AB1013,1,6 1An Act to repeal 450.07 (2) and 450.07 (3); to amend 450.01 (9) and 450.07
2(title); and to create 450.01 (1m), 450.01 (2m), 450.01 (11m), 450.01 (11r),
3450.01 (13r), 450.01 (14m), 450.01 (21m), 450.01 (23), 450.01 (24), 450.071,
4450.072, 450.073 and 450.074 of the statutes; relating to: the wholesale
5distribution of prescription drugs, granting rule-making authority, and
6providing 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 1Section 1. 450.01 (1m) of the statutes is created to read:
AB1013,2,32 450.01 (1m) "Authentication" means verification, before distributing a
3prescription drug, that each transaction listed on a pedigree has occurred.
AB1013, s. 2 4Section 2. 450.01 (2m) of the statutes is created to read:
AB1013,3,25 450.01 (2m) "Chain pharmacy warehouse" means a physical location for drugs
6or devices that acts as a central warehouse and performs intracompany sales or

1transfers of the drugs or devices to a group of chain pharmacies that have the same
2common ownership and control.
AB1013, s. 3 3Section 3. 450.01 (9) of the statutes is amended to read:
AB1013,3,54 450.01 (9) "Distributor" means a person licensed by the board under s. 450.07
5(2)
450.071.
AB1013, s. 4 6Section 4. 450.01 (11m) of the statutes is created to read:
AB1013,3,87 450.01 (11m) "Facility" means a facility of a wholesale distributor where
8prescription drugs are stored, handled, repackaged, or offered for sale.
AB1013, s. 5 9Section 5. 450.01 (11r) of the statutes is created to read:
AB1013,3,1210 450.01 (11r) "Intracompany sales" means any transaction or transfer between
11any division, subsidiary, parent, or affiliated or related company under common
12ownership and control of a corporate entity.
AB1013, s. 6 13Section 6. 450.01 (13r) of the statutes is created to read:
AB1013,3,1614 450.01 (13r) "Normal distribution channel" means a chain of custody for a
15medication that goes from a manufacturer to a wholesale distributor to a pharmacy
16or a chain pharmacy warehouse to a patient.
AB1013, s. 7 17Section 7. 450.01 (14m) of the statutes is created to read:
AB1013,3,2018 450.01 (14m) "Pedigree" means a document or electronic file containing
19information that records each distribution of a prescription drug within the
20distribution channel.
AB1013, s. 8 21Section 8. 450.01 (21m) of the statutes is created to read:
AB1013,3,2522 450.01 (21m) "Repackage" means to repack or otherwise change the container,
23wrapper, or label of a prescription drug. Repackaging does not include the
24administration, delivery, or distribution of a prescription drug by a pharmacist to a
25patient.
AB1013, s. 9
1Section 9. 450.01 (23) of the statutes is created to read:
AB1013,4,22 450.01 (23) "Wholesale distribution" does not include:
AB1013,4,33 (a) Intracompany sales of prescription drugs.
AB1013,4,64 (b) The administration, delivery, dispensing, sale, purchase, distribution,
5trade, or transfer of a prescription drug or offer to sell, purchase, distribute, trade,
6or transfer a prescription drug for emergency medical reasons.
AB1013,4,87 (c) The distribution of prescription drug samples by a manufacturer's
8representative.
AB1013,4,109 (d) Drug returns, when conducted by a hospital, health care facility, or
10charitable institution.
AB1013,4,1211 (e) The sale of minimal quantities of prescription drugs by retail franchises to
12licensed health care providers for office use.
AB1013,4,1313 (f) The practice of pharmacy.
AB1013,4,1614 (g) The sale, transfer, merger, or consolidation of all or part of the business of
15a pharmacy or pharmacies from or with another pharmacy or pharmacies, whether
16accomplished as a purchase and sale of stock or business assets.
AB1013, s. 10 17Section 10. 450.01 (24) of the statutes is created to read:
AB1013,4,2318 450.01 (24) "Wholesale distributor" means a person engaged in the wholesale
19distribution of prescription drugs, including but not limited to repackagers,
20own-label distributors, private label distributors, jobbers, brokers, warehouses,
21including manufacturers' and distributors' warehouses, and drug wholesalers or
22distributors, independent wholesale drug traders, and retail pharmacies or chain
23pharmacy warehouses that conduct wholesale distribution.
