*_HB06946PH_JUD040405____*
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General Assembly
Substitute Bill No. 6946
January Session, 2005
*_____HB06946PH_JUD040405____*
AN ACT ENSURING THE SAFETY OF MEDICINE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective October 1, 2005) As used in sections 1 to 7,
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inclusive, of this act:
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(1) "Authenticate" means to affirmatively verify, before any
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distribution of a prescription drug occurs, that each transaction listed
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on the pedigree has occurred.
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(2) "Commissioner" means the Commissioner of Consumer
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Protection.
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(3) "Facility" means a facility of a wholesale distributor where
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prescription drugs are stored, handled, repackaged or offered for sale.
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(4) "Immediate family" means a dependent relative who resides in
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the individual's household or any spouse, child or parent of the
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individual.
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(5) "Normal distribution channel" means a chain of custody for a
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medication that goes from a manufacturer to a wholesaler to a
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pharmacy to a patient.
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(6) "Pedigree" means a document or electronic file containing
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information that records each distribution of any given prescription
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drug, from sale by a pharmaceutical manufacturer, through acquisition
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and sale by any wholesale distributor or repackager, until final sale to
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a pharmacy or other person dispensing or administering the
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prescription drug.
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(7) "Prescription drug" means any drug, including any biological
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product, except for blood and blood components intended for
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transfusion or biological products that are also medical devices
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required by federal law or regulations, to be dispensed only by a
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prescription, including finished dosage forms and bulk drug
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substances subject to Section 503(b) of the federal Food, Drug and
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Cosmetic Act.
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(8) "Repackage" means repackaging or otherwise changing the
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container, wrapper or labeling to further the distribution of a
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prescription drug.
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(9) "Repackager" means a person who repackages.
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(10) "Wholesale distributor" means any person engaged in the
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wholesale distribution of prescription drugs, including, but not limited
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to, manufacturers, unless specified otherwise, repackagers, own-label
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distributors, private-label distributors, jobbers, brokers, warehouses,
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including manufacturers' and distributors' warehouses, chain drug
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warehouses and wholesale drug warehouses, independent wholesale
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drug traders and retail pharmacies that conduct wholesale
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distribution.
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Sec. 2. (NEW) (Effective October 1, 2005) Every wholesale distributor
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that engages in the wholesale distribution of prescription drugs in the
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state, including nonresident wholesale distributors that ship
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prescription drugs into the state, shall be licensed by the
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Commissioner of Consumer Protection, in accordance with the
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provisions of sections 1 to 7, inclusive, of this act, before engaging in
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the wholesale distribution of prescription drugs in the state.
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Sec. 3. (NEW) (Effective October 1, 2005) (a) Any person may apply to
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the Commissioner of Consumer Protection for a wholesale distributor
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license or for renewal of a wholesale distributor license.
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(b) The applicant shall disclose on the application (1) the name, full
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business address and telephone number of the applicant or licensee;
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(2) all trade or business names used by the applicant or licensee; (3)
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addresses, telephone numbers and names of contact persons for all
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facilities used by the applicant or licensee for the storage, handling and
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distribution of prescription drugs; (4) the type of ownership or
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operation, including, but not limited to, partnership, corporation or
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sole proprietorship; (5) the name or names of the owner or operator of
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the applicant or licensee and related information, including (A) if an
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individual, the name of the individual, (B) if a partnership, the name of
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each partner and the name of the partnership, (C) if a corporation, the
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name and title of each corporate officer and director, the corporate
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names and the state of incorporation, and (D) if a sole proprietorship,
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the full name of the sole proprietor and the name of the business
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entity; (6) a list of all licenses and permits issued to the applicant or
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licensee by any other state that authorizes the applicant or licensee to
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purchase or possess prescription drugs; (7) the name of the manager of
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the facility that is applying for the initial license or to renew the
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license, the next four highest ranking employees responsible for
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prescription drug wholesale operations for the facility, and the name
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of all affiliated parties for the facility, together with the personal
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information statement required pursuant to subdivision (9) of this
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subsection; (8) the name of the designated representative of the
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applicant or licensee for the facility, together with the personal
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information statement required pursuant to subdivision (9) of this
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subsection and fingerprints for each such person; and (9) the following
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information for each person described in subdivisions (7) and (8) of
