4160-4169
BUSINESS AND PROFESSIONS CODE
SECTION 4160-4169
4160. (a) A person may not act as a wholesaler of any dangerous
drug or dangerous device unless he or she has obtained a license from
the board.
(b) Upon approval by the board and the payment of the required
fee, the board shall issue a license to the applicant.
(c) A separate license shall be required for each place of
business owned or operated by a wholesaler. Each license shall be
renewed annually and shall not be transferable.
(d) Every wholesaler shall be supervised or managed by a
designated representative-in-charge. The designated
representative-in-charge shall be responsible for the wholesaler's
compliance with state and federal laws governing wholesalers. As part
of its initial application for a license, and for each renewal, each
wholesaler shall, on a form designed by the board, provide
identifying information and the California license number for a
designated representative or pharmacist proposed to serve as the
designated representative-in-charge. The proposed designated
representative-in-charge shall be subject to approval by the board.
The board shall not issue or renew a wholesaler license without
identification of an approved designated representative-in-charge for
the wholesaler.
(e) Every wholesaler shall notify the board in writing, on a form
designed by the board, within 30 days of the date when a designated
representative-in-charge ceases to act as the designated
representative-in-charge, and shall on the same form propose another
designated representative or pharmacist to take over as the
designated representative-in-charge. The proposed replacement
designated representative-in-charge shall be subject to approval by
the board. If disapproved, the wholesaler shall propose another
replacement within 15 days of the date of disapproval, and shall
continue to name proposed replacements until a designated
representative-in-charge is approved by the board.
(f) A drug manufacturer premises licensed by the Food and Drug
Administration or licensed pursuant to Section 111615 of the Health
and Safety Code that only distributes dangerous drugs and dangerous
devices of its own manufacture is exempt from this section and
Section 4161.
(g) The board may issue a temporary license, upon conditions and
for periods of time as the board determines to be in the public
interest. A temporary license fee shall be required in an amount
established by the board as specified in subdivision (f) of Section
4400. When needed to protect public safety, a temporary license may
be issued for a period not to exceed 180 days, subject to terms and
conditions that the board deems necessary. If the board determines
that a temporary license was issued by mistake or denies the
application for a permanent license, the temporary license shall
terminate upon either personal service of the notice of termination
upon the licenseholder or service by certified mail, return receipt
requested, at the licenseholder's address of record with the board,
whichever occurs first. Neither for purposes of retaining a temporary
license, nor for purposes of any disciplinary or license denial
proceeding before the board, shall the temporary licenseholder be
deemed to have a vested property right or interest in the license.
4161. (a) A person located outside this state that (1) ships,
sells, mails, or delivers dangerous drugs or dangerous devices into
this state or (2) sells, brokers, or distributes dangerous drugs or
devices within this state shall be considered a nonresident
wholesaler.
(b) A nonresident wholesaler shall be licensed by the board prior
to shipping, selling, mailing, or delivering dangerous drugs or
dangerous devices to a site located in this state or selling,
brokering, or distributing dangerous drugs or devices within this
state.
(c) A separate license shall be required for each place of
business owned or operated by a nonresident wholesaler from or
through which dangerous drugs or dangerous devices are shipped, sold,
mailed, or delivered to a site located in this state or sold,
brokered, or distributed within this state. A license shall be
renewed annually and shall not be transferable.
(d) The following information shall be reported, in writing, to
the board at the time of initial application for licensure by a
nonresident wholesaler, on renewal of a nonresident wholesaler
license, or within 30 days of a change in that information:
(1) Its agent for service of process in this state.
(2) Its principal corporate officers, as specified by the board,
if any.
(3) Its general partners, as specified by the board, if any.
(4) Its owners if the applicant is not a corporation or
partnership.
(e) A report containing the information in subdivision (d) shall
be made within 30 days of any change of ownership, office, corporate
officer, or partner.
(f) A nonresident wholesaler shall comply with all directions and
requests for information from the regulatory or licensing agency of
the state in which it is licensed, as well as with all requests for
information made by the board.
(g) A nonresident wholesaler shall maintain records of dangerous
drugs and dangerous devices sold, traded, or transferred to persons
in this state or within this state, so that the records are in a
readily retrievable form.
