CHAPTER 14. WHOLESALE LEGEND DRUG DISTRIBUTORS

IC 25-26-14
     Chapter 14. Wholesale Legend Drug Distributors

IC 25-26-14-1
Application of chapter
    
Sec. 1. (a) This chapter applies to any individual, partnership, limited liability company, corporation, or business firm:
        (1) located in or outside Indiana; and
        (2) engaging in the wholesale distribution of legend drugs in Indiana.
    (b) Except as required by federal law or regulation, the requirements of this chapter do not apply to a manufacturer that is approved by the federal Food and Drug Administration. However, the board may adopt rules concerning manufacturers that the board considers appropriate and necessary.
    (c) The requirements of this chapter do not apply to a medical gas manufacturer or distributor that only manufactures or distributes medical gases.
As added by P.L.182-1991, SEC.3. Amended by P.L.8-1993, SEC.394; P.L.212-2005, SEC.23; P.L.98-2006, SEC.12.

IC 25-26-14-1.5
"Adulterated" defined
    
Sec. 1.5. As used in this chapter, "adulterated" refers to a legend drug that:
        (1) consists in whole or in part of a filthy, putrid, or decomposed substance;
        (2) has been produced, prepared, packed, or held under unsanitary conditions and may have been contaminated or rendered injurious to health;
        (3) has been subjected to conditions in the manufacture, processing, packing, or holding of the legend drug that do not conform to current standards of manufacturing to ensure that the legend drug is safe for use and possesses the identity, strength, quality, and purity characteristics that the legend drug is represented to possess;
        (4) is contained in a container composed of a poisonous or deleterious substance that may render the legend drug injurious to health;
        (5) bears or contains, for purposes of coloring only, a color additive that is unsafe;
        (6) is of a different strength, quality, or purity from the official compendium standard for the legend drug; or
        (7) does not meet the considerations of the federal Food, Drug, and Cosmetic Act.
As added by P.L.212-2005, SEC.24.

IC 25-26-14-1.7
"Authenticate" defined
    
Sec. 1.7. As used in this chapter, "authenticate" means to

affirmatively verify before distribution occurs that each transaction that is listed on:
        (1) the pedigree of a legend drug; and
        (2) other accompanying documentation for a legend drug;
has occurred.
As added by P.L.212-2005, SEC.25.

IC 25-26-14-1.8
"Authorized distributor" defined
    
Sec. 1.8. As used in this chapter, "authorized distributor" means a wholesale drug distributor with which a manufacturer has established an ongoing relationship to distribute the manufacturer's products. For purposes of this section, an ongoing relationship exists between a wholesale drug distributor, including any affiliated group (as defined in Section 1504 of the Internal Revenue Code) of which the wholesale distributor is a member, and a manufacturer if the wholesale drug distributor:
        (1) has a written agreement currently in effect with the manufacturer evidencing an ongoing relationship;
        (2) is listed on the manufacturer's current monthly updated list of authorized distributors; or
        (3) has a verifiable account with the manufacturer and a minimal transaction or volume requirement limit of:
            (A) five thousand (5,000) units per company in the previous twelve (12) months; or
            (B) twelve (12) purchases at the manufacturer's minimum purchasing requirement per invoice in the previous twelve (12) months.
As added by P.L.212-2005, SEC.26.

IC 25-26-14-2
"Blood" defined
    
Sec. 2. As used in this chapter, "blood" means whole blood collected from a single donor and processed either for transfusion or further manufacturing.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-3
"Blood component" defined
    
Sec. 3. As used in this chapter, "blood component" means that part of blood separated by physical or mechanical means.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-3.7
"Chain drug warehouse" defined
    
Sec. 3.7. As used in this chapter, "chain drug warehouse" means a permanent physical location for drugs or devices, or both, that:
        (1) is licensed as a wholesale distributor;
        (2) acts as a central warehouse; and
        (3) primarily performs intracompany sales and transfers of

legend drugs or devices to members of the same affiliated group that is under common ownership and control.
As added by P.L.98-2006, SEC.13.

IC 25-26-14-4
"Board" defined
    
Sec. 4. As used in this chapter, "board" refers to the Indiana board of pharmacy established under IC 25-26-13-3.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-4.1
"Co-licensed products" defined
    
Sec. 4.1. As used in this chapter, "co-licensed products" means pharmaceutical products:
        (1) that have been approved by the federal Food and Drug Administration; and
        (2) concerning which two (2) or more parties have the right to engage in a business activity or occupation concerning the pharmaceutical products.
As added by P.L.212-2005, SEC.27.

IC 25-26-14-4.2
"Compendium" defined
    
Sec. 4.2. As used in this chapter, "compendium" refers to:
        (1) the United States Pharmacopoeia;
        (2) the Homeopathic Pharmacopoeia of the United States;
        (3) the National Formulary;
        (4) a drug approved by the federal Food and Drug Administration; or
        (5) a supplement to a document specified in subdivision (1), (2), or (3).
As added by P.L.212-2005, SEC.28.

