2005 California Business and Professions Code Sections 4160-4169 Article 11. Wholesalers and Manufacturers

4160.  (a) A person may not act as a wholesaler of any dangerous
drug or dangerous device unless he or she has obtained a license from
the board.
   (b) Upon approval by the board and the payment of the required
fee, the board shall issue a license to the applicant.
   (c) A separate license shall be required for each place of
business owned or operated by a wholesaler.  Each license shall be
renewed annually and shall not be transferable.
   (d) The board shall not issue or renew a wholesaler license until
the wholesaler identifies a designated representative-in-charge and
notifies the board in writing of the identity and license number of
that designated representative.  The designated
representative-in-charge shall be responsible for the wholesaler's
compliance with state and federal laws governing wholesalers.  A
wholesaler shall identify and notify the board of a new designated
representative-in-charge within 30 days of the date that the prior
designated representative-in-charge ceases to be the designated
representative-in-charge.  A pharmacist may be identified as the
designated representative-in-charge.
   (e) A drug manufacturer licensed by the Food and Drug
Administration or licensed pursuant to Section 111615 of the Health
and Safety Code that only distributes dangerous drugs and dangerous
devices of its own manufacture is exempt from this section and
Section 4161.
   (f) The board may issue a temporary license, upon conditions and
for periods of time as the board determines to be in the public
interest.  A temporary license fee shall be fixed by the board at an
amount not to exceed the annual fee for renewal of a license to
conduct business as a wholesaler.
   (g) This section shall become operative on January 1, 2006.
4161.  (a) A person located outside this state that ships, mails, or
delivers dangerous drugs or dangerous devices into this state shall
be considered a nonresident wholesaler.
   (b) A nonresident wholesaler shall be licensed by the board prior
to shipping, mailing, or delivering dangerous drugs or dangerous
devices to a site located in this state.
   (c) A separate license shall be required for each place of
business owned or operated by a nonresident wholesaler from or
through which dangerous drugs or dangerous devices are shipped,
mailed, or delivered to a site located in this state. A license shall
be renewed annually and shall not be transferable.
   (d) The following information shall be reported, in writing, to
the board at the time of initial application for licensure by a
nonresident wholesaler, on renewal of a nonresident wholesaler
license, or within 30 days of a change in that information:
   (1) Its agent for service of process in this state.
   (2) Its principal corporate officers, as specified by the board,
if any.
   (3) Its general partners, as specified by the board, if any.
   (4) Its owners if the applicant is not a corporation or
partnership.
   (e) A report containing the information in subdivision (d) shall
be made within 30 days of any change of ownership, office, corporate
officer, or partner.
   (f) A nonresident wholesaler shall comply with all directions and
requests for information from the regulatory or licensing agency of
the state in which it is licensed, as well as with all requests for
information made by the board.
   (g) A nonresident wholesaler shall maintain records of dangerous
drugs and dangerous devices sold, traded, or transferred to persons
in this state, so that the records are in a readily retrievable form.
   (h) A nonresident wholesaler shall at all times maintain a valid,
unexpired license, permit, or registration to conduct the business of
the wholesaler in compliance with the laws of the state in which it
is a resident. An application for a nonresident wholesaler license in
this state shall include a license verification from the licensing
authority in the applicant's state of residence.
   (i) The board may not issue or renew a nonresident wholesaler
license until the nonresident wholesaler identifies a designated
representative-in-charge and notifies the board in writing of the
identity and license number of the designated
representative-in-charge.
   (j) The designated representative-in-charge shall be responsible
for the nonresident wholesaler's compliance with state and federal
laws governing wholesalers. A nonresident wholesaler shall identify
and notify the board of a new designated representative-in-charge
within 30 days of the date that the prior designated
representative-in-charge ceases to be the designated
representative-in-charge.
   (k) The board may issue a temporary license, upon conditions and
for periods of time as the board determines to be in the public
interest. A temporary license fee shall be fixed by the board at an
amount not to exceed the annual fee for renewal of a license to
conduct business as a nonresident wholesaler.
   (l) The registration fee shall be the fee specified in subdivision
(f) of Section 4400.
4162.  (a) (1) An applicant for the issuance or renewal of a
wholesaler license shall submit a surety bond of one hundred thousand
dollars ($100,000) or other equivalent means of security acceptable
to the board payable to the Pharmacy Board Contingent Fund.  The
purpose of the surety bond is to secure payment of any administrative
fine imposed by the board and any cost recovery ordered pursuant to
Section 125.3.
   (2) For purposes of paragraph (1), the board may accept a surety
bond less than one hundred thousand dollars ($100,000) if the annual
gross receipts of the previous tax year for the wholesaler is ten
million dollars ($10,000,000) or less, in which case the surety bond
shall be twenty-five thousand dollars ($25,000).
   (3) A person to whom an approved new drug application has been
issued by the United States Food and Drug Administration who engages
in the wholesale distribution of only the dangerous drug specified in
the new drug application, and is licensed or applies for licensure
as a wholesaler, shall not be required to post a surety bond as
provided in paragraph (1).