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this subsection who is required to provide a personal information
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statement:
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(A) The person's places of residence for the past seven years;
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(B) The person's date and place of birth;
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(C) The person's occupations, positions of employment and offices
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held during the past seven years;
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(D) The principal business and address of any business, corporation
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or other organization in which each such office of the person was held
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or in which each such occupation or position of employment was held;
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(E) Whether the person was, during the past seven years, the subject
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of any proceeding for the revocation of any license and, if so, the
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nature and disposition of the proceeding;
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(F) Whether, during the past seven years, the person was enjoined,
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either temporarily or permanently, by a court of competent jurisdiction
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from violating any federal or state law regulating the possession,
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control or distribution of prescription drugs, together with details
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concerning any such event;
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(G) A description of any involvement by the person with any
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business, including any investments, other than the ownership of stock
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in a publicly traded company or mutual fund, during the past seven
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years, that manufactured, administered, prescribed, distributed or
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stored pharmaceutical products and any lawsuits in which such
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business was named as a party;
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(H) A description of any felony criminal offense of which the
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person, as an adult, was found guilty, regardless of whether
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adjudication of guilt was withheld or whether the person pled guilty
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or nolo contendere. If the person indicates that a criminal conviction is
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under appeal and submits a copy of the notice of appeal of that
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criminal offense, the applicant or licensee shall, not later than fifteen
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days after the disposition of the appeal, submit to the state a copy of
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the final written order of disposition; and
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(I) A photograph of the person taken not earlier than the thirty-day
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period preceding submission to the commissioner of the information
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required by this subsection.
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(c) The commissioner shall not issue or renew a wholesale
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distributor license unless the commissioner determines that the
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applicant's designated representative meets all of the following
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qualifications: (1) Is at least twenty-one years of age; (2) has been
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employed full time for at least three years in a pharmacy or with a
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wholesale distributor in a capacity related to the dispensing and
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distribution of and recordkeeping relating to prescription drugs; (3)
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has received a score of seventy-five per cent or more on an
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examination given by the commissioner regarding federal and state
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laws governing wholesale distribution of prescription drugs, provided
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a designated representative who previously served in such capacity
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retakes the state examination each time a licensee lists the person as
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the designated representative in an application for license renewal; (4)
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is employed by the applicant full time in a managerial position; (5) is
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actively involved in and aware of the actual daily operation of the
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wholesale distributor; (6) is physically present at the applicant's facility
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during regular business hours, except when the absence of the
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designated representative is authorized, including, but not limited to,
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absences due to sick leave or vacation leave; (7) is serving in the
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capacity of a designated representative for only one applicant or
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licensee at a time; (8) does not have any convictions under any federal,
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state or local laws relating to wholesale or retail prescription drug
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distribution or distribution of controlled substances; and (9) does not
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have any felony convictions under federal, state, or local laws.
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(d) The applicant shall submit to a criminal history records check in
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accordance with the provisions of section 29-17a of the general
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statutes.
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(e) The commissioner shall require each applicant to submit a bond
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in an amount determined by the commissioner or other equivalent
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means of security acceptable to the commissioner, such as an
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irrevocable letter of credit or a deposit in a trust account or financial
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institution, payable to the drug wholesaler account established
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pursuant to section 9 of this act. The purpose of the bond is to secure
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payment of any fines or penalties imposed by the commissioner and
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any fees or costs incurred by the commissioner regarding a wholesale
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distributor license under the provisions of sections 1 to 7, inclusive, of
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this act and which the licensee fails to pay by the date thirty days after
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the date such fines, penalties, fees or costs become final. The
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commissioner may make a claim against such bond or security up to
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one year after the date the licensee's license ceases to be valid.
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(f) If a wholesale distributor distributes prescription drugs from
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more than one facility, the wholesale distributor shall obtain a
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wholesale distributor license for each facility.