(h) A nonresident wholesaler shall at all times maintain a valid,
unexpired license, permit, or registration to conduct the business of
the wholesaler in compliance with the laws of the state in which it
is a resident. An application for a nonresident wholesaler license in
this state shall include a license verification from the licensing
authority in the applicant's state of residence.
(i) The board may not issue or renew a nonresident wholesaler
license until the nonresident wholesaler identifies a designated
representative-in-charge and notifies the board in writing of the
identity and license number of the designated
representative-in-charge.
(j) The designated representative-in-charge shall be responsible
for the nonresident wholesaler's compliance with state and federal
laws governing wholesalers. A nonresident wholesaler shall identify
and notify the board of a new designated representative-in-charge
within 30 days of the date that the prior designated
representative-in-charge ceases to be the designated
representative-in-charge.
(k) The board may issue a temporary license, upon conditions and
for periods of time as the board determines to be in the public
interest. A temporary license fee shall be five hundred fifty dollars
($550) or another amount established by the board not to exceed the
annual fee for renewal of a license to compound injectable sterile
drug products. When needed to protect public safety, a temporary
license may be issued for a period not to exceed 180 days, subject to
terms and conditions that the board deems necessary. If the board
determines that a temporary license was issued by mistake or denies
the application for a permanent license, the temporary license shall
terminate upon either personal service of the notice of termination
upon the licenseholder or service by certified mail, return receipt
requested, at the licenseholder's address of record with the board,
whichever occurs first. Neither for purposes of retaining a temporary
license, nor for purposes of any disciplinary or license denial
proceeding before the board, shall the temporary licenseholder be
deemed to have a vested property right or interest in the license.
(l) The registration fee shall be the fee specified in subdivision
(f) of Section 4400.
4162. (a) (1) An applicant, that is not a government owned and
operated wholesaler, for the issuance or renewal of a wholesaler
license shall submit a surety bond of one hundred thousand dollars
($100,000) or other equivalent means of security acceptable to the
board payable to the Pharmacy Board Contingent Fund. The purpose of
the surety bond is to secure payment of any administrative fine
imposed by the board and any cost recovery ordered pursuant to
Section 125.3.
(2) For purposes of paragraph (1), the board may accept a surety
bond less than one hundred thousand dollars ($100,000) if the annual
gross receipts of the previous tax year for the wholesaler is ten
million dollars ($10,000,000) or less, in which case the surety bond
shall be twenty-five thousand dollars ($25,000).
(3) A person to whom an approved new drug application has been
issued by the United States Food and Drug Administration who engages
in the wholesale distribution of only the dangerous drug specified in
the new drug application, and is licensed or applies for licensure
as a wholesaler, shall not be required to post a surety bond as
provided in paragraph (1).
(4) For licensees subject to paragraph (2) or (3), the board may
require a bond up to one hundred thousand dollars ($100,000) for any
licensee who has been disciplined by any state or federal agency or
has been issued an administrative fine pursuant to this chapter.
(b) The board may make a claim against the bond if the licensee
fails to pay a fine within 30 days after the order imposing the fine,
or costs become final.
(c) A single surety bond or other equivalent means of security
acceptable to the board shall satisfy the requirement of subdivision
(a) for all licensed sites under common control as defined in Section
4126.5.
4162.5. (a) (1) An applicant for the issuance or renewal of a
nonresident wholesaler license shall submit a surety bond of one
hundred thousand dollars ($100,000), or other equivalent means of
security acceptable to the board, such as an irrevocable letter of
credit, or a deposit in a trust account or financial institution,
payable to the Pharmacy Board Contingent Fund. The purpose of the
surety bond is to secure payment of any administrative fine imposed
by the board and any cost recovery ordered pursuant to Section 125.3.
(2) For purposes of paragraph (1), the board may accept a surety
bond less than one hundred thousand dollars ($100,000) if the annual
gross receipts of the previous tax year for the nonresident
wholesaler is ten million dollars ($10,000,000) or less in which the
surety bond shall be twenty-five thousand dollars ($25,000).
(3) For applicants who satisfy paragraph (2), the board may
require a bond up to one hundred thousand dollars ($100,000) for any
nonresident wholesaler who has been disciplined by any state or
federal agency or has been issued an administrative fine pursuant to
this chapter.
