43-15.1 Wholesale Drug Distributors
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<![CDATA[CHAPTER 43-15.1WHOLESALE DRUG DISTRIBUTORS43-15.1-01. Definitions. As used in this chapter:1."Board" means the state board of pharmacy.2."Manufacturer"meansanypersonengagedinmanufacturing,preparing,propagating, compounding, processing, packaging, repackaging, or labeling of a<br>prescription drug.3."Pharmacy distributor" means any pharmacy licensed in this state or hospital<br>pharmacy that is engaged in the delivery or distribution of prescription drugs either to<br>any other pharmacy licensed in this state or to any other person or entity, including a<br>wholesale drug distributor, engaged in the delivery or distribution of prescription<br>drugs and involved in the actual, constructive, or attempted transfer of a drug in this<br>state to other than the ultimate consumer, if the financial value of the drugs is<br>equivalent to at least five percent of the total gross sales of the pharmacy distributor.4."Prescription drug" means any drug required by federal or state law or regulation to<br>be dispensed only by a prescription, including finished dosage forms and active<br>ingredients subject to section 503(b) of the federal Food, Drug, and Cosmetic Act.5."Wholesale drug distribution" means sale of prescription drugs to persons other than<br>a consumer or patient. The term does not include:a.Intracompany sale, which is a sale between any division, subsidiary, parent, or<br>affiliated or related company under the common ownership and control of a<br>corporate entity.b.The purchase or other acquisition by a hospital pharmacy or other health care<br>entity that is a member of a group purchasing organization of a drug for its own<br>use from the group purchasing organization or from other hospital pharmacies<br>or health care entities that are members of such organizations.c.The sale, purchase, or trade of a drug, or an offer to sell, purchase, or trade a<br>drug, by a charitable organization described in section 501(c)(3) of the Internal<br>Revenue Code of 1954 to a nonprofit affiliate of the organization to the extent<br>otherwise permitted by law.d.The sale, purchase, or trade of a drug, or an offer to sell, purchase, or trade a<br>drug, among hospital pharmacies or other health care entities that are under<br>common control.e.The sale, purchase, or trade of a drug, or an offer to sell, purchase, or trade a<br>drug, for emergency medical reasons.f.The sale, purchase, or trade of a drug, an offer to sell, purchase, or trade a<br>drug, or the dispensing of a drug pursuant to a prescription.g.A transfer of prescription drugs by a retail pharmacy to another retail pharmacy<br>to alleviate a temporary shortage.h.A manufacturer or a manufacturer's sales representative or agent.6."Wholesale drug distributor" means any person engaged in the wholesale drug<br>distribution, including manufacturers; repackers; own-label distributors; jobbers;<br>brokers; warehouses, including manufacturers' and distributors' warehouses, chainPage No. 1drug warehouses, and wholesale drug warehouses; independent wholesale drug<br>traders;salesagents;prescriptiondrugrepackagers;physicians;dentists;veterinarians; birth control and other clinics; individuals; hospital pharmacies;<br>nursing home pharmacies or their providers; health maintenance organizations and<br>other health care providers; and retail and hospital pharmacies that conduct<br>wholesale distributions. The term does not include any common carrier or individual<br>hired solely to transport prescription drugs.43-15.1-02. Prohibited drug purchase or receipt - Penalty. No person may knowinglypurchase or receive any prescription drug from any source other than a wholesale drug<br>distributor, manufacturer, pharmacy distributor, pharmacy, or other person licensed pursuant to<br>the laws of this state except when otherwise provided. A person violating this section is guilty of<br>a class A misdemeanor. A second violation is a class C felony.43-15.1-03. Wholesale drug distributor advisory committee. The board shall appointa wholesale drug distributor advisory committee composed of three members. One member<br>must be a representative of a pharmacy and may be a pharmacy distributor, but may not be an<br>employee of the board. One member must be a representative of wholesale drug distributors.<br>One member must be a representative of drug manufacturers. In making appointments, the<br>board shall consider recommendations received from wholesale drug distributors, pharmacy<br>distributors, and drug manufacturers and shall adopt rules that provide for solicitation of such<br>recommendations.The advisory committee shall review and make recommendations to theboard on the merit of rules of the board which deal with wholesale drug distributors, pharmacy<br>distributors, and drug manufacturers. The board may not adopt any rule affecting wholesale drug<br>distributors or pharmacy distributors without first submitting the proposed rule to the committee<br>for review and comment.43-15.1-04.Wholesale drug distributor and pharmacy distributor licensingrequirements - Penalty.1.No person may act as a wholesale drug distributor or pharmacy distributor without<br>first obtaining an annual license to do so from the board and paying the annual fee<br>required by the board.2.The board may grant a temporary license when the wholesale drug distributor or<br>pharmacy distributor first applies for a license to operate within this state.Atemporary license is valid until the board finds that the applicant meets the<br>requirements for regular licensure.3.The licensee shall operate in a manner prescribed by law and according to the rules<br>adopted by the board.4.The board may require a separate license for each facility directly or indirectly<br>owned or operated by the same business entity within this state, or for a parent<br>entity with divisions, subsidiaries, or affiliate companies within this state if operations<br>are conducted at more than one location and there exists joint ownership and control<br>among all the entities.5.An applicant for a license and a licensee shall satisfy the board that the applicant or<br>licensee has and will continuously maintain:a.Adequate storage conditions and facilities;b.Minimum liability and other insurance as may be required under any applicable<br>federal or state law;c.A viable security system that includes afterhours, central alarm, or comparable<br>entrydetectioncapability;restrictedpremisesaccess;comprehensivePage No. 2employment applicant screening; and safeguards against all forms of employee<br>theft;d.A system of records that describes all wholesale drug distributor and pharmacy<br>distributor activities for at least the most recent two-year period and which is<br>reasonably accessible in any inspection authorized by the board;e.Principals and persons, including officers, directors, primary