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(g) A wholesale distributor licensed pursuant to the provisions of
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sections 1 to 7, inclusive, of this act shall notify the commission of any
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changes to the information required in subsection (b) of this section not
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later than thirty days after such change.
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Sec. 4. (NEW) (Effective October 1, 2005) (a) On and after October 1,
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2005, in any calendar month, a wholesale distributor shall sell,
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distribute, transfer or otherwise sell at least ninety-five per cent of its
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total amount of prescription drugs to a pharmacy or other person
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dispensing or administering the drug, except as may be otherwise
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required under an agreement between such distributor and the
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Commissioner of Consumer Protection.
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(b) A wholesale distributor shall not purchase or otherwise receive a
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prescription drug from a pharmacy, except that a wholesale distributor
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may receive a prescription drug from a pharmacy if the prescription
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drug was originally purchased by the pharmacy from the wholesale
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distributor.
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(c) A wholesale distributor that meets the exception in subsection
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(b) of this section shall not: (1) Receive from a pharmacy an amount or
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quantity of a prescription drug larger than the amount or quantity that
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was originally sold by the wholesale distributor to the pharmacy; or (2)
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pay the pharmacy an amount, either in cash or credit, more than the
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pharmacy originally paid the wholesale distributor for the prescription
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drug.
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(d) A manufacturer or wholesale distributor shall furnish
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prescription drugs only to a person licensed by the appropriate state
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licensing authorities. Before furnishing prescription drugs to a person
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not known to the manufacturer or wholesale distributor, the
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manufacturer or wholesale distributor shall affirmatively verify the
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person is legally authorized to receive the prescription drugs by
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contacting the appropriate state licensing authorities.
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(e) Prescription drugs furnished by a manufacturer or wholesale
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distributor shall be delivered only to the premises listed on the license,
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provided the manufacturer or wholesale distributor may furnish
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prescription drugs to an authorized person or agent of that person at
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the premises of the manufacturer or wholesale distributor if: (1) The
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identity and authorization of the recipient is properly established; and
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(2) this method of receipt is employed only to meet the immediate
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needs of a particular patient of the authorized person. Prescription
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drugs may be furnished to a hospital pharmacy receiving area,
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provided a pharmacist or authorized receiving personnel signs, at the
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time of delivery, a receipt stating the type and quantity of such
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prescription drug or drugs received. Any discrepancy between the
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receipt and the type and quantity of the prescription drug actually
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received shall be reported to the delivering manufacturer or wholesale
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distributor on or before the next business day after delivery to the
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pharmacy receiving area.
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(f) A manufacturer or wholesale distributor shall not accept
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payment for, or allow the use of, a person or entity's credit to establish
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an account for the purchase of prescription drugs from any person
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other than the owner or owners of record, the chief executive officer or
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the chief financial officer listed on the license of a person or entity
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legally authorized to receive prescription drugs. Any account
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established for the purchase of prescription drugs shall bear the name
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of the licensee.
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Sec. 5. (NEW) (Effective October 1, 2005) (a) Each person who is
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engaged in the wholesale distribution of a prescription drug, including
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repackagers, but excluding the original manufacturer of the finished
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form of the prescription drug, shall provide a pedigree or electronic
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file identifying each sale, trade or transfer of a prescription drug when
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a prescription drug leaves the normal distribution channel and is sold,
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traded or transferred to any other person. If a pharmacy sells a drug to
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any person who is not the final consumer, the pharmacy shall provide
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to the person acquiring the prescription drug a pedigree identifying
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each sale, trade or transfer of a prescription drug. This subsection shall
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not be construed to apply to the sale, trade or transfer of a prescription
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drug between licensees with a common ownership or to meet
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emergency needs.
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(b) Each person who is engaged in the wholesale distribution of a
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prescription drug, including repackagers, but excluding the original
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manufacture of the finished form of the prescription drug, who is in
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possession of a pedigree for a prescription drug and attempts to
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further distribute such prescription drug, shall affirmatively verify
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before any distribution of a prescription drug occurs that each
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transaction listed on the pedigree has occurred.