   (4) For  licensees subject to paragraph (2) or (3), the board may
require a bond up to one hundred thousand dollars ($100,000) for any
licensee who has been disciplined by any state or federal agency or
has been issued an administrative fine pursuant to this chapter.
   (b) The board may make a claim against the bond if the licensee
fails to pay a fine within 30 days after the order imposing the fine,
or costs become final.
   (c) A single surety bond or other equivalent means of security
acceptable to the board shall satisfy the requirement of subdivision
(a) for all licensed sites under common control as defined in Section
4126.5.
   (d) This section shall become operative on January 1, 2006, and
shall remain in effect only until January 1, 2011, and as of that
date is repealed, unless a later enacted statute, that is enacted
before January 1, 2011, deletes or extends those dates.
4162.5.  (a) (1) An applicant for the issuance or renewal of a
nonresident wholesaler license shall submit a surety bond of one
hundred thousand dollars ($100,000), or other equivalent means of
security acceptable to the board, such as an irrevocable letter of
credit, or a deposit in a trust account or financial institution,
payable to the Pharmacy Board Contingent Fund. The purpose of the
surety bond is to secure payment of any administrative fine imposed
by the board and any cost recovery ordered pursuant to Section 125.3.
   (2) For purpose of paragraph (1), the board may accept a surety
bond less than one hundred thousand dollars ($100,000) if the annual
gross receipts of the previous tax year for the nonresident
wholesaler is ten million dollars ($10,000,000) or less in which the
surety bond shall be twenty-five thousand dollars ($25,000).
   (3) For applicants who satisfy paragraph (2), the board may
require a bond up to one hundred thousand dollars ($100,000) for any
nonresident wholesaler who has been disciplined by any state or
federal agency or has been issued an administrative fine pursuant to
this chapter.
   (4) A person to whom an approved new drug application has been
issued by the United States Food and Drug Administration who engages
in the wholesale distribution of only the dangerous drug specified in
the new drug application, and is licensed or applies for licensure
as a nonresident wholesaler, shall not be required to post a surety
bond as provided in this section.
   (b) The board may make a claim against the bond if the licensee
fails to pay a fine within 30 days of the issuance of the fine or
when the costs become final.
   (c) A single surety bond or other equivalent means of security
acceptable to the board shall satisfy the requirement of subdivision
(a) for all licensed sites under common control as defined in Section
4126.5.
   (d) This section shall become operative on January 1, 2006, and
shall become inoperative and is repealed on, January 1, 2011, unless
a later enacted statute, that is enacted before January 1, 2011,
deletes or extends those dates.
4163.  (a) No manufacturer or wholesaler shall furnish any dangerous
drugs or dangerous devices to any unauthorized persons.
   (b) No person shall acquire dangerous drugs or dangerous devices
from a person not authorized by law to possess or furnish those
dangerous drugs or dangerous devices.  When the person acquiring the
dangerous drugs or dangerous devices is a wholesaler, the obligation
of the wholesaler shall be limited to obtaining confirmation of
licensure of those sources from whom it has not previously acquired
dangerous drugs or dangerous devices.
   (c) This section shall remain in effect only until January 1,
2007, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2007, deletes or extends
that date.
4163.  (a) A manufacturer or wholesaler may not furnish a dangerous
drug or dangerous device to an unauthorized person.
   (b) Dangerous drugs or dangerous devices shall be acquired from a
person authorized by law to possess or furnish dangerous drugs or
dangerous devices.  When the person acquiring the dangerous drugs or
dangerous devices is a wholesaler, the obligation of the wholesaler
shall be limited to obtaining confirmation of licensure of those
sources from whom it has not previously acquired dangerous drugs or
dangerous devices.
   (c) A wholesaler or pharmacy may not sell, trade, or transfer a
dangerous drug at wholesale without providing a pedigree.
   (d) A wholesaler or pharmacy may not acquire a dangerous drug
without receiving a pedigree.
   (e) This section shall become operative on January 1, 2007.
4163.5.  The board may extend the date for compliance with the
requirement for a pedigree set forth in Section 4163 until January 1,
2008, if it determines that manufacturers or wholesalers require
additional time to implement electronic technologies to track the
distribution of dangerous drugs within the state.  A determination by
the board to extend the deadline for providing pedigrees shall not
be subject to the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
4163.6.  If the  Legislature determines that it is not yet
economically and technically feasible for pharmacies to implement
electronic technologies to track the distribution of dangerous drugs
within the state, the  Legislature may extend the date for compliance
with the requirement for a pedigree for pharmacies set forth in
Section 4163 until January 1, 2009.
4164.  (a) A wholesaler licensed by the board that distributes
controlled substances, dangerous drugs, or dangerous devices within
or into this state shall report to the board all sales of dangerous
drugs and controlled substances that are subject to abuse, as
determined by the board.