(4) A person to whom an approved new drug application or a
biologics license application has been issued by the United States
Food and Drug Administration who engages in the wholesale
distribution of only the dangerous drug specified in the new drug
application or biologics license application, and is licensed or
applies for licensure as a nonresident wholesaler, shall not be
required to post a surety bond as provided in this section.
(b) The board may make a claim against the bond if the licensee
fails to pay a fine within 30 days of the issuance of the fine or
when the costs become final.
(c) A single surety bond or other equivalent means of security
acceptable to the board shall satisfy the requirement of subdivision
(a) for all licensed sites under common control as defined in Section
4126.5.
4163. (a) A manufacturer, wholesaler, repackager, or pharmacy may
not furnish a dangerous drug or dangerous device to an unauthorized
person.
(b) Dangerous drugs or dangerous devices shall be acquired from a
person authorized by law to possess or furnish dangerous drugs or
dangerous devices. When the person acquiring the dangerous drugs or
dangerous devices is a wholesaler, the obligation of the wholesaler
shall be limited to obtaining confirmation of licensure of those
sources from whom it has not previously acquired dangerous drugs or
dangerous devices.
(c) Except as otherwise provided in Section 4163.5, commencing on
July 1, 2016, a wholesaler or repackager may not sell, trade, or
transfer a dangerous drug at wholesale without providing a pedigree.
(d) Except as otherwise provided in Section 4163.5, commencing on
July 1, 2016, a wholesaler or repackager may not acquire a dangerous
drug without receiving a pedigree.
(e) Except as otherwise provided in Section 4163.5, commencing on
July 1, 2017, a pharmacy may not sell, trade, or transfer a dangerous
drug at wholesale without providing a pedigree.
(f) Except as otherwise provided in Section 4163.5, commencing on
July 1, 2017, a pharmacy may not acquire a dangerous drug without
receiving a pedigree.
(g) Except as otherwise provided in Section 4163.5, commencing on
July 1, 2017, a pharmacy warehouse may not acquire a dangerous drug
without receiving a pedigree. For purposes of this section and
Section 4034, a "pharmacy warehouse" means a physical location
licensed as a wholesaler for prescription drugs that acts as a
central warehouse and performs intracompany sales or transfers of
those drugs to a group of pharmacies under common ownership and
control.
4163.1. It is the intent of the Legislature that commencing on
January 1, 2007, and continuing through the full implementation of
the pedigree requirements specified by Section 4163, manufacturers
and wholesalers shall use best efforts to provide in the most readily
accessible form possible, information regarding the manufacturer's
specific relationships in the distribution of dangerous drugs with
wholesalers.
4163.1. (a) For purposes of Sections 4034 and 4163, "drop shipment"
means a sale of a dangerous drug by the manufacturer of the
dangerous drug whereby all of the following occur:
(1) The pharmacy, or other person authorized by law to dispense or
administer the drug, receives delivery of the dangerous drug
directly from the manufacturer.
(2) The wholesale distributor takes ownership of, but not physical
possession of, the dangerous drug.
(3) The wholesale distributor invoices the pharmacy or other
person authorized by law to dispense or administer the drug in place
of the manufacturer.
(b) The board may develop regulations to establish an alternative
process to convey the pedigree information required in Section 4034
for dangerous drugs that are sold by drop shipment.
4163.2. (a) (1) A manufacturer, wholesaler, or pharmacy lawfully
possessing or owning dangerous drugs manufactured or distributed
prior to the operative date of the pedigree requirements, specified
in Sections 4034 and 4163, may designate these dangerous drugs as not
subject to the pedigree requirements by preparing a written
declaration made under penalty of perjury that lists those dangerous
drugs.
(2) The written declaration shall include the National Drug Code
Directory lot number for each dangerous drug designated. The written
declaration shall be submitted to and received by the board no later
than 30 days after the operative date of the pedigree requirements.
The entity or person submitting the written declaration shall also
retain for a period of three years and make available for inspection
by the board a copy of each written declaration submitted.
(3) The board may, by regulation, further specify the requirements
and procedures for the creation and submission of these written
declarations. Information contained in these declarations shall be
considered trade secrets and kept confidential by the board.
(b) Any dangerous drugs designated on a written declaration
timely created and submitted to the board may be purchased, sold,
acquired, returned, or otherwise transferred without meeting the
pedigree requirements, if the transfer complies with the other
requirements of this chapter.