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(c) The Commissioner of Consumer Protection shall establish a list
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of prescription drugs for which a pedigree is required. Such list shall
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be based on priorities established by the commissioner including, but
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not limited to, public health preparedness, pharmacoterrorism
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prevention or response, medication integrity and economic integrity
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and shall be issued twice yearly, indicating each time whether any or
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no changes have been made to such list. Each pedigree shall:
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(1) Include all necessary identifying information concerning each
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sale in the chain of distribution of the product from the manufacture,
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through acquisition and sale by any wholesale distributor or
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repackager, until final sale to a pharmacy or other person dispensing
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or administering the drug. The necessary chain of distribution
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information shall include, but shall not be limited to: (A) The name,
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address, telephone number and, if available, the electronic mail
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address, of each owner of the prescription drug and each wholesale
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distributor who does not take title to the prescription drug; (B) the
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signature of each owner of the prescription drug and each wholesale
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distributor who does not take title to the prescription drug; (C) the
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name and address of each location from which the product was
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shipped, if different from the owner's; (D) the transaction dates; and
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(E) certification that each recipient has authenticated the pedigree.
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(2) The pedigree shall also include, but shall not be limited to: (A)
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The name of the prescription drug; (B) dosage form and strength of the
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prescription drug; (C) size of the container; (D) number of containers;
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(E) lot number of the prescription drug; and (F) name of the
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manufacturer of the finished dosage form.
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(d) Each pedigree shall be: (1) Maintained by the purchaser and the
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wholesale distributor for three years; and (2) available for inspection or
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removal upon request of an authorized officer of the law. Wholesale
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distributors that distribute certain prescription drugs identified by the
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commissioner shall report inventory levels and distribution
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information including, but not limited to, the name, address, town and
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state of the distributor or manufacturer, the prescription drug, the
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drug quantity and the date of transfer of the drug and the name,
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address, town and state of the distributor or receiving entity. Such
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information shall be reported at such time and in such form as
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required by the commissioner. The information provided under this
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subsection shall not be subject to disclosure under the Freedom of
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Information Act, as defined in section 1-200 of the general statutes, and
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shall be available only to the Departments of Consumer Protection and
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Public Health, the Office of Emergency Management and such other
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agency as the commissioner determines, after request by such agency,
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has need for the information for purposes of public health
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preparedness, pharmacoterrorism prevention or response, medication
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integrity or such other purpose deemed appropriate by the
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commissioner.
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(e) The Commissioner of Consumer Protection, with the advice and
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assistance of the Commission of Pharmacy, shall adopt regulations, in
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accordance with chapter 54 of the general statutes, to carry out the
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provisions of this section.
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Sec. 6. (NEW) (Effective October 1, 2005) (a) If the state finds that
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there is a reasonable probability that: (1) A wholesale distributor has:
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(A) Knowingly violated a provision of sections 1 to 7, inclusive, of this
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act; or (B) falsified a pedigree, or knowingly sold, distributed,
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transferred, manufactured, repackaged, handled or held a counterfeit
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prescription drug intended for human use; (2) the prescription drug
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that is alleged to be in violation of subdivision (1) of this subsection
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could cause serious adverse health consequences or death; and (3)
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other procedures would result in unreasonable delay, the state shall
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issue an order requiring the appropriate person, including the
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manufacturers, distributors or retailers of the drug, to immediately
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cease distribution of the drug.
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(b) An order issued under subdivision (3) of subsection (a) of this
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section shall provide the person subject to the order with an
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opportunity for an informal hearing, to be held not later than ten days
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after the date of the issuance of the order, on the actions required by
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the order. If, after providing an opportunity for such a hearing, the
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state determines that inadequate grounds exist to support the actions
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required by the order, the state shall vacate the order.