IC 25-26-14-4.3
"Contraband" defined
    
Sec. 4.3. As used in this chapter, "contraband" refers to a legend drug:
        (1) that is counterfeit;
        (2) that is stolen;
        (3) that is misbranded;
        (4) that is obtained by fraud;
        (5) that is purchased by a nonprofit institution for the nonprofit institution's own use and placed in commerce in violation of the own use agreement for the legend drug;
        (6) for which a required pedigree does not exist; or
        (7) for which a pedigree in existence:
            (A) has been forged, counterfeited, or falsely created; or
            (B) contains any altered, false, or misrepresented information.
As added by P.L.212-2005, SEC.29.
IC 25-26-14-4.4
"Counterfeit" defined
    
Sec. 4.4. As used in this chapter, "counterfeit" refers to a legend drug, or the container, seal, or labeling of a legend drug, that, without authorization, bears the trademark, trade name, or other identifying mark or imprint of a manufacturer, processor, packer, or distributor other than the person that manufactured, processed, packed, or distributed the legend drug.
As added by P.L.212-2005, SEC.30.

IC 25-26-14-4.5
"Deliver" defined
    
Sec. 4.5. As used in this chapter, "deliver" means the actual, constructive, or attempted transfer of a legend drug from one (1) person to another.
As added by P.L.212-2005, SEC.31.

IC 25-26-14-4.6
"Designated representative" defined
    
Sec. 4.6. As used in this chapter, "designated representative" means an individual who:
        (1) is designated by a wholesale drug distributor;
        (2) serves as the wholesale drug distributor's responsible individual with the board; and
        (3) is actively involved in and aware of the actual daily operation of the wholesale drug distributor.
As added by P.L.212-2005, SEC.32.

IC 25-26-14-4.7
"Distribute" defined
    
Sec. 4.7. As used in this chapter, "distribute" means to sell, offer to sell, deliver, offer to deliver, broker, give away, or transfer a legend drug, whether by passage of title or physical movement, or both. The term does not include the following:
        (1) Dispensing or administering a legend drug.
        (2) Delivering or offering to deliver a legend drug by a common carrier in the usual course of business as a common carrier.
        (3) The provision of a legend drug sample to a patient by a:
            (A) practitioner;
            (B) health care professional acting at the direction and under the supervision of a practitioner; or
            (C) hospital's or other health care entity's pharmacy that received the drug sample in accordance with this chapter and other applicable law to administer or dispense and that is acting at the direction of a practitioner;
        licensed to prescribe the legend drug.
As added by P.L.212-2005, SEC.33.

IC 25-26-14-5
"Drug sample" defined      Sec. 5. As used in this chapter, "drug sample" means a unit of a legend drug that is not intended to be sold and is intended to promote the sale of the drug.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-6
"Health care entity" defined
    
Sec. 6. As used in this chapter, "health care entity" means any organization or business that provides diagnostic, medical, surgical, dental treatment, or rehabilitative care. The term does not include a pharmacy or wholesale drug distributor.
As added by P.L.182-1991, SEC.3. Amended by P.L.212-2005, SEC.34.

IC 25-26-14-6.5
"Label" defined
    
Sec. 6.5. As used in this chapter, "label" means a display of written, printed, or graphic matter on the immediate container of a legend drug.
As added by P.L.212-2005, SEC.35.

IC 25-26-14-6.6
"Labeling" defined
    
Sec. 6.6. As used in this chapter, "labeling" means labels and other written, printed, or graphic matter:
        (1) on a legend drug or a legend drug's container or wrapper; or
        (2) accompanying a legend drug.
As added by P.L.212-2005, SEC.36.

IC 25-26-14-7
"Legend drug" defined
    
Sec. 7. As used in this chapter, "legend drug" has the meaning set forth in IC 16-18-2-199. The term includes any human drug required by federal law or regulation to be dispensed only by a prescription, including finished dosage forms and active ingredients subject to 21 U.S.C. 811 through 812. The term does not include a device or a device component, part, or accessory.
As added by P.L.182-1991, SEC.3. Amended by P.L.2-1993, SEC.147; P.L.212-2005, SEC.37.

IC 25-26-14-8
"Manufacturer" defined
    
Sec. 8. As used in this chapter, "manufacturer" means a person who is engaged in manufacturing, preparing, propagating, compounding, processing, packaging, repackaging, or labeling of a legend drug.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-8.3
"Misbranded" defined      Sec. 8.3. As used in this chapter, "misbranded" means that a legend drug's label:
        (1) is false or misleading;
        (2) does not bear the name and address of the manufacturer, packer, or distributor or does not contain an accurate statement of the quantities of active ingredients of the legend drug;
        (3) does not show an accurate monograph for the legend drug; or
        (4) does not comply with any other requirements of the federal Food, Drug, and Cosmetic Act.
As added by P.L.212-2005, SEC.38.

