Issue Date: April 19, 2013
Volume 40 • Issue 8 - Pages 742—745
DEPARTMENT OF HEALTH AND MENTAL HYGIENE
Subtitle 34 BOARD OF PHARMACY
10.34.22 Licensing of Wholesale Prescription Drug or Device Distributors
Authority: Health Occupations Article, §§12-205, 12-601, and 12-6C-01—12-6C-13, Annotated Code of Maryland
Notice of Proposed Action
The Secretary of Health and Mental Hygiene proposes to amend Regulations .02, .03, and .05, and adopt new Regulations .03-1, and .09—.11 under COMAR 10.34.22 Licensing of Wholesale Prescription Drug or Device Distributors. This action was considered by the Board of Pharmacy at a public meeting held December 19, 2012, notice of which was given by publication on the Board of Pharmacy website, http://dhmh.maryland.gov/pharmacy/SitePages/Home.aspx, from November 20, 2012, through December 19, 2012, pursuant to the State Government Article, §10-506(c), Annotated Code of Maryland.
Statement of Purpose
The purpose of this action is to revise COMAR 10.34.22 to comply with statutory requirements as amended by SB 133/HB 316 State Board of Pharmacy – Wholesale Distributor Permits – Application Requirements, 2012. The revisions include: adding definitions for “ANDA”, “NDA”, and “UDI” numbers. Other new definitions include “cease to operate”, “central repository”, “virtual manufacturer”, and “retail pharmacy”. Retail pharmacy was defined to include both retail and waiver pharmacies so that pharmacies in Maryland may only wholesale distribute 5 percent or less of the retail pharmacy’s annual sales. Revisions have been made: concerning criminal background checks so that applicants may submit their request for criminal background checks directly to the central repository instead of to the Board; adding a section that requires out of State applicants to obtain criminal background checks from the state in which they are located; and revising the inspection requirement so that only entities that hold product are required to be inspected. The proposed action also includes three new regulations which clarify procedures. The new Regulation .09 addresses reinstatement for expired wholesale distributor permits. The new Regulation .10 addresses required information and procedures for closing. The new Regulation .11 addresses relocation requirements. Finally, the proposal includes a corrective revision to Regulation .05 Violations and Penalties that clarifies distributing a prescription drug or device to a consumer or patient is a violation of the law.
Comparison to Federal Standards
There is no corresponding federal standard to this proposed action.
Estimate of Economic Impact
I. Summary of Economic Impact. The revisions to this chapter add minimum application requirements for virtual manufacturers. It also includes new regulations for reinstatement, procedures for ceasing to operate, and relocation. These revisions impose a positive economic impact on the issuing agency since less time will be required of Board staff to process applications. These revisions impose a positive impact on virtual manufacturers because they may now utilize less time staff time completing the application.
II. Types of Economic Impact.
A. On issuing agency:
B. On other State agencies:
C. On local governments:
D. On regulated industries or trade groups:
E. On other industries or trade groups:
F. Direct and indirect effects on public:
III. Assumptions. (Identified by Impact Letter and Number from Section II.)
A. The revisions in this proposal simplify the application process and, as a consequence, require less staff time to process applications.
D. The regulated industry will welcome the simpler application process for certain virtual manufacturers since it will save staff time for the regulated industry.
F. This proposal has an indirect and positive effect on the public as virtual manufacturers will be able to apply for licensure in less time making certain prescription drugs available to Maryland consumers in less time without sacrificing public safety.
Economic Impact on Small Businesses
The proposed action has minimal or no economic impact on small businesses.
Impact on Individuals with Disabilities
The proposed action has no impact on individuals with disabilities.
Opportunity for Public Comment
Comments may be sent to Michele Phinney, Director, Office of Regulation and Policy Coordination, Department of Health and Mental Hygiene, 201 W. Preston Street, Room 512, Baltimore, Maryland 21201, or call 410-767-6499 (TTY800-735-2258), or email to email@example.com, or fax to 410-767-6483. Comments will be accepted through May 20, 2013. A public hearing has not been scheduled.
A. (text unchanged)
B. Terms Defined.
(1) “ANDA” means an Abbreviated New Drug Application number and contains data that, when submitted to the U.S. Food and Drug Administration’s (FDA) Center for Drug Evaluation and Research, Office of Generic Drugs, provides for the review and ultimate approval of a generic drug product.
[(1)] (1-1)―(5) (text unchanged)
(5-1) “Cease to operate” means the date on which the last prescription drug or prescription device is distributed by the permit holder.
(5-2) “Central repository” means the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services.
(6)―(8) (text unchanged)
(8-1) “Designee” means a Board contracted or Board recognized entity.
(9)―(14) (text unchanged)
(14-1) “NDA” means a New Drug Application number assigned by the FDA for drugs formally proposed to the FDA as a new pharmaceutical for sale and marketing in the U.S.
(15)―(18) (text unchanged)
(18-1) “Reinstatement” means renewal of a wholesale distributor permit after the permit has expired.