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Sec. 7. (NEW) (Effective October 1, 2005) (a) It shall be unlawful for a
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person to perform or cause the performance of or aid and abet any of
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the following acts in this state:
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(1) Failure to obtain a license in accordance with sections 1 to 7,
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inclusive, of this act, or operating without a valid license when a
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license is required by sections 1 to 7, inclusive, of this act;
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(2) Selling, distributing, transferring or otherwise providing
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prescription drugs in violation of the five per cent rule established in
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subsection (a) of section 4 of this act;
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(3) Purchasing or otherwise receiving a prescription drug from a
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pharmacy in violation of the provisions of subsection (b) or (c) of
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section 4 of this act;
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(4) The sale, distribution or transfer of a prescription drug to a
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person that is not authorized under the law of the jurisdiction in which
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the person receives the prescription drug to receive the prescription
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drug, in violation of subsection (d) of section 4 of this act;
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(5) Failure to deliver prescription drugs to specified premises, in
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accordance with the provisions of subsection (e) of section 4 of this act;
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(6) Accepting payment or credit for the sale of prescription drugs, in
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violation of subsection (f) of section 4 of this act;
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(7) Failure to maintain or provide pedigrees, in accordance with the
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provisions of section 5 of this act;
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(8) Failure to obtain, pass or authenticate a pedigree, in violation of
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section 5 of this act;
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(9) Providing the state or any of its representatives or any federal
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official with false or fraudulent records or making false or fraudulent
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statements regarding any matter under the provisions of sections 1 to
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7, inclusive, of this act;
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(10) Obtaining or attempting to obtain a prescription drug by fraud,
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deceit, misrepresentation or engaging in misrepresentation or fraud in
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the distribution of a prescription drug;
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(11) The manufacture, repacking, sale, transfer, delivery, holding or
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offering for sale any prescription drug that is adulterated, misbranded,
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counterfeit, suspected of being counterfeit or has otherwise been
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rendered unfit for distribution;
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(12) The adulteration, misbranding or counterfeiting of any
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prescription drug;
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(13) The receipt of any prescription drug that is knowingly
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adulterated, misbranded, stolen, obtained by fraud or deceit,
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counterfeit or suspected of being counterfeit and the delivery or
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proffered delivery of such drug for pay or otherwise; and
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(14) The alteration, mutilation, destruction, obliteration or removal
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of the whole or any part of the labeling of a prescription drug or the
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commission of any other act with respect to a prescription drug that
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results in the prescription drug being misbranded.
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(b) Any person who violates the provisions of subsection (a) of this
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section shall be fined not more than twenty thousand dollars or
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imprisoned not less than ten years or more than twenty-five years, or
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both.
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Sec. 8. (NEW) (Effective July 1, 2005) (a) A violation of the provisions
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of sections 1 to 7, inclusive, of this act constitutes an unfair trade
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practice under subsection (a) of section 42-110b of the general statutes.
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(b) Any person who violates any provision of sections 1 to 7,
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inclusive, of this act shall be fined not more than twenty thousand
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dollars or be imprisoned not less than ten years or more than twenty
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years, or both.
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Sec. 9. (NEW) (Effective July 1, 2005) There is established a drug
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wholesaler account which shall be a separate, nonlapsing account
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within the General Fund. The account may contain proceeds from the
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bond prescribed by subsection (e) of section 3 of this act and any other
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moneys required by law to be deposited in the account, and shall be
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held in trust separate and apart from all other moneys, funds and
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accounts. Any balance remaining in the account at the end of any fiscal
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year shall be carried forward in the account for the fiscal year next
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succeeding. Investment earnings credited to the account shall become
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part of the account. Amounts in the account shall be expended only
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pursuant to appropriations by the General Assembly, for the fiscal
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year ending June 30, 2006, and each fiscal year thereafter, for the
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purposes prescribed in subsection (e) of section 3 of this act, provided
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such amounts so expended shall not supplant any state or federal
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funds otherwise available for such services.
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This act shall take effect as follows and shall amend the following
sections:
Section 1
October 1, 2005
New section
Sec. 2
October 1, 2005
New section
Sec. 3
October 1, 2005
New section
Sec. 4
October 1, 2005
New section
Sec. 5
October 1, 2005
New section
Sec. 6
October 1, 2005
New section
Sec. 7
October 1, 2005
New section
Sec. 8
July 1, 2005
New section
Sec. 9
July 1, 2005
New section
PH
Joint Favorable Subst. C/R
JUD
