd(08), Shirley, Smith(30), Smith(24), Snodgrass, Stevenson,
      Thayn, Thomas, Trail, Vander Woude, Wills, Wood(27), Wood(35), Mr.
      NAYS -- None
      Absent and excused -- Bilbao, Harwood, Kren, Shively
    Floor Sponsor - Chew
    Title apvd - to Senate
03/14    To enrol
03/17    Rpt enrol - Pres signed - Sp signed
03/18    To Governor
03/18    Governor signed
         Session Law Chapter 190
         Effective: 03/18/08

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008


                                       IN THE SENATE

                                    SENATE BILL NO. 1377

                              BY HEALTH AND WELFARE COMMITTEE

  1                                        AN ACT

  6    Be It Enacted by the Legislature of the State of Idaho:

  7        SECTION  1.  That  Section 54-1753, Idaho Code, be, and the same is hereby
  8    amended to read as follows:

 10    REQUIREMENTS FOR LICENSURE. (1) Every wholesale distributor who engages in the
 11    wholesale  distribution  of  prescription drugs must be licensed by the board,
 12    and every nonresident wholesale distributor must be licensed by the  board  if
 13    it ships prescription drugs into this state in accordance with this act before
 14    engaging in wholesale distributions of wholesale prescription drugs. The board
 15    shall exempt manufacturers distributing their own federal food and drug admin-
 16    istration approved drugs and devices from any licensing and other requirements
 17    to  the  extent  not  required by federal law or regulation, unless particular
 18    requirements are deemed necessary and appropriate following rulemaking.
 19        (2)  The board shall require the following minimum information  from  each
 20    wholesale distributor applying for a license under subsection (1) of this sec-
 21    tion:
 22        (a)  The name, full business address and telephone number of the licensee;
 23        (b)  All trade or business names used by the licensee;
 24        (c)  Addresses,  telephone  numbers,  and the names of contact persons for
 25        all facilities used by the licensee for the storage, handling, and distri-
 26        bution of prescription drugs;
 27        (d)  The type of ownership or operation, i.e.,  partnership,  corporation,
 28        or sole proprietorship;
 29        (e)  The  name of each person who is an owner or an operator of the licen-
 30        see;
 31        (f)  A list of all licenses and permits issued to  the  applicant  by  any
 32        other state that authorizes the applicant to purchase or possess prescrip-
 33        tion drugs;
 34        (g)  The  name of the applicant's designated representative for the facil-
 35        ity, together with the personal information  statement  and  fingerprints,
 36        required  pursuant  to paragraph (h) of this subsection (2) for such indi-
 37        vidual;
 38        (h)  Each individual required by paragraph (g) of this subsection  (2)  to
 39        provide  a  personal  information statement and fingerprints shall provide
 40        the following information to the board:
 41             (i)    The individual's places of residence for the  past  seven  (7)
 42             years;
 43             (ii)   The individual's date and place of birth;


  1             (iii)  The  individual's  occupations,  positions  of  employment and
  2             offices held during the past seven (7) years;
  3             (iv)   The principal business and address of any  business,  corpora-
  4             tion  or other organization in which each such office of the individ-
  5             ual was held or in which each such occupation or position of  employ-
  6             ment was carried on;
  7             (v)    Whether  the  individual  has  been, during the past seven (7)
  8             years, the subject of  any  proceeding  for  the  revocation  of  any
  9             license or any criminal violation and,  if so, the nature of the pro-
 10             ceeding and the disposition of the proceeding;
 11             (vi)   Whether,  during  the past seven (7) years, the individual has
 12             been enjoined, either temporarily or permanently, by a court of  com-
 13             petent  jurisdiction from violating any federal or state law regulat-
 14             ing the possession, control or distribution of prescription drugs  or
 15             criminal violations, together with details concerning any such event;
 16             (vii)  A  description  of  any involvement by the individual with any
 17             business, including any investments,  other  than  the  ownership  of
 18             stock  in  a  publicly traded company or mutual fund, during the past
 19             seven (7) years, which manufactured, administered,  prescribed,  dis-
 20             tributed or stored pharmaceutical products, and any lawsuits in which
 21             such businesses were named as a party and in which the individual was
 22             also  a named party in the same lawsuit or, regardless of whether the
 23             individual was a named party, in which the individual testified as  a
 24             witness at trial or in a deposition;
 25             (viii) A  description  of  any  felony  criminal offense of which the
 26             individual, as an adult, was  found  guilty,  regardless  of  whether
 27             adjudication  of  guilt  was  withheld or whether the individual pled
 28             guilty or nolo contendere.  If the individual indicates that a crimi-
 29             nal conviction is under appeal and submits a copy of  the  notice  of
 30             appeal  of  that criminal offense, the applicant must, within fifteen
 31             (15) days after the disposition of the appeal, submit to the board  a
 32             copy of the final written order of disposition; and
 33             (ix)   A photograph of the individual taken in the previous year.
 34        (3)  The  information  required pursuant to subsection (2) of this section
 35    shall be provided under oath.
 36        (4)  The board shall not issue  a  wholesale  distributor  license  to  an
 37    applicant, unless the board:
 38        (a)  Conducts  a  physical  inspection of the facility at the address pro-
 39        vided by the applicant as required in subsection (2)(a) of  this  section;
 40        and
 41        (b)  Determines  that  the  designated  representative meets the following
 42        qualifications:
 43             (i)    Is at least twenty-one (21) years of age;
 44             (ii)   Has been employed full time for at least three (3) years in  a
 45             pharmacy or with a wholesale distributor in a capacity related to the
 46             dispensing  and  distribution of, and recordkeeping relating to, pre-
 47             scription drugs;
 48             (iii)  Is employed by the applicant full time in a  managerial  level
 49             position;
 50             (iv)   Is  actively  involved in and aware of the actual daily opera-
 51             tion of the wholesale distributor;
 52             (v)    Is physically present at the facility of the applicant  during
 53             regular  business  hours,  except  when the absence of the designated
 54             representative is authorized including,  but  not  limited  to,  sick
 55             leave and vacation leave;