shareholders, and<br>key management executives, who must at all times demonstrate and maintain<br>their capability of conducting business in conformity with sound financial<br>practices as well as state and federal law;f.Complete, updated information, to be provided the board as a condition for<br>obtaining and retaining a license, about each wholesale drug distributor to be<br>licensed under this chapter, including pertinent licensee corporate, if applicable,<br>or other ownership, principal, key personnel, and facilities information;g.Written policies and procedures that assure reasonable wholesale drug<br>distributor and pharmacy distributor preparation for, protection against, and<br>handling of any facility security or operation problems, including problems<br>caused by natural disaster or government emergency; inventory inaccuracies or<br>product shipping and receiving; outdated product or other unauthorized product<br>control; appropriate disposition of returned goods; and product recalls;h.Sufficient inspection procedures for all incoming and outgoing product<br>shipments; andi.Operations in compliance with all federal legal requirements applicable to<br>wholesale drug distribution.All requirements by the board under this subsection must conform to wholesale drug<br>distributor licensing guidelines formally adopted by the United States food and drug<br>administration. In case of conflict between any wholesale drug distributor licensing<br>requirement imposed by the board under this subsection and any wholesale drug<br>distributor licensing guideline of the food and drug administration, the guideline<br>controls.6.An agent or employee of any licensed wholesale drug distributor or pharmacy<br>distributor need not seek licensure under this section and may lawfully possess<br>pharmaceutical drugs when acting in the usual course of business or employment.7.A person who violates this section is guilty of a class C felony.43-15.1-05.Out-of-state wholesale drug distributor and pharmacy distributorlicensing requirements - Penalty.1.An out-of-state wholesale drug distributor or pharmacy distributor or a principal or<br>agent of the distributor may not conduct any business in this state unless the<br>distributor has obtained a license to do so from the board and paid the fee required<br>by the board.2.Application for a license under this section must be made on a form furnished by the<br>board.3.The issuance of a license under this section does not change or affect tax liability<br>imposed by this state on any out-of-state wholesale drug distributor or pharmacy<br>distributor.Page No. 34.The board, by rule, may license out-of-state wholesale drug distributors or pharmacy<br>distributors on the basis of reciprocity to the extent that an out-of-state wholesale<br>drug distributor or pharmacy distributor:a.Possesses a valid license granted by another state pursuant to legal standards<br>comparable to those of this state which must be met for obtaining a license<br>under the laws of this state; andb.Shows that the other state would extend reciprocal treatment under its own<br>laws to a wholesale drug distributor or pharmacy distributor of this state.5.A person who violates this section is guilty of a class C felony.43-15.1-06.License renewal procedures.The board shall mail an application forlicense renewal to each licensee before the first day of the month in which the license expires. If<br>application for renewal of the license, along with required fee, is not received by the board before<br>the first day of the following month, the license expires on the last day of that month.43-15.1-07.Adoption of rules.Every rule adopted by the board with respect toimplementation of this chapter must conform to the wholesale drug distributor licensing<br>guidelines formally adopted by the United States food and drug administration. In case of conflict<br>between a rule adopted by the board and a guideline of the food and drug administration, the<br>guideline controls.43-15.1-08. Violations of chapter - Effect on licensure. If the board determines that awholesale drug distributor or wholesale pharmacy distributor has committed an act or is engaging<br>in a course of conduct which constitutes a clear and present danger to the public health and<br>safety in this state, the board may restrict or suspend the wholesale drug distributor's or<br>pharmacy distributor's license.The board has the burden of proving that a wholesale drugdistributor or wholesale pharmacy distributor is a clear and present danger to the public health<br>and safety.43-15.1-09. Inspection powers and access to wholesale drug distributor records -Penalty. The board or a designee of the board may conduct inspections during normal business<br>hours upon all open premises purporting or appearing to be used by a wholesale drug distributor<br>or wholesale pharmacy distributor in this state.A distributor who provides adequatedocumentation of the most recent satisfactory inspection less than three years old by either the<br>United States food and drug administration or a state agency determined to be comparable by<br>the board is exempt from further inspection for a period of time determined by the board. This<br>exemption does not bar the board from initiating an investigation pursuant to a complaint<br>regarding a wholesale drug distributor or pharmacy distributor. A wholesale drug distributor may<br>keep records at a central location apart from the principal office of the wholesale drug distributor<br>or the location at which the drugs were stored and from which they were shipped; provided, that<br>the records are made available for inspection within three business days of a request by the<br>board.The records may be kept in any form permissible under federal law applicable toprescription drugs recordkeeping. A person who fails to provide a duly authorized person the<br>right of entry as provided in this section is guilty of a class A misdemeanor for the first conviction<br>and a class C felony for each subsequent conviction.43-15.1-10. Judicial enforcement. Upon proper application by the board, a court ofcompetent jurisdiction may grant an injunction, restraining order, or other order as may be<br>appropriate to enjoin a person from offering to engage or engaging in the performance of any<br>acts or practices for which a certificate of registration or authority, permit, or license is required by<br>any applicable state law, including this chapter, upon a showing that the acts or practices were or<br>are likely to be performed or offered to be performed without a certificate of registration or<br>authority, permit, or license. An action authorized under this section is in addition to and not in<br>lieu of any other penalty provided by law and may be brought concurrently with other actions to<br>enforce this chapter.Page No. 4Document Outlinechapter 43-15.1 wholesale drug distributors]]>