(18-2) “Renewal” means renewing a wholesale distributor permit before the date of expiration.
(18-3) “Retail pharmacy” means a pharmacy that has been issued a:
(a) Waiver pharmacy permit in accordance with COMAR 10.34.17; or
(b) Full service pharmacy permit.
(19)―(21) (text unchanged)
(21-1) “UDI” means a Unique Device Identification number that is created through a globally accepted device identification and coding standard that allows the unambiguous identification of a specific medical device.
(21-2) Virtual Manufacturer.
(a) “Virtual Manufacturer” means an entity that engages in the manufacture of drug or device products for which it:
(i) Owns the NDA or ANDA number, if a prescription drug;
(ii) Owns the UDI number, as available, for a prescription device;
(iii) Contracts with a contract manufacturing organization for the physical manufacture of the drug or device product;
(iv) Is not involved in the physical manufacture of the drug or device product; and
(v) At no time takes physical possession of, or stores, the drug or device product.
(b) “Virtual Manufacturer” may include entities that are identified as a broker, own-label distributor, sponsor manufacturer, private-label manufacturer, or contract manufacturer.
(22)―(23) (text unchanged)
.03 Minimum Application Requirements for [Applicant] Applicants Holding Product.
A. (text unchanged)
B. Criminal Background Check Requirements for an Applicant Located in this State. The Board shall require [the following information from] the designated representative and the immediate supervisor of the designated representative at the applicant’s place of business as part of the [initial] application for a permit to submit to the Central Repository and the Federal Bureau of Investigation:
(1) [Two complete sets of legible fingerprints taken on forms] Electronically or digitally captured fingerprints at approved electronic fingerprint locations approved by the Director of the Central Repository [and the Director of the Federal Bureau of Investigation];
(2)―(3) (text unchanged)
B-1. Criminal Background Check Requirements for an Applicant Located Outside this State.
(1) The Board shall require the designated representative and the immediate supervisor of the designated representative at the applicant’s place of business as part of the application for a permit to submit to a criminal history records check by the applicant’s state of residence, in accordance with the laws of the applicant’s state of residence.
(2) The criminal history records check shall consist of:
(a) A state criminal history records check for the applicant’s state of residence; and
(b) A national criminal history records check.
(3) The designated representative and the immediate supervisor of the designated representative of an applicant shall request the appropriate entity in the applicant’s state of residence to forward the results of the criminal history records check to the Board and the applicant.
C. (text unchanged)
D. The Board may not issue an initial or renewal wholesale distributor permit to an applicant unless the Board or its designee:
(1) [Conducts] If the applicant holds prescription drugs or devices, conducts a physical inspection of the applicant’s place of business, including any facility of the applicant;
(2)―(4) (text unchanged)
E. Surety Bond.
(1)―(2) (text unchanged)
(3) [The] An applicant shall submit the following documentation to verify the applicant’s annual gross receipts in the State are less than $10,000,000 for the previous tax year:
(a) A federal tax return[, if the applicant’s total annual gross receipts within or without the State are less than $10,000,000]; or
(b) An annual sales report specifying the sales of prescription drugs and devices in the State audited by a certified public accountant[, if the applicant’s total annual gross receipts within or without the State are $10,000,000 or more].
(4) (text unchanged)
(5) [A single surety bond shall cover all facilities operated by the applicant in the State] An applicant shall obtain a surety bond for each facility.
(6) A single surety bond may cover all facilities operated by the applicant within this State.
F.―I. (text unchanged)
J. Information and qualification requirements for obtaining a permit under this regulation, beyond that required by federal law, does not apply to a manufacturer who distributes its own prescription:
(1) Drugs approved by the U.S. Food and Drug Administration; or
(2) Devices that are approved or authorized by the U.S. Food and Drug Administration.
.03-1 Minimum Application Requirements for Virtual Manufacturers.
The information and qualification requirements for obtaining a permit under Regulation .03 of this chapter, beyond that required by federal law, do not apply to a virtual manufacturer that meets the following requirements:
A. Provides a list of drug or device products it distributes;
B. Provides a list of the NDA or ANDA numbers associated with each drug it distributes;
C. Provides a list of the UDI numbers, as available, associated with each device it distributes;
D. Provides the name and facility address of the contract manufacturer for each drug or device product it distributes;
E. Provides verification of current FDA registration for each contract manufacturing facility listed;
F. If the contract manufacturer distributes into this State, provides the wholesale distributor permit number for the contract manufacturer;
G. If the contract manufacturer does not distribute into this State, provides the name and Maryland’s wholesale distributor permit number for the entity that physically distributes the product into this State;
H. Provides a statement affirming that the virtual manufacturer does not contract the manufacture or distribution for drugs or devices other than those for which it owns the NDA, ANDA, or UDI numbers;
I. Provides an attestation by the owner of the virtual manufacturer that it does not hold product;
J. Provides a copy of existing licensure from the state in which it is located, if applicable; and
K. Has valid federal licensure or registration, as verified by the Board.
.05 Violations and Penalties.