IC 25-26-14-8.5
"Normal distribution chain of custody" defined
    
Sec. 8.5. As used in this chapter, "normal distribution chain of custody" means the route that a legend drug travels:
        (1) from a manufacturer to a wholesale drug distributor, to a pharmacy, and to a patient or a patient's agent;
        (2) from a manufacturer to a wholesale drug distributor, to a chain drug warehouse, to a pharmacy affiliated with the chain drug warehouse, and to a patient or a patient's agent;
        (3) from a manufacturer to a chain drug warehouse, to a pharmacy affiliated with the chain drug warehouse, and to a patient or a patient's agent;
        (4) from a manufacturer to a third party logistics provider, to a wholesale drug distributor, to a pharmacy, and to a patient or a patient's agent;
        (5) from a manufacturer to a third party logistics provider, to a wholesale drug distributor, to a chain drug warehouse, to a pharmacy affiliated with the chain drug warehouse, and to a patient or a patient's agent;
        (6) from a manufacturer to a third party logistics provider, to a chain drug warehouse, to a pharmacy affiliated with the chain drug warehouse, and to a patient or a patient's agent; or
        (7) as prescribed by rules adopted by the board.
As added by P.L.212-2005, SEC.39.

IC 25-26-14-8.7
"Pedigree" defined
    
Sec. 8.7. As used in this chapter, "pedigree" means a statement or record in a written or an electronic form that is approved by the board, that:
        (1) records each wholesale distribution of a legend drug from the sale by the manufacturer that leaves the normal distribution chain of custody and that includes information designated by the board through rules for each transaction; or
        (2) complies with a legend drug pedigree law or regulation in another state or United States territory that meets the pedigree requirements under this chapter.
As added by P.L.212-2005, SEC.40. Amended by P.L.98-2006,

SEC.14.

IC 25-26-14-9
"Person" defined
    
Sec. 9. As used in this chapter, "person" means an individual, a partnership, a business firm, a limited liability company, a corporation, or another entity, including a governmental entity.
As added by P.L.182-1991, SEC.3. Amended by P.L.8-1993, SEC.395; P.L.212-2005, SEC.41.

IC 25-26-14-9.2
"Practitioner" defined
    
Sec. 9.2. As used in this chapter, "practitioner" has the meaning set forth in IC 16-42-19-5.
As added by P.L.212-2005, SEC.42.

IC 25-26-14-9.3
"Repackage" defined
    
Sec. 9.3. As used in this chapter, "repackage" means changing the container, wrapper, quantity, or labeling of a legend drug to further the distribution of the legend drug.
As added by P.L.212-2005, SEC.43.

IC 25-26-14-10
"Sale" defined
    
Sec. 10. As used in this chapter, "sale" includes purchase, trade, or offer to sell, purchase, or trade.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-10.5
"Third party logistics provider" defined
    
Sec. 10.5. As used in this chapter, "third party logistics provider" means an entity that:
        (1) provides or coordinates warehousing, distribution, or other services on behalf of a manufacturer, but does not take title to the legend drug or have general responsibility to direct the legend drug's sale or disposition; and
        (2) is licensed under this chapter.
As added by P.L.212-2005, SEC.44.

IC 25-26-14-11
"Wholesale distribution" defined
    
Sec. 11. As used in this chapter, "wholesale distribution" means to distribute legend drugs to persons other than a consumer or patient. The term does not include:
        (1) a sale or transfer between a division, a subsidiary, a parent, an affiliated, or a related company under the common ownership and control of a corporate entity;
        (2) the purchase or acquisition by a hospital or other health care entity that is a member of a group purchasing organization of a

drug for the hospital's or health care entity's own use from the group purchasing organization or from other hospitals or health care entities that are members of the organization;
        (3) the sale of a drug by a charitable organization described in Section 501(c)(3) of the Internal Revenue Code, to a nonprofit affiliate of the organization to the extent otherwise permitted by law;
        (4) the sale of a drug among hospitals or other health care entities that are under common control;
        (5) the sale of a drug for emergency medical reasons, including transfers of legend drugs by a retail pharmacy to another retail pharmacy to alleviate a temporary shortage, if the gross dollar value of the transfers does not exceed five percent (5%) of the total legend drug sales revenue of either the transferor or transferee pharmacy during any twelve (12) consecutive month period;
        (6) the sale of a drug or the dispensing of a drug pursuant to a prescription;
        (7) the distribution of drug samples by manufacturers' representatives or distributors' representatives;
        (8) the sale of blood and blood components intended for transfusion;
        (9) the sale of a drug by a retail pharmacy to a practitioner (as defined in IC 25-26-13-2) for office use, if the gross dollar value of the transfers does not exceed five percent (5%) of the retail pharmacy's total legend drug sales during any twelve (12) consecutive months;
        (10) the sale of a drug by a retail pharmacy that is ending its business and liquidating its inventory to another retail pharmacy;
        (11) drug returns by a hospital, health care entity, or charitable institution conducted under 21 CFR 203.23;
        (12) the sale of minimal quantities of drugs by retail pharmacies to licensed practitioners for office use;
        (13) the distribution of prescription drugs by the original manufacturer of the finished form of the prescription drug or the distribution of the co-licensed products by a partner of the original manufacturer of the finished form of the prescription drug; or
        (14) drug returns that meet criteria established by rules adopted by the board.
As added by P.L.182-1991, SEC.3. Amended by P.L.33-1993, SEC.47; P.L.212-2005, SEC.45.