4163.3. (a) It is the intent of the Legislature that participants
in the distribution chain for dangerous drugs, including
manufacturers, wholesalers, or pharmacies furnishing, administering,
or dispensing dangerous drugs, distribute and receive electronic
pedigrees, and verify and validate the delivery and receipt of
dangerous drugs against those pedigrees at the unit level, in a
manner that maintains the integrity of the pedigree system without an
unacceptable increase in the risk of diversion or counterfeiting.
(b) To meet this goal, and to facilitate efficiency and safety in
the distribution chain, the board shall, by regulation, define the
circumstances under which participants in the distribution chain may
infer the contents of a case, pallet, or other aggregate of
individual units, packages, or containers of dangerous drugs, from a
unique identifier associated with the case, pallet, or other
aggregate, without opening each case, pallet, or other aggregate or
otherwise individually validating each unit.
(c) Manufacturers, wholesalers, and pharmacies opting to employ
the use of inference as authorized by the board to comply with the
pedigree requirements shall document their processes and procedures
in their standard operating procedures (SOPs) and shall make those
SOPs available for board review.
(d) SOPs regarding inference shall include a process for
statistically sampling the accuracy of information sent with inbound
product.
(e) Liability associated with accuracy of product information and
pedigree using inference shall be specified in the board's
regulations.
4163.4. (a) All units of dangerous drug in the possession of a
wholesaler or pharmacy, for which the manufacturer does not hold
legal title on the effective date of the pedigree requirement set
forth in Section 4163.5, shall not be subject to the pedigree
requirements set forth in Sections 4034 and 4163. However, if any
units of those drugs are subsequently returned to the manufacturer,
they shall be subject to the pedigree requirements if the
manufacturer distributes those units in California.
(b) All units of dangerous drug manufactured in California but
distributed outside the state for dispensing outside the state shall
not be subject to the pedigree requirements set forth in Sections
4034 and 4163 at either the time of initial distribution or in the
event that any of those units are subsequently returned to the
manufacturer.
4163.5. (a) The Legislature hereby finds and declares that:
(1) The electronic pedigree system required by Sections 4034 and
4163 will provide tremendous benefits to the public and to all
participants in the distribution chain. Those benefits should be made
available as quickly as possible through the full cooperation of
prescription drug supply chain participants. To this end, all drug
manufacturers and repackagers are strongly encouraged to serialize
drug products and initiate electronic pedigrees as soon as possible,
and all participants in the supply chain are encouraged to
immediately ready themselves to receive and pass electronic
pedigrees.
(2) At the same time, it is recognized that the process of
implementing serialized electronic pedigree for all prescription
drugs in the entire chain of distribution is a complicated
technological and logistical undertaking for manufacturers,
wholesalers, repackagers, pharmacies, and other supply chain
participants. The Legislature seeks to ensure continued availability
of prescription drugs in California while participants implement
these requirements.
(b) Before January 1, 2015, each manufacturer of a dangerous drug
distributed in California shall designate those dangerous drugs
representing a minimum of 50 percent of its drugs, generic or single
source, distributed in California, for which it is listed as the
manufacturer by the federal Food and Drug Administration, which shall
be the subject of its initial phase of compliance with the January
1, 2015, deadline of the state's serialized electronic pedigree
requirements set forth in Sections 4034 and 4163. Each manufacturer
shall notify the Board of Pharmacy of the drugs so designated and the
measure or measures used in designating its drugs to be serialized,
and shall include in the notification the technology to be used to
meet the serialized electronic pedigree requirements. The
notification process for these specific actions may be specified by
the board.
(c) Before January 1, 2016, each manufacturer of a dangerous drug
distributed in California shall designate the final 50 percent of its
drugs, generic or single source, distributed in California for which
it is listed as the manufacturer by the federal Food and Drug
Administration that are subject to the state's serialized electronic
pedigree requirements set forth in Sections 4034 and 4163, which
shall comply with the state's serialized electronic pedigree
requirement by January 1, 2016. Each manufacturer shall notify the
Board of Pharmacy of the drugs so designated and the measure or
measures used in designating its drugs to be serialized, and shall
include in the notification the technology to be used to meet the
serialized electronic pedigree requirements. The notification process
for these specific actions may be specified by the board.
(d) For purposes of designating drugs to be serialized as required
by subdivisions (b) and (c), manufacturers shall select from any of
the following measures:
(1) Unit volume.