  1             (vi)   Is  serving in the capacity of a designated representative for
  2             only one (1) applicant at a time, except  where  more  than  one  (1)
  3             licensed  wholesale distributor is colocated in the same facility and
  4             such wholesale distributors are members of an  affiliated  group,  as
  5             defined in section 1504 of the Internal Revenue Code;
  6             (vii)  Does  not  have  any  convictions  under any federal, state or
  7             local law relating to wholesale or retail prescription drug distribu-
  8             tion or distribution of controlled substances; and
  9             (viii) Does not have any felony convictions under federal,  state  or
 10             local law.
 11        (5)  The  board  shall submit the fingerprints provided by a person with a
 12    license  application for a statewide criminal records check and for forwarding
 13    to the federal bureau of investigation for a national criminal  records  check
 14    of the individual.
 15        (6)  The  board  shall  require every wholesale distributor applying for a
 16    license to submit a bond of at least one hundred thousand dollars  ($100,000),
 17    or  other  equivalent  means  of  security acceptable to the board, such as an
 18    irrevocable letter of credit or a deposit in  a  trust  account  or  financial
 19    institution, payable to a fund established by the board pursuant to subsection
 20    (7)  of this section. Chain pharmacy warehouses that are not engaged in whole-
 21    sale distribution are exempt from the bond requirement.  The  purpose  of  the
 22    bond  is  to secure payment of any fines or penalties imposed by the board and
 23    any fees and costs incurred by the board regarding  that  license,  which  are
 24    authorized  under  the  law of this state  and which the licensee fails to pay
 25    thirty (30) days after the fines, penalties or costs become final.  The  board
 26    may  make  a  claim against such bond or security until one (1) year after the
 27    licensee's license ceases to be valid. A single bond may suffice to cover  all
 28    facilities operated by the applicant in this state.
 29        (7)  The  board  shall establish a fund, separate from its other accounts,
 30    in which to deposit the wholesale distributor bonds.
 31        (8)  If a wholesale distributor distributes prescription drugs  from  more
 32    than  one  (1)  facility, the wholesale distributor shall obtain a license for
 33    each facility.
 34        (97)  In accordance with each licensure renewal, the board shall  send  to
 35    each  wholesale  distributor  licensed under this section a form setting forth
 36    the information that the wholesale distributor provided pursuant to subsection
 37    (2) of this section. Within thirty (30)  days  of  receiving  such  form,  the
 38    wholesale  distributor  must  identify  and  state under oath to the board all
 39    changes or corrections to the information that was provided pursuant  to  sub-
 40    section (2) of this section. Changes in, or corrections to, any information in
 41    subsection  (2) of this section shall be submitted to the board as required by
 42    the board. The board may suspend or revoke the license of a wholesale distrib-
 43    utor if such authority determines that the  wholesale  distributor  no  longer
 44    qualifies for the license issued under this section.
 45        (108)  The  designated  representative  identified  pursuant to subsection
 46    (2)(g) of this section must receive and complete continuing training in appli-
 47    cable federal law and the law of this state governing  wholesale  distribution
 48    of prescription drugs.
 49        (119)  The board may adopt rules to approve an accreditation body to eval-
 50    uate a wholesaler's operations to determine compliance with professional stan-
 51    dards and any other applicable laws, and to perform inspections of each facil-
 52    ity  and location where wholesale distribution operations are conducted by the
 53    wholesaler.
 54        (120) Information provided under this section shall not  be  disclosed  to
 55    any person other than a state licensing authority, government board or govern-


  1    ment  agency,  provided  such  licensing authority, government board or agency
  2    needs such information for licensing or monitoring purposes.

  3        SECTION 2.  An emergency existing  therefor,  which  emergency  is  hereby
  4    declared to exist, this act shall be in full force and effect on and after its
  5    passage and approval.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                           RS 17697C1

The legislature passed the Wholesale Drug Distribution Act in the
2007 session. During its implementation, the Board of Pharmacy
discovery two areas of concern. This bill addresses those
concerns. It would eliminate the bond requirement for wholesale
drug distribution licensure and clarify when the designated
representative would be required to submit a description of any
lawsuits in which such business, which employed the designated
representative over the past 7 years, were named as a party. Due
to the existing bond requirement, smaller wholesalers have
elected not to seek licensure in Idaho, eliminating the
availability of certain products and potentially raising
wholesale costs of other drugs. Clarification that only lawsuits
in which the designative representative was named as a party or
testified, eliminates the submission of thousands of pages of
irrelevant materials. The original intent of the Act will not be
affected and will help to keep counterfeit prescriptions out of
our supply chain while allowing small businesses to do business
in Idaho.

                          FISCAL IMPACT

There will be no impact to the state general fund.

Name: Senator Joyce Broadsword 
Phone: 208-332-1338
Mark Johnston, Exec. Dir Board of Pharmacy

STATEMENT OF PURPOSE/FISCAL NOTE                        S 1377