A. After a hearing held under Health Occupations Article, §12-601, Annotated Code of Maryland, the Board may deny, suspend, revoke, or place on probation a permit holder, reprimand a permit holder, or impose a fine if the permit holder:
(1)―(2) (text unchanged)
(3) Commits any of the following acts:
(a)―(o) (text unchanged)
(p) Distributes a prescription drug or device to [the] a consumer or patient [without a prescription or prescription order from a practitioner licensed by law to use or prescribe the prescription drug or device];
(q)―(x) (text unchanged)
(4) (text unchanged)
B. (text unchanged)
A. The wholesale distributor permit shall expire on the last day of its term.
B. The Board may not reinstate the wholesale distributor permit unless the applicant pays a reinstatement fee as set by the Board in COMAR 10.34.09.
.10 Required Information and Procedures for Ceasing to Operate.
A. If a wholesale distributor is located in another state, a wholesale distributor anticipating ceasing to operate in Maryland shall return the permit to the Board within 10 days of closing.
B. Procedures for Wholesale Distributors Located in this State for Ceasing to Operate.
(a) At least 30 days before a wholesale distributor’s anticipated date of ceasing to operate, the wholesale distributor shall notify the Board in writing, by certified mail, return receipt requested, or hand delivered to the Board’s office, of the day on which the wholesale distributor shall cease to operate.
(b) A wholesale distributor shall:
(i) Notify drug and device suppliers that supply prescription drugs and devices to the wholesale distributor, at least 30 days in advance of ceasing to operate, of the date that the wholesale distributor shall cease to operate;
(ii) Notify manufacturers, wholesale distributors, licensed pharmacies and authorized prescribers that receive prescription drugs and devices from the wholesale distributor, at least 30 days in advance of ceasing to operate, of the date that the wholesale distributor will cease to operate; and
(iii) Comply with applicable federal regulations.
(2) Within 72 hours before or after ceasing to operate, the wholesale distributor shall request a closing inspection from the Board.
(3) With the exception of controlled dangerous substances, the wholesale distributor shall dispose of prescription drugs or devices in stock by one or more of the following means:
(a) Returning the prescription drugs or devices to a distributor or manufacturer; or
(b) Transferring the prescription drugs or devices to another wholesale distributor, licensed pharmacy, authorized prescriber, or other person or entity approved by the Board.
(4) Disposition of Controlled Dangerous Substances.
(a) The wholesale distributor shall comply with the procedures set forth in this regulation in addition to those set forth in COMAR 10.19.03.10 governing the transfer, return, or disposal of controlled dangerous substances.
(b) The wholesale distributor shall provide the names, address, telephone numbers, and Drug Enforcement Administration registration numbers of the persons or business entities to whom prescription drugs or devices in stock were returned or transferred under this section to the Board.
(5) At the closing inspection, the wholesale distributor shall provide to the Board the following:
(a) The exact date on which the wholesale distributor ceased to operate;
(b) A copy of the inventory of prescription drugs or devices disposed of, transferred, or returned.
(c) The wholesale distributor permit and the State Department of Health and Mental Hygiene Controlled Dangerous Substance Registration for cancellation, if applicable;
(d) If prescription drugs or devices are destroyed pursuant to this regulation, the wholesale distributor shall provide the Board with a letter, signed under oath by the wholesale distributor, stating the:
(i) Date, place, and manner in which the prescription drugs or devices were destroyed;
(ii) Names, addresses, and telephone numbers of the persons responsible for destroying the prescription drugs or devices; and
(iii) Name, dosage unit, and quantity of each type of prescription drug or device destroyed; and
(e) If any pedigrees or other documents are transferred, the wholesale distributor shall provide the Board with a letter, signed under oath by the wholesale distributor, stating:
(i) The date, time, place to which and manner in which the pedigrees or other documents were transferred; and
(ii)The names, addresses, and telephone numbers of the persons responsible for transferring the pedigrees or other documents.
A. At least 30 days before relocation, a permit holder shall submit a relocation application to the Board.
B. If relocation is due to a catastrophic event or State of Emergency, the relocation applicant shall:
(1) Notify the Board within 48 hours; and
(2) Submit a relocation application to the Board within 30 days.
C. A relocation applicant:
(1) If located in this State, shall request an opening inspection of the Board;
(2) If the applicant holds products, shall comply with Regulation .07 of this chapter; and
(3) Shall indicate on the relocation application changes in product or personnel from the original application to the Board.
D. New personnel shall be required to undergo a criminal history records check as set forth in Regulation .03 of this chapter.
E. A relocation applicant located in another state shall provide to the Board:
(1) Evidence of notification to the accreditation organization that accredited the relocation applicant for deemed status; or
(2) If the relocation applicant is not accredited by an accreditation organization, subsequent inspection reports from the state in which the relocation applicant is located.
JOSHUA M. SHARFSTEIN, M.D.
Secretary of Health and Mental Hygiene