IC 25-26-14-12
"Wholesale drug distributor" defined
    
Sec. 12. As used in this chapter, "wholesale drug distributor" means a person engaged in wholesale distribution of legend drugs, including:
        (1) manufacturers;         (2) repackers;
        (3) own-label distributors;
        (4) private-label distributors;
        (5) jobbers;
        (6) brokers;
        (7) warehouses, including manufacturers' and distributors' warehouses, chain drug warehouses, and wholesale drug warehouses;
        (8) independent wholesale drug traders;
        (9) retail and hospital pharmacies that conduct wholesale distributions; and
        (10) reverse distributors.
The term does not include a common carrier or person hired solely to transport prescription drugs.
As added by P.L.182-1991, SEC.3. Amended by P.L.98-2006, SEC.15.

IC 25-26-14-13
Rules
    
Sec. 13. The board shall adopt rules under IC 4-22-2 that conform with wholesale drug distributor licensing guidelines adopted by the United States Food and Drug Administration (21 CFR 205), including rules:
        (1) necessary to carry out the purposes of this chapter;
        (2) that incorporate and set detailed standards for meeting each of the license prerequisites set forth in this chapter; and
        (3) establishing reasonable fees to carry out this chapter.
As added by P.L.182-1991, SEC.3.

IC 25-26-14-14
Accreditation and license for wholesale distribution of legend drugs
    
Sec. 14. (a) A person may not engage in wholesale distributions of legend drugs without:
        (1) after December 31, 2005, obtaining and maintaining accreditation or certification from the National Association of Boards of Pharmacy's Verified Accredited Wholesale Distributor or an accreditation body approved by the board under subsection (g);
        (2) obtaining and maintaining a license issued by the board; and
        (3) paying any reasonable fee required by the board.
    (b) The board may not issue or renew the license of a wholesale drug distributor that does not comply with this chapter.
    (c) The board shall require a separate license for each facility or location where wholesale distribution operations are conducted.
    (d) An agent or employee of any licensed wholesale drug distributor does not need a license and may lawfully possess pharmaceutical drugs when acting in the usual course of business or employment.
    (e) The issuance of a license under this chapter does not affect tax

liability imposed by the department of state revenue or the department of local government finance on any wholesale drug distributor.
    (f) The board may adopt rules that permit out-of-state wholesale drug distributors to obtain a license on the basis of reciprocity if:
        (1) an out-of-state wholesale drug distributor possesses a valid license granted by another state and the legal standards for licensure in the other state are comparable to the standards under this chapter; and
        (2) the other state extends reciprocity to wholesale drug distributors licensed in Indiana.
However, if the requirements for licensure under this chapter are more restrictive than the standards of the other state, the out-of-state wholesale drug distributor must comply with the additional requirements of this chapter to obtain a license under this chapter.
    (g) The board may adopt rules under IC 4-22-2 to approve an accreditation body to:
        (1) evaluate a wholesale drug distributor's operations to determine compliance with:
            (A) professional standards;
            (B) this chapter; and
            (C) any other applicable law; and
        (2) perform inspections of each facility and location where wholesale distribution operations are conducted by the wholesale drug distributor.
As added by P.L.182-1991, SEC.3. Amended by P.L.90-2002, SEC.456; P.L.212-2005, SEC.46.

IC 25-26-14-14.5
Pedigree required
    
Sec. 14.5. After June 30, 2006, a wholesale drug distributor may not accept or deliver a legend drug without a current, accompanying pedigree as required under section 17 of this chapter.
As added by P.L.212-2005, SEC.47. Amended by P.L.98-2006, SEC.16.

IC 25-26-14-15
Information for grant and renewal of license; surety bond; inspection; reporting change in information
    
