AB1013: Bill Text

LRB-3021/2

PJH:kjf:rs

2005 - 2006 LEGISLATURE

2005 Assembly BILL 1013

February 10, 2006 - Introduced by Representatives Montgomery, Underheim, Krawczyk, Hines, Bies, Mursau, Musser, Ott, Hundertmark, Vos, Moulton, Towns and Albers, cosponsored by Senators Roessler, Harsdorf and Kanavas. Referred to Committee on Health.

AB1013,1,6 An Act to repeal 450.07 (2) and 450.07 (3); to amend 450.01 (9) and 450.07 (title); and to create 450.01 (1m), 450.01 (2m), 450.01 (11m), 450.01 (11r), 450.01 (13r), 450.01 (14m), 450.01 (21m), 450.01 (23), 450.01 (24), 450.071, 450.072, 450.073 and 450.074 of the statutes; relating to: the wholesale distribution of prescription drugs, granting rule-making authority, and providing a penalty.

Analysis by the Legislative Reference Bureau

This bill regulates the wholesale distribution of prescription drugs. Under the bill, a "wholesale distributor" means a person engaged in the wholesale distribution of prescription drugs, including but not limited to repackagers, own-label distributors, private label distributors, jobbers, brokers, warehouses, including manufacturers' and distributors' warehouses, and drug wholesalers or distributors, independent wholesale drug traders, and retail pharmacies or chain pharmacy warehouses that conduct wholesale distribution. Wholesale distribution does not include: intracompany sales of prescription drugs; the administration, delivery, dispensing, sale, purchase, distribution, trade, or transfer of a prescription drug or offer to sell, purchase, distribute, trade, or transfer a prescription drug for emergency medical reasons; the distribution of prescription drug samples by a manufacturer's representative; drug returns, when conducted by a hospital, health care facility, or charitable institution; the sale of minimal quantities of prescription drugs by retail franchises to licensed health care providers for office use; the practice of pharmacy; or the sale, transfer, merger, or consolidation of all or part of the business of a pharmacy or pharmacies from or with another pharmacy or pharmacies, whether accomplished as a purchase and sale of stock or business assets.

The bill requires the Pharmacy Examining Board (the board) to license wholesale distributors, inspect wholesale distribution facilities, and investigate and approve the designated representative of a wholesale distributor. Once licensed, a wholesale distributor is required to create and maintain records of each prescription drug transaction it undertakes.

Each wholesale distributor shall establish and maintain an inventory and record (a pedigree) of all transactions regarding the receipt and distribution or other disposition of a prescription drug. A pedigree must contain all necessary identifying information concerning each sale or point of distribution in the chain of the distribution of the prescription drug from the manufacturer until final sale or distribution to a pharmacy or a person dispensing or distributing the prescription drug. Each pedigree must be maintained by the final recipient in the chain of distribution and by the wholesale distributor for three years from the date of sale or distribution.

Under the bill, a person who distributes a prescription drug without the appropriate licensure or without maintaining a proper pedigree is guilty of a Class E felony, and may be fined up to $50,000 and imprisoned for up to 15 years or both. A person who intentionally does the same is guilty of a Class D felony and may be fined up to $100,000 and imprisoned for up to 25 years or both.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report concerning the proposed penalty and the costs or savings that are likely to result if the bill is enacted.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB1013, s. 1 Section 1. 450.01 (1m) of the statutes is created to read:

AB1013,2,3 450.01 (1m) "Authentication" means verification, before distributing a prescription drug, that each transaction listed on a pedigree has occurred.

AB1013, s. 2 Section 2. 450.01 (2m) of the statutes is created to read:

AB1013,3,2 450.01 (2m) "Chain pharmacy warehouse" means a physical location for drugs or devices that acts as a central warehouse and performs intracompany sales or transfers of the drugs or devices to a group of chain pharmacies that have the same common ownership and control.