AB1013, s. 11 24Section 11. 450.07 (title) of the statutes is amended to read:
AB1013,4,25 25450.07 (title) Manufacturers and distributors; licensure.
AB1013, s. 12
1Section 12. 450.07 (2) of the statutes is repealed.
AB1013, s. 13 2Section 13. 450.07 (3) of the statutes is repealed.
AB1013, s. 14 3Section 14. 450.071 of the statutes is created to read:
AB1013,5,9 4450.071 Wholesale distributors; licensure. (1) No person may engage in
5the wholesale distribution of a prescription drug in this state without obtaining a
6license from the board. The board shall exempt manufacturers from licensing and
7other requirements under this section to the extent the license or requirement is not
8required under federal law or regulation or unless the board determines that it is
9necessary to apply a requirement to a manufacturer.
AB1013,5,11 10(2) An applicant shall submit a form provided by the board showing all of the
11following and swear or affirm the truthfulness of each item in the application:
AB1013,5,1212 (a) The name, business address, and telephone number of the applicant.
AB1013,5,1313 (b) All trade or business names used by the applicant.
AB1013,5,1614 (c) Names, addresses, and telephone numbers of contact persons for all
15facilities used by the applicant for the storage, handling, and distribution of
16prescription drugs.
AB1013,5,1717 (d) The type of ownership or operation for the applicant's business.
AB1013,5,2018 (e) If the applicant's wholesale distribution business is a partnership, the
19name, address, title, and telephone number of each partner, and the name of the
20partnership.
AB1013,5,2321 (f) If the applicant's wholesale distribution business is a corporation, the name,
22address, title, and telephone number of each corporate officer and director, the name
23of the corporation, and the state of incorporation.
AB1013,5,2524 (g) If the applicant's wholesale distribution business is a sole proprietorship,
25the name of the sole proprietor and the name of the business entity.
AB1013,6,2
1(h) A list of all licenses and permits issued to the applicant by any other state
2that authorizes the applicant to purchase or possess prescription drugs.
AB1013,6,33 (i) The name, address, and telephone number of a designated representative.
AB1013,6,54 (j) For the person listed in par. (i), a personal information statement that
5contains all of the following:
AB1013,6,66 1. The person's date and place of birth.
AB1013,6,77 2. The person's places of residence for the past 7 years.
AB1013,6,98 3. The person's occupations, positions of employment, and offices held during
9the past 7 years.
AB1013,6,1110 4. The name and addresses for each business, corporation, or other entity listed
11in subd. 3.
AB1013,6,1412 5. A statement regarding whether the person has been, during the past 7 years,
13the subject of any proceeding for the revocation of any license or been prosecuted for
14any criminal offense, and the disposition of the proceeding or prosecution.
AB1013,6,1815 6. A statement regarding whether the person has been, during the past 7 years,
16enjoined, either temporarily or permanently, from possessing, controlling, or
17distributing any prescription drug, and a description of the circumstances
18surrounding the injunction.
AB1013,6,2319 7. A description of any involvement by the person with any business, including
20investments, other than the ownership of stock in a publicly traded company or
21mutual fund, during the past 7 years, that manufactured, administered, prescribed,
22distributed, or stored pharmaceutical products or drugs, and a list of any lawsuits
23in which such a business was named as a party.
AB1013,6,2424 8. A photograph of the person taken within the previous 30 days.
AB1013,7,3
1(3) Upon receipt of the application and information required in sub. (2), the
2board shall conduct a physical inspection of the facility from which the applicant
3intends to engage in the wholesale distribution of prescription drugs.
AB1013,7,7 4(4) The board shall grant a license to the applicant to engage in the wholesale
5distribution of prescription drugs if the inspection conducted pursuant to sub. (3)
6satisfies requirements adopted by the board for wholesale distribution facilities and
7if the designated representative listed by applicant:
AB1013,7,88 (a) Is at least 21 years old.
AB1013,7,119 (b) Has been employed full time for at least 3 years in a pharmacy or with a
10wholesale prescription drug distributor in a capacity related to the administration,
11dispensing, and distribution of, and record keeping related to, prescription drugs.
AB1013,7,1412 (c) Has received a score of 75 percent or more on an examination designed and
13administered by the board that tests the applicant's knowledge of state and federal
14laws regarding the wholesale distribution of prescription drugs.
AB1013,7,1515 (d) Is employed by the applicant full time in a managerial level position.