(2) Product package (SKU) type.
(3) Drug product family.
(e) Drugs not subject to compliance with the pedigree requirements
set forth in Sections 4034 and 4163 under this section shall not be
subject to the provisions of subdivisions (c), (d), (e), and (f) of
Section 4163.
4164. (a) A wholesaler licensed by the board that distributes
controlled substances, dangerous drugs, or dangerous devices within
or into this state shall report to the board all sales of dangerous
drugs and controlled substances that are subject to abuse, as
determined by the board.
(b) Each wholesaler shall develop and maintain a system for
tracking individual sales of dangerous drugs at preferential or
contract prices to pharmacies that primarily or solely dispense
prescription drugs to patients of long-term care facilities. The
system shall be capable of identifying purchases of any dangerous
drug at preferential or contract prices by customers that vary
significantly from prior ordering patterns for the same customer,
including by identifying purchases in the preceding 12 calendar
months by that customer or similar customers and identifying current
purchases that exceed prior purchases by either that customer or
similar customers by a factor of 20 percent. Each wholesaler shall
have the tracking system required by this subdivision in place no
later than January 1, 2006.
(c) Upon written, oral, or electronic request by the board, a
wholesaler shall furnish data tracked pursuant to subdivision (b) to
the board in written, hardcopy, or electronic form. The board shall
specify the dangerous drugs, the customers, or both the dangerous
drugs and customers for which data are to be furnished, and the
wholesaler shall have 30 calendar days to comply with the request.
(d) As used in this section, "preferential or contract prices"
means and refers to purchases by contract of dangerous drugs at
prices below the market wholesale price for those drugs.
(e) This section shall become operative on January 1, 2006.
4165. A wholesaler licensed by the board who sells or transfers any
dangerous drug or dangerous device into this state or who receives,
by sale or otherwise, any dangerous drug or dangerous device from any
person in this state shall, on request, furnish an authorized
officer of the law with all records or other documentation of that
sale or transfer.
4166. (a) Any wholesaler that uses the services of any carrier,
including, but not limited to, the United States Postal Service or
any common carrier, shall be liable for the security and integrity of
any dangerous drugs or dangerous devices through that carrier until
the drugs or devices are delivered to the transferee at its
board-licensed premises.
(b) Nothing in this section is intended to affect the liability of
a wholesaler or other distributor for dangerous drugs or dangerous
devices after their delivery to the transferee.
4167. A wholesaler shall not obtain, by purchase or otherwise, any
dangerous drugs or dangerous devices that it cannot maintain, in a
secure manner, on the premises licensed by the board.
4168. A county or municipality may not issue a business license for
any establishment that requires a wholesaler license unless the
establishment possesses a current wholesaler license issued by the
board. For purposes of this section, an "establishment" is the
licensee's physical location in California.
4169. (a) A person or entity may not do any of the following:
(1) Purchase, trade, sell, or transfer dangerous drugs or
dangerous devices at wholesale with a person or entity that is not
licensed with the board as a wholesaler or pharmacy.
(2) Purchase, trade, sell, or transfer dangerous drugs that the
person knew or reasonably should have known were adulterated, as set
forth in Article 2 (commencing with Section 111250) of Chapter 6 of
Part 5 of Division 104 of the Health and Safety Code.
(3) Purchase, trade, sell, or transfer dangerous drugs that the
person knew or reasonably should have known were misbranded, as
defined in Section 111335 of the Health and Safety Code.
(4) Purchase, trade, sell, or transfer dangerous drugs or
dangerous devices after the beyond use date on the label.
(5) Fail to maintain records of the acquisition or disposition of
dangerous drugs or dangerous devices for at least three years.
(b) Notwithstanding any other provision of law, a violation of
this section or of subdivision (c) or (d) of Section 4163 may subject
the person or entity that has committed the violation to a fine not
to exceed the amount specified in Section 125.9 for each occurrence,
pursuant to a citation issued by the board.
(c) Amounts due from any person under this section shall be offset
as provided under Section 12419.5 of the Government Code. Amounts
received by the board under this section shall be deposited into the
Pharmacy Board Contingent Fund.
(d) This section shall not apply to a pharmaceutical manufacturer
licensed by the Food and Drug Administration or by the State
Department of Public Health.