   (b) Each wholesaler shall develop and maintain a system for
tracking individual sales of dangerous drugs at preferential or
contract prices to pharmacies that primarily or solely dispense
prescription drugs to patients of long-term care facilities.  The
system shall be capable of identifying purchases  of any dangerous
drug at preferential or contract prices by customers that vary
significantly from prior ordering patterns for the same customer,
including by identifying purchases in the preceding 12 calendar
months by that customer or similar customers and identifying current
purchases that exceed prior purchases by either that customer or
similar customers by a factor of 20 percent.  Each wholesaler shall
have the tracking system required by this subdivision in place no
later than January 1, 2006.
   (c) Upon written, oral, or electronic request by the board, a
wholesaler shall furnish  data tracked pursuant to subdivision (b) to
the board in written, hardcopy, or electronic form.  The board shall
specify the dangerous drugs, the customers, or both the dangerous
drugs and customers for which data are to be furnished, and the
wholesaler shall have 30 calendar days to comply with the request.
   (d) As used in this section, "preferential or contract prices"
means and refers to purchases by contract of dangerous drugs at
prices below the market wholesale price for those drugs.
   (e) This section shall become operative on January 1, 2006.
4165.  A wholesaler licensed by the board who sells or transfers any
dangerous drug or dangerous device into this state or who receives,
by sale or otherwise, any dangerous drug or dangerous device from any
person in this state shall, on request, furnish an authorized
officer of the law with all records or other documentation of that
sale or transfer.
4166.  (a) Any wholesaler that uses the services of any carrier,
including, but not limited to, the United States Postal Service or
any common carrier, shall be liable for the security and integrity of
any dangerous drugs or dangerous devices through that carrier until
the drugs or devices are delivered to the transferee at its
board-licensed premises.
   (b) Nothing in this section is intended to affect the liability of
a wholesaler or other distributor for dangerous drugs or dangerous
devices after their delivery to the transferee.
4167.  A wholesaler shall not obtain, by purchase or otherwise, any
dangerous drugs or dangerous devices that it cannot maintain, in a
secure manner, on the premises licensed by the board.
4168.  A county or municipality may not issue a business license for
any establishment that requires a wholesaler license unless the
establishment possesses a current wholesaler license issued by the
board.  For purposes of this section, an "establishment" is the
licensee's physical location in California.
4169.  (a) A person or entity may not do any of the following:
   (1) Purchase, trade, sell, or transfer dangerous drugs or
dangerous devices at wholesale with a person or entity that is not
licensed with the board as a wholesaler or pharmacy, in violation of
Section 4163.
   (2) Purchase, trade, sell, or transfer dangerous drugs that the
person knew or reasonably should have known were adulterated, as set
forth in Article 2 (commencing with Section 111250) of Chapter 6 of
Part 5 of Division 104 of the Health and Safety Code.
   (3) Purchase, trade, sell, or transfer dangerous drugs that the
person knew or reasonably should have known were misbranded, as
defined in Section 111335 of the Health and Safety Code.
   (4) Purchase, trade, sell, or transfer dangerous drugs or
dangerous devices after the beyond use date on the label.
   (5) Fail to maintain records of the acquisition or disposition of
dangerous drugs or dangerous devices for at least three years.
   (b) Notwithstanding any other provision of law, a violation of
this section may subject the person or entity that has committed the
violation to a fine not to exceed the amount specified in Section
125.9 for each occurrence, pursuant to a citation issued by the
board.
   (c) Amounts due from any person under this section shall be offset
as provided under Section 12419.5 of the Government Code.  Amounts
received by the board under this section shall be deposited into the
Pharmacy Board Contingent Fund.
   (d) This section shall not apply to a pharmaceutical manufacturer
licensed by the Food and Drug Administration or by the State
Department of Health Services.
   (e) This section shall remain in effect only until January 1,
2007, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2007, deletes or extends
that date.
4169.  (a) A person or entity may not do any of the following:
   (1) Purchase, trade, sell, or transfer dangerous drugs or
dangerous devices at wholesale with a person or entity that is not
licensed with the board as a wholesaler or pharmacy.
   (2) Purchase, trade, sell, or transfer dangerous drugs that the
person knew or reasonably should have known were adulterated, as set
forth in Article 2 (commencing with Section 111250) of Chapter 6 of
Part 5 of Division 104 of the Health and Safety Code.
   (3) Purchase, trade, sell, or transfer dangerous drugs that the
person knew or reasonably should have known were misbranded, as
defined in Section 111335 of the Health and Safety Code.
   (4) Purchase, trade, sell, or transfer dangerous drugs or
dangerous devices after the beyond use date on the label.
   (5) Fail to maintain records of the acquisition or disposition of
dangerous drugs or dangerous devices for at least three years.
   (b) Notwithstanding any other provision of law, a violation of
this section or of subdivision (c) or (d) of Section 4163 may subject
the person or entity that has committed the violation to a fine not
to exceed the amount specified in Section 125.9 for each occurrence,
pursuant to a citation issued by the board.
   (c) Amounts due from any person under this section shall be offset
as provided under Section 12419.5 of the Government Code.  Amounts
received by the board under this section shall be deposited into the
Pharmacy Board Contingent Fund.
   (d) This section shall not apply to a pharmaceutical manufacturer
licensed by the Food and Drug Administration or by the State
Department of Health Services.
   (e) This section shall become operative on January 1, 2007.