Sec. 15. (a) The board shall require the following minimum information from each wholesale drug distributor as part of the license described in section 14 of this chapter and as part of any renewal of such license:
        (1) The name, full business address, and telephone number of the licensee.
        (2) All trade or business names used by the licensee.
        (3) Addresses, telephone numbers, and the names of contact persons for all facilities used by the licensee for the storage, handling, and distribution of legend drugs.
        (4) The type of ownership of operation.         (5) The name of each owner and operator of the licensee, including:
            (A) if an individual, the name, address, Social Security number, and date of birth of the individual;
            (B) if a partnership, the name, address, Social Security number, and date of birth of each partner, and the name of the partnership and federal employer identification number;
            (C) if a corporation:
                (i) the name, address, Social Security number, date of birth, and title of each corporate officer and director;
                (ii) the corporate names, the name of the state of incorporation, the federal employer identification number, and the name of the parent company, if any; and
                (iii) the name, address, and Social Security number of each shareholder owning ten percent (10%) or more of the voting stock of the corporation, unless the stock is traded on a major stock exchange and not traded over the counter;
            (D) if a limited liability company, the name of each manager and member, the name and federal employer identification number of the limited liability company, and the name of the state where organized; and
            (E) if a sole proprietorship, the full name, address, Social Security number, and date of birth of the sole proprietor and the name and federal employer identification number of the business entity.
        (6) The name, address, and telephone number of the designated representative of each facility.
        (7) Additional information concerning record keeping required under this chapter.
    (b) The board shall require a wholesale drug distributor to post a surety bond of at least one hundred thousand dollars ($100,000), or an equivalent means of security acceptable to the board, including insurance, an irrevocable letter of credit, or funds deposited in a trust account or financial institution, to secure payment of any administrative penalties that may be imposed by the board and any fees and costs that may be incurred by the board and that:
        (1) are related to a license held by the wholesale drug distributor;
        (2) are authorized under Indiana law; and
        (3) the wholesale drug distributor fails to pay less than thirty (30) days after the penalties, fees, or costs become final.
However, a separate surety bond or an equivalent means of security is not required for a separate location or a company of the wholesale drug distributor.
    (c) The board may make a claim against a bond or security posted under subsection (b) within one (1) year after the wholesale drug distributor's license is no longer valid or sixty (60) days after the conclusion of:
        (1) an administrative or legal proceeding before or on behalf of the board that involves the wholesale drug distributor and

results in penalties, fees, or costs described in subsection (b); or
        (2) an appeal of a proceeding described in subdivision (1);
whichever occurs later.
    (d) The board or the board's designee shall inspect each facility where wholesale distribution operations are conducted before initial licensure and periodically thereafter in accordance with a schedule determined by the board, but at least one (1) time in each three (3) year period.
    (e) A wholesale drug distributor must publicly display or have readily available all licenses and the most recent inspection report administered by the board or the board's designee.
    (f) A material change in any information in this section must be submitted to the board at the time of license renewal or within thirty (30) days from the date of the change, whichever occurs first.
As added by P.L.182-1991, SEC.3. Amended by P.L.8-1993, SEC.396; P.L.212-2005, SEC.48; P.L.98-2006, SEC.17.

IC 25-26-14-15.5
Repealed
    
(Repealed by P.L.98-2006, SEC.29.)

IC 25-26-14-16
Distributor qualifications; criminal history and financial background check
    
Sec. 16. (a) In reviewing, for purposes of licensure or renewal of a license under this chapter, the qualifications of persons who engage in wholesale distribution of legend drugs in Indiana, the board shall consider the following factors:
        (1) A finding by the board that the applicant has:
            (A) violated a law; or
            (B) been disciplined by a regulatory agency for violating a law;
        related to drug distribution in any state.
        (2) A criminal conviction of the applicant.
        (3) The applicant's past experience in the manufacture or distribution of legend drugs, including controlled substances.
        (4) The furnishing by the applicant of false or fraudulent material in any application made in connection with drug manufacturing or distribution.
        (5) Suspension or revocation of any license held by the applicant or the applicant's owner or the imposition of sanctions against the applicant or the applicant's owner by the federal or a state or local government for the manufacture or distribution of any drugs, including controlled substances.
        (6) Compliance with licensing requirements under previously granted licenses.
        (7) Compliance with requirements to maintain and make available to the board or to federal, state, or local law enforcement officials those records required under this chapter.
        (8) Any other factors or qualifications the board considers

relevant to the public health and safety, including whether the granting of the license would not be in the public interest.
    (b) In reviewing an application for licensure or renewal of a license under this chapter, the board shall consider the results of criminal history and financial background checks for:
        (1) the designated representative or the most senior individual responsible for facility operations, purchasing, and inventory control;
        (2) the supervisor or the designated representative or the most senior individual under subdivision (1); and
        (3) principals and owners with more than a ten percent (10%) interest in the wholesale drug distributor, if the wholesale drug distributor is a nonpublicly held company.
    (c) The criminal history and financial background checks conducted under subsection (b) must:
        (1) be conducted at the applicant's expense;
        (2) include a criminal history for all current and previous states of residence of the applicant;
        (3) include the criminal history in the federal district where the applicant currently resides;
        (4) include information from the previous seven (7) years; and
        (5) be approved by the board.
    (d) An applicant shall provide and attest to:
        (1) an affirmation that the applicant has not been involved in or convicted of any criminal or prohibited acts; or
        (2) a statement providing a complete disclosure of the applicant's past criminal convictions and violations of state and federal laws;
regarding drugs.
As added by P.L.182-1991, SEC.3. Amended by P.L.212-2005, SEC.50; P.L.98-2006, SEC.18.