AB1013, s. 3 Section 3. 450.01 (9) of the statutes is amended to read:

AB1013,3,5 450.01 (9) "Distributor" means a person licensed by the board under s. 450.07 (2) 450.071.

AB1013, s. 4 Section 4. 450.01 (11m) of the statutes is created to read:

AB1013,3,8 450.01 (11m) "Facility" means a facility of a wholesale distributor where prescription drugs are stored, handled, repackaged, or offered for sale.

AB1013, s. 5 Section 5. 450.01 (11r) of the statutes is created to read:

AB1013,3,12 450.01 (11r) "Intracompany sales" means any transaction or transfer between any division, subsidiary, parent, or affiliated or related company under common ownership and control of a corporate entity.

AB1013, s. 6 Section 6. 450.01 (13r) of the statutes is created to read:

AB1013,3,16 450.01 (13r) "Normal distribution channel" means a chain of custody for a medication that goes from a manufacturer to a wholesale distributor to a pharmacy or a chain pharmacy warehouse to a patient.

AB1013, s. 7 Section 7. 450.01 (14m) of the statutes is created to read:

AB1013,3,20 450.01 (14m) "Pedigree" means a document or electronic file containing information that records each distribution of a prescription drug within the distribution channel.

AB1013, s. 8 Section 8. 450.01 (21m) of the statutes is created to read:

AB1013,3,25 450.01 (21m) "Repackage" means to repack or otherwise change the container, wrapper, or label of a prescription drug. Repackaging does not include the administration, delivery, or distribution of a prescription drug by a pharmacist to a patient.

AB1013, s. 9 Section 9. 450.01 (23) of the statutes is created to read:

AB1013,4,2 450.01 (23) "Wholesale distribution" does not include:

AB1013,4,3 (a) Intracompany sales of prescription drugs.

AB1013,4,6 (b) The administration, delivery, dispensing, sale, purchase, distribution, trade, or transfer of a prescription drug or offer to sell, purchase, distribute, trade, or transfer a prescription drug for emergency medical reasons.

AB1013,4,8 (c) The distribution of prescription drug samples by a manufacturer's representative.

AB1013,4,10 (d) Drug returns, when conducted by a hospital, health care facility, or charitable institution.

AB1013,4,12 (e) The sale of minimal quantities of prescription drugs by retail franchises to licensed health care providers for office use.

AB1013,4,13 (f) The practice of pharmacy.

AB1013,4,16 (g) The sale, transfer, merger, or consolidation of all or part of the business of a pharmacy or pharmacies from or with another pharmacy or pharmacies, whether accomplished as a purchase and sale of stock or business assets.

AB1013, s. 10 Section 10. 450.01 (24) of the statutes is created to read:

AB1013,4,23 450.01 (24) "Wholesale distributor" means a person engaged in the wholesale distribution of prescription drugs, including but not limited to repackagers, own-label distributors, private label distributors, jobbers, brokers, warehouses, including manufacturers' and distributors' warehouses, and drug wholesalers or distributors, independent wholesale drug traders, and retail pharmacies or chain pharmacy warehouses that conduct wholesale distribution.

AB1013, s. 11 Section 11. 450.07 (title) of the statutes is amended to read:

AB1013,4,25 450.07 (title) Manufacturers and distributors; licensure.

AB1013, s. 12 Section 12. 450.07 (2) of the statutes is repealed.

AB1013, s. 13 Section 13. 450.07 (3) of the statutes is repealed.

AB1013, s. 14 Section 14. 450.071 of the statutes is created to read:

AB1013,5,9 450.071 Wholesale distributors; licensure. (1) No person may engage in the wholesale distribution of a prescription drug in this state without obtaining a license from the board. The board shall exempt manufacturers from licensing and other requirements under this section to the extent the license or requirement is not required under federal law or regulation or unless the board determines that it is necessary to apply a requirement to a manufacturer.

AB1013,5,11 (2) An applicant shall submit a form provided by the board showing all of the following and swear or affirm the truthfulness of each item in the application: