Assigned to HEALTH FOR
CAUCUS & FLOOR ACTION
ARIZONA STATE SENATE
Forty-seventh Legislature, First Regular Session
AMENDED
FACT SHEET FOR H.B. 2193
prescription-only drugs; wholesalers; licensure
Purpose
Establishes additional requirements for full service wholesale permittees that are regulated by the State Board of Pharmacy, including maintaining a bond and having a designated representative. Adds requirements for and restrictions on certain prescription drug transactions. Establishes pedigree requirements for prescription drugs that leave the normal distribution channel.
Background
The State Board of Pharmacy (Board) licenses pharmacists, pharmacy interns, pharmacy technicians and pharmacy technician trainees and issues permits to pharmacies, drug manufacturers, drug wholesalers and distributors in the state. It also regulates out of state permit holders.
Statute defines a “full service wholesale permittee” as “a permittee who may distribute prescription-only drugs and devices, controlled substances and over-the-counter drugs and devices to pharmacies or other legal outlets from a place devoted in whole or in part to wholesaling these items.” H.B. 2193 adds requirements for full service wholesale permittees, including maintaining a bond and having a designated representative.
The “normal distribution channel" for prescription drugs is not currently defined in statute or in this bill. However, according to the State Board of Pharmacy, the “normal distribution channel” can be defined as when the drug leaves the manufacturer, and then goes to the wholesaler, who then sells it to either the dispensing practitioner, retail pharmacy or the hospital pharmacy so that the drug may be given to the patient. If drugs do not follow this normal channel, it can be difficult to determine the authenticity of the drugs being distributed and whether these drugs are counterfeit.
A counterfeit drug could contain inactive ingredients, incorrect ingredients, improper dosages, sub-potent or super-potent ingredients or contaminants. The Food and Drug Administration (FDA) reports that the average number of counterfeit drug investigations since 2000 surpasses 20 a year, while the average was 5 a year through the late 1990s.
The federal Prescription Drug Marketing Act (Act) of 1987 was designed to combat abuses in the distribution of prescription drugs, including counterfeit drugs. The Act contained pedigree requirements that require nonauthorized distributors to document the path of the prescription drugs. However, the FDA has not finalized the regulations to implement these requirements.
H.B. 2193 establishes pedigree requirements for drugs that leave the normal distribution channel.
There is no anticipated fiscal impact to the state General Fund as a result of this legislation.
Provisions
Definitions
1. Defines “chain pharmacy warehouse” as a physical location for prescription drugs that acts as a central warehouse and performs intracompany sales or transfers to pharmacies under common ownership or control.
2. Defines “pedigree” as a document or electronic file containing information of each distribution of a prescription-only drug from original sale by a manufacturer until final sale to a pharmacy or other person dispensing or administering the drug.
3. Defines “wholesale distribution” as distribution of a drug to someone other than a patient or consumer and excludes certain transactions from the definition of wholesale distribution.
Full Service Wholesale Permittees
4. Stipulates that a hospital is not a full service wholesale permittee.
5. Requires a full service wholesale permittee that engages in wholesale distribution of prescription drugs to maintain a bond and have a designated representative.
6. Requires the designated representative to serve for only one permittee and be:
a) at least 21 years old.
b) employed for at least three years by a pharmacy or permittee with experience related to dispensing, distribution and recordkeeping of prescription drugs.
c) employed by the permittee in a managerial position, actively involved in the operation of the distribution of prescription drugs and present at the permittee’s facility during regular business hours unless otherwise authorized.
d) without a conviction for violation of federal, state or local laws related to prescription drug or controlled substance distribution.
7. Allows the Board to require the designated representative to submit fingerprints and requires the Board to submit any fingerprints to the Department of Public Safety (DPS) for a records check.
8. Allows DPS to share fingerprint data with the Federal Bureau of Investigation.
9. Permits the Board to charge a fee for fingerprinting and requires the Board to forward the fee to DPS.
10. Requires the Board to require permittees applying for a permit or permit renewal to submit a $100,000 bond or other equivalent security, and stipulates the bond covers all permits held by the permittee.
11. Allows the Board to use the bond to secure payment of fines and penalties or for costs related to the permit that the permittee fails to pay.
12. Allows the Board to waive the bond requirement if the permittee holds a license in another state and has obtained a bond for that license.
Prescription Drug Transactions
13. Allows a full service wholesale permittee to accept prescription drugs returns or exchanges from pharmacies or chain pharmacy warehouse but prohibits returns or exchanges of adulterated or counterfeit drugs or a quantity more than the quantity originally sold to the pharmacy or warehouse.
14. Requires a permittee to:
a) provide prescription drugs only to a pharmacy or medical practitioner.
b) verify the person’s license or permit.
c) deliver prescription drugs only to the address listed on the license or permit.
15. Allows a permittee to provide prescription drugs to an authorized agent of the premises if the agent’s identity is established by the permittee and the delivery is used only for the immediate needs of a patient of the agent.
16. Allows a permittee to provide prescription drugs to a hospital pharmacy receiving area if the pharmacist or authorized person signs a detailed receipt; requires the person signing the receipt to report discrepancies between the receipt and the drugs received to the permittee by the next business day.
17. Prohibits a permittee from accepting payment for or establishing an account for the purchase of prescription drugs from anyone other than the owner, CEO or CFO listed on the license or permit or their authorized agent. Requires accounts to bear the name of the licensee or permittee.
Pedigree
18. Requires full services wholesale permittees to establish and maintain inventories and records of transactions for prescription drugs, including pedigrees for drugs that leave the normal distribution channel, with the following exceptions:
a) the original manufacturer of the finished drug.
b) the sale, trade or transfer of a prescription drug between pharmacies with common ownership.
c) sales, trades or transfers required by an emergency.
19. Subjects retail pharmacies and chain pharmacy warehouses that engage in the wholesale distribution of prescription drugs to the same requirements.
20. Requires any person engaged in the wholesale distribution of prescription drugs who possesses a pedigree to verify the transactions listed on the pedigree before attempting to further distribute the drug.
21. Stipulates the information that must be included in the pedigree and states that the information is public.
22. Requires purchasers and permittees to maintain the pedigree information for at least three years.
Miscellaneous
23. Allows the Board to apply for injunctive relief in addition to other remedies prescribed in statute.
24. Classifies violations of the provisions of the bill as a class 2 felony.
25. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Rewrites a section of the bill to clarify that violations of the bill are a class 2 felony.
House Action Senate Action
HEALTH 2/16/05 DPA 9-0-0 HEALTH 3/28/05 DPA 6-0-1
COM 2/23/05 DPA 5-0-0-4
3rd Read 56-2-2
Prepared by Senate Research
March 30, 2005
BK/jo