IC 25-26-14-16.5
Designated representative; application; experience requirement; continuing education
    
Sec. 16.5. (a) A wholesale drug distributor shall designate in writing on a form prescribed by the board a designated representative for each of the wholesale drug distributor's facilities licensed under this chapter.
    (b) A designated representative shall submit to the board an application prescribed by the board and provide to the board the following:
        (1) The date and place of birth of the designated representative.
        (2) A list of the occupations, positions of employment, and offices held by the designated representative during the immediately preceding seven (7) years, including the principal business and address of the organization with which the occupation, position, or office was associated.
        (3) A statement concerning whether the designated representative, during the immediately preceding seven (7)

years, has been temporarily or permanently enjoined by a court from violating a state or federal law regulating the possession, control, or distribution of legend drugs, including details of related events.
        (4) A description of any involvement by the designated representative with a business that:
            (A) manufactured, administered, prescribed, distributed, or stored legend drugs; and
            (B) was named as a party in a lawsuit;
        during the immediately preceding seven (7) years, including investments other than the ownership of stock in a publicly traded company or mutual fund.
        (5) A description of any criminal offense of which the designated representative has been convicted, regardless of whether adjudication of guilt was withheld or whether the designated representative pleaded nolo contendere. If the designated representative indicates that a criminal conviction is under appeal, the designated representative shall submit to the board:
            (A) a copy of the notice of appeal; and
            (B) a copy of the final written order of disposition.
        (6) A photograph of the designated representative taken within the immediately preceding thirty (30) days under procedures specified by the board.
        (7) A list of the name, address, occupation, and date and place of birth of each member of the designated representative's immediate family, including the designated representative's spouse, children, parents, and siblings, and the spouses of the designated representative's children and siblings. Information collected under this subdivision is confidential.
        (8) Any other information required by the board.
    (c) A designated representative must have at least two (2) years of verifiable full-time managerial or supervisory experience in a pharmacy or with a wholesale drug distributor licensed under this chapter or in another state. The designated representative's responsibilities must have included record keeping, storage, and shipment of legend drugs.
    (d) A designated representative shall not serve as the designated representative for more than one (1) wholesale drug distributor facility at any one (1) time.
    (e) A designated representative shall be actively involved and aware of the actual daily operations of the wholesale drug distributor as follows:
        (1) Be employed full time in a managerial position by the wholesale drug distributor.
        (2) Be physically present at the wholesale drug distributor's facility during normal business hours, except when absent due to illness, family illness or death, scheduled vacation, or another authorized absence.
        (3) Be aware of and knowledgeable about all policies and

procedures pertaining to the operations of the wholesale drug distributor.
    (f) A designated representative must complete continuing education programs specified by the board regarding state and federal law relevant to the distribution, handling, and storage of legend drugs.
    (g) A third party logistics provider must comply with this subsection until the third party logistics provider has obtained accreditation. A third party logistics provider must identify to the board a designated representative who is responsible for the facility's compliance with applicable state and federal law. The designated representative:
        (1) may be a corporate employee or officer, outside counsel, or an outside consulting specialist with authority to help ensure compliance;
        (2) may be responsible for multiple facilities; and
        (3) is not required to be physically present at the facility.
As added by P.L.212-2005, SEC.51. Amended by P.L.98-2006, SEC.19.

IC 25-26-14-16.6
Designated agent; service of process
    
Sec. 16.6. (a) A wholesale drug distributor that:
        (1) is licensed under this chapter;
        (2) is located outside Indiana; and
        (3) distributes legend drugs in Indiana;
shall designate an agent in Indiana for service of process.
    (b) A wholesale drug distributor that does not designate an agent under subsection (a) is considered to have designated the secretary of state to be the wholesale drug distributor's true and lawful attorney, upon whom legal process may be served in an action or a proceeding against the wholesale drug distributor arising from the wholesale drug distributor's wholesale distribution operations.
    (c) The board shall mail a copy of any service of process to a wholesale drug distributor by certified mail, return receipt requested, postage prepaid, at the address designated by the wholesale drug distributor on the application for licensure submitted under this chapter.
    (d) Service of process on the secretary of state is sufficient in an action or a proceeding against a wholesale drug distributor that is not licensed under this chapter.
As added by P.L.212-2005, SEC.52.