AB1013,7,2116 (e) Is physically present at the wholesale prescription drug distributor's facility
17during regular business hours and is involved in and aware of the daily operation of
18the wholesale prescription drug distributor. This paragraph does not preclude the
19designated representative from taking authorized sick leave and vacation time or
20from being absent from the facility for other authorized business or personal
21purposes.
AB1013,7,2222 (f) Is a designated representative for only one applicant at any given time.
AB1013,7,2523 (g) Has not been convicted of violating any federal, state, or local law relating
24to wholesale or retail prescription drug distribution or distribution of a controlled
25substance.
AB1013,8,1
1(h) Has not been convicted of a felony.
AB1013,8,62 (i) Submits to the department 2 fingerprint cards, each bearing a complete set
3of the applicant's fingerprints. The department of justice may provide for the
4submission of the fingerprint cards to the federal bureau of investigation for the
5purposes of verifying the identification of the applicant and obtaining the applicant's
6criminal arrest and conviction record.
AB1013,8,8 7(5) The board may set, by rule, continuing education requirements for
8designated representatives under this section.
AB1013,8,11 9(6) The board shall require every wholesale distributor to submit a surety bond
10acceptable to the board of at least $100,000 or other equivalent means of security
11acceptable to the board.
AB1013, s. 15 12Section 15. 450.072 of the statutes is created to read:
AB1013,8,19 13450.072 Wholesale distributors; restrictions on transactions. (1) A
14wholesale distributor shall receive prescription drug returns or exchanges from a
15pharmacy or chain pharmacy warehouse pursuant to the terms and conditions of the
16agreement between the wholesale distributor and the pharmacy or chain pharmacy
17warehouse. Returns or exchanges made under this section shall not be subject to the
18requirements of s. 450.073, but no wholesale distributor shall permit the entry of
19adulterated or counterfeit product during a return or exchange of product.
AB1013,8,24 20(2) (a) A manufacturer or wholesale distributor may distribute a prescription
21drug only to the premises listed on the person's license or authorization, except that
22a manufacturer or wholesale distributor may distribute the prescription drugs to an
23authorized agent of the person at the premises of the manufacturer or wholesale
24distributor if all of the following are true:
AB1013,9,2
11. The manufacturer or wholesale distributor documents the authorized
2agent's name and address.
AB1013,9,43 2. This method of distribution is necessary to promote or protect the immediate
4health or safety of the authorized agent's patient.
AB1013,9,85 (b) A manufacturer or wholesale distributor may distribute a prescription drug
6to a hospital pharmacy receiving area if a licensed pharmacist or another authorized
7recipient signs, at the time of the distribution, a receipt that shows the type and
8quantity of prescription drugs distributed.
AB1013,9,149 (c) No manufacturer or wholesale distributor may accept payment for, or allow
10the use of, a person's credit to establish an account for the purchase of a prescription
11drug from any person other than the owner of record, the chief executive officer, or
12the chief financial officer listed on the license or authorization of a person who may
13receive prescription drugs. Any account established for the purchase of prescription
14drugs shall bear the name of the licensed or authorized person.
AB1013, s. 16 15Section 16. 450.073 of the statutes is created to read:
AB1013,9,23 16450.073 Wholesale distributors; pedigree. (1) Each wholesale distributor
17shall establish and maintain an inventory and record of all transactions regarding
18the receipt and distribution or other disposition of a prescription drug. The records
19shall include a pedigree for each prescription drug that leaves the normal
20distribution channel. This section does not apply to a retail pharmacy or a chain
21pharmacy warehouse unless the pharmacy or chain pharmacy warehouse engages
22in the wholesale distribution of prescription drugs. This section also does not apply
23to a transfer from a manufacturer's warehouse to a wholesale distributor.
AB1013,9,25 24(2) A pedigree shall contain all necessary identifying information concerning
25each sale or point of distribution in the chain of the distribution of the prescription

1drug from the manufacturer until final sale or distribution to a pharmacy or a person
2dispensing or distributing the prescription drug. At a minimum, the pedigree shall
3include:
AB1013,10,64 (a) The name, address, telephone number, and, if available, electronic mail
5address of each recipient or distributor of the prescription drug in the chain of
6distribution, until the final sale or distribution that is described in sub. (2) (intro.).
AB1013,10,87 (b) The address of each location from which the prescription drug was
8distributed, if different from the address provided in par. (a).
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