IC 25-26-14-17
Applicant assurances as condition of license
    
Sec. 17. As a condition for receiving and retaining a wholesale drug distributor license issued under this chapter, an applicant must satisfy the board that the applicant has and will continuously maintain the following:
        (1) Acceptable storage and handling conditions and facilities

standards for each facility at which legend drugs are received, stored, warehoused, handled, held, offered, marketed, or displayed, or from which legend drugs are transported, including:
            (A) suitable construction of the facility and appropriate monitoring equipment to ensure that legend drugs in the facility are maintained in accordance with labeling or in compliance with official compendium standards;
            (B) suitable size and construction to facilitate cleaning, maintenance, and proper wholesale distribution operations;
            (C) adequate storage areas to provide appropriate lighting, ventilation, temperature, sanitation, humidity, space, equipment, and security conditions;
            (D) a quarantine area for separate storage of legend drugs that are outdated, damaged, deteriorated, misbranded, adulterated, counterfeit, suspected counterfeit, otherwise unfit for distribution, or contained in immediate or sealed secondary containers that have been opened;
            (E) maintenance of the facility in a clean and orderly condition;
            (F) maintenance of the facility in a commercial, nonresidential building; and
            (G) freedom of the facility from infestation.
        (2) Security of each facility from unauthorized entry as follows:
            (A) Entry into areas where legend drugs are held is limited to authorized personnel.
            (B) Each facility is equipped with a security system that includes:
                (i) an after hours central alarm or a comparable entry detection capability;
                (ii) restricted premises access;
                (iii) adequate outside perimeter lighting;
                (iv) safeguards against theft and diversion, including employee theft and theft or diversion facilitated or hidden by tampering with computers or electronic records; and
                (v) a means of protecting the integrity and confidentiality of data and documents and of making the data and documents readily available to the board and other state and federal law enforcement officials.
        (3) A reasonable system of record keeping as follows:
            (A) The system describes all the wholesale distributor's activities governed by this chapter for the three (3) year period after the disposition of each product, and all records are maintained for at least three (3) years after disposition of the legend drug to which the record applies.
            (B) The system is reasonably accessible as determined by board rules in any inspection authorized by the board.
            (C) The system provides a means to establish and maintain inventories and records of transactions regarding the receipt and distribution or other disposition of all legend drugs,

including the following:
                (i) For legend drugs manufactured by a manufacturer for which the wholesale drug distributor is an authorized distributor, a pedigree for each distributed legend drug that leaves the normal distribution chain of custody, as determined by rules adopted by the board.
                (ii) For legend drugs manufactured by a manufacturer for which the wholesale drug distributor is not an authorized distributor, a pedigree for each distributed legend drug that leaves the normal chain of custody.
                (iii) After January 1, 2007, and after consulting with the federal Food and Drug Administration, at the board's discretion, for each legend drug received and distributed by the wholesale drug distributor, an electronic pedigree developed in accordance with standards and requirements of the board to authenticate, track, and trace legend drugs. The standards and requirements of the board may indicate the information required to be part of the electronic pedigree.
                (iv) Dates of receipt and distribution or other disposition of the legend drugs by the wholesale drug distributor.
                (v) Availability for inspection and photocopying by any authorized official of a local, state, or federal governmental agency for three (3) years after the creation date of the inventories and records.
            (D) Onsite electronic inventories and records are immediately available for inspection, and records kept at a central location apart from the inspection site and not electronically retrievable are available for inspection within two (2) working days after a request by an authorized official of a local, state, or federal governmental agency.
            (E) The system maintains an ongoing list of persons with whom the wholesale drug distributor does business.
            (F) The system provides for reporting counterfeit or suspected counterfeit legend drugs or counterfeiting or suspected counterfeiting activities to the board and the federal Food and Drug Administration.
            (G) The system provides for mandatory reporting of significant shortages or losses of legend drugs to the board and the federal Food and Drug Administration, if applicable, if diversion is known or suspected.
        (4) Written policies and procedures to which the wholesale drug distributor adheres for the receipt, security, storage, inventory, transport, shipping, and distribution of legend drugs, and that assure reasonable wholesale distributor preparation for, protection against, and handling of any facility security or operation problems, including the following:
            (A) Facility security or operation problems caused by natural disaster or government emergency.
            (B) Correction of inventory inaccuracies.             (C) Product shipping and receiving problems.
            (D) Quarantine and return to the manufacturer or destruction in accordance with state and federal law of all outdated products and outdated or expired legend drugs, including appropriate documentation and witnessing.
            (E) Appropriate disposition of returned goods.
            (F) Product recalls.
            (G) Identifying, recording, and reporting losses or thefts.
            (H) Recalls and withdrawals of legend drugs due to:
                (i) an action initiated by the federal Food and Drug Administration or another federal, state, or local governmental agency;
                (ii) a volunteer action by the manufacturer to remove defective or potentially defective legend drugs from the market; or
                (iii) an action undertaken to promote public health and safety by replacing existing merchandise with an improved product or a new package design.
            (I) Disposition and destruction of containers, labels, and packaging to ensure that the containers, labels, and packaging are not used in counterfeiting activities, including necessary documentation and witnessing in accordance with state and federal law.
            (J) Investigation of discrepancies in the inventory involving counterfeit, suspected counterfeit, contraband, or suspected contraband legend drugs and reporting of discrepancies within three (3) business days to the board and any other appropriate state or federal governmental agency.
            (K) Reporting of criminal or suspected criminal activities involving the inventory of legend drugs to the board within three (3) business days.
            (L) Conducting for cause authentication as required under sections 17.2 and 17.8 of this chapter.
        (5) Written policies and procedures and sufficient inspection procedures for all incoming and outgoing product shipments, including the following:
            (A) Upon receipt, visual examination of each shipping container in a manner adequate to identify the legend drugs in the container and to determine whether the legend drugs may be outdated, adulterated, misbranded, contaminated, contraband, counterfeit, suspected counterfeit, damaged, or otherwise unfit for distribution.
            (B) Upon receipt, review of records by the wholesale drug distributor for the acquisition of legend drugs for accuracy and completeness, considering the:
                (i) total facts and circumstances surrounding each transaction involving the legend drugs; and
                (ii) wholesale drug distributors involved.
            (C) Quarantine of a legend drug considered to be outdated, adulterated, misbranded, contaminated, contraband,

counterfeit, suspected counterfeit, damaged, or otherwise unfit for distribution until:
                (i) examination and a determination that the legend drug is not outdated, adulterated, misbranded, contaminated, contraband, counterfeit, damaged, or otherwise unfit for distribution; or
                (ii) the legend drug is destroyed or returned to the manufacturer or wholesale drug distributor from which the legend drug was acquired.
            (D) Written policies and procedures to ensure that if the wholesale drug distributor determines that a legend drug is adulterated, misbranded, counterfeit, or suspected counterfeit, the wholesale drug distributor provides notice of the adulteration, misbranding, counterfeiting, or suspected counterfeiting to the board, the federal Food and Drug Administration, and the manufacturer or wholesale drug distributor from which the legend drug was acquired within three (3) business days.
            (E) Written policies and procedures to ensure that if the immediate or sealed outer or secondary container or labeling of a legend drug is adulterated, misbranded, counterfeit, or suspected counterfeit, the wholesale drug distributor:
                (i) quarantines the legend drug until the legend drug is destroyed or returned to the manufacturer or wholesale drug distributor from which the legend drug was acquired; and
                (ii) provides notice of the adulteration, misbranding, counterfeiting, or suspected counterfeiting to the board, the federal Food and Drug Administration, and the manufacturer or wholesale drug distributor from which the legend drug was acquired within three (3) business days.
            (F) Written policies and procedures to ensure that a legend drug that has been opened or used, but is not adulterated, misbranded, counterfeit, or suspected counterfeit, is identified as such and quarantined until the legend drug is destroyed or returned to the manufacturer or wholesale drug distributor from which the legend drug was acquired.
            (G) Written policies and procedures to ensure that:
                (i) a legend drug that will be returned to a manufacturer or wholesale drug distributor is kept under proper conditions for storage, handling, transport, and shipment before the return; and
                (ii) documentation showing that proper conditions were maintained is provided to the manufacturer or wholesale drug distributor to which the legend drug is returned.
            (H) Inspection of each outgoing shipment for identity of the legend drugs and to ensure that the legend drugs have not been damaged in storage or held under improper conditions.
            (I) Written policies and procedures to ensure that if conditions under which a legend drug has been returned to

the wholesale drug distributor cast doubt on the legend drug's safety, identity, strength, quality, or purity, the legend drug is destroyed or returned to the manufacturer or wholesale drug distributor from which the legend drug was acquired unless examination, testing, or other investigation proves that the legend drug meets appropriate standards of safety, identity, strength, quality, and purity. In determining whether the conditions under which a legend drug has been returned cast doubt on the legend drug's safety, identity, strength, quality, or purity, the wholesale drug distributor considers the conditions under which the legend drug has been held, stored, or shipped before or during the legend drug's return and the condition of the legend drug and the legend drug's container, carton, or labeling upon receipt of the returned legend drug.
            (J) Written policies and procedures to ensure that contraband, counterfeit, or suspected counterfeit legend drugs, other evidence of criminal activity, and accompanying documentation are retained until a disposition is authorized by the board and the federal Food and Drug Administration.
            (K) Written policies and procedures to ensure that any shipping, immediate, or sealed outer or secondary container or labeling, and accompanying documentation, suspected of or determined to be counterfeit or fraudulent, are retained until a disposition is authorized by the board and the federal Food and Drug Administration.
        (6) Operations in compliance with all federal legal requirements applicable to wholesale drug distribution.
        (7) Written policies and procedures to provide for the secure and confidential storage of information with restricted access and to protect the integrity and confidentiality of the information.
        (8) A pedigree as required under this chapter, including an electronic pedigree developed in accordance with standards and requirements of the board under subdivision (3)(C)(iii).
        (9) Appropriate inventory management and control systems to:
            (A) prevent; and
            (B) allow detection and documentation of;
        theft, counterfeiting, or diversion of legend drugs.
        (10) If the wholesale drug distributor is involved in the distribution of controlled substances, registration with the federal Drug Enforcement Administration and the board and compliance with all laws related to the storage, handling, transport, shipment, and distribution of controlled substances.
        (11) Isolation of controlled substances from noncontrolled substances and storage of the controlled substances in a