43-15.3-01. Definitions

43-15.3-01. Definitions

As used in this chapter, unless the context otherwise requires:

1. "Authentication" means to affirmatively verify before any wholesale distribution of a

prescription drug occurs that each transaction listed on the pedigree has occurred.

2. "Authorized distributor of record" means a wholesale distributor or a third-party

logistics provider with whom a manufacturer has established an ongoing relationship

to distribute the manufacturer's prescription drug. An ongoing relationship is deemed to

exist between the third-party logistics provider and the manufacturer or between the

wholesale distributor and a manufacturer when the third-party logistics provider or the

wholesale distributor, including any affiliated group of the wholesale distributor as

defined in section 1504 of the Internal Revenue Code [26 U.S.C. 1504], complies with

the following:

a. The wholesale distributor or a third-party logistics provider has a written

agreement currently in effect with the manufacturer evidencing the ongoing

relationship; and

b. The wholesale distributor or a third-party logistics provider is listed on the

manufacturer's current list of authorized distributors of record, which is updated

by the manufacturer on no less than a monthly basis.

3. "Board" means the state board of pharmacy.

4. "Broker" means a party that mediates between a buyer and a seller the sale or

shipment of prescription drugs, medical gases, or medical equipment.

5. "Chain pharmacy warehouse" means a physical location for prescription drugs,

medical gases, or medical equipment which acts as a central warehouse and performs

intracompany sales or transfers of the drugs, gases, or equipment to a group of chain

pharmacies that have the same common ownership and control.

6. "Colicensed product" means a prescription drug, medical gas, or medical equipment in

which two or more parties have the right to engage in the manufacturing or marketing

or in the manufacturing and marketing of the drug, gas, or equipment.

7. "Device" means an instrument, apparatus, implement, machine, contrivance, implant,

in vitro reagent, or other similar or related article, including any component, part, or

accessory which:

a. Is recognized in the United States pharmacopeia or the official national formulary

is intended for use in the diagnosis of disease or other conditions or in the cure,

mitigation, treatment, or prevention of disease, in humans or other animals, or is

intended to affect the structure or any function of the body of humans or other

animals;

b. Does not achieve its primary intended purposes through chemical action within or

on the body of a human or other animal; and

c. Is not dependent upon being metabolized for the achievement of its primary

intended purposes.

8. "Drop shipment" means the sale of a prescription drug, medical gas, or medical

equipment to a wholesale distributor by the manufacturer of the prescription drug,

medical gas, or medical equipment or to that manufacturer's colicensed product

partner, that manufacturer's third-party logistics provider, or that manufacturer's

exclusive distributor, under the terms of which the wholesale distributor or chain

pharmacy warehouse takes title but not physical possession of the prescription drug,

medical gas, or medical equipment and the wholesale distributor invoices the

pharmacy or chain pharmacy warehouse, or other person authorized by law to

dispense or administer the drug, gas, or equipment to a patient, and the pharmacy or

chain pharmacy warehouse or other authorized person receives delivery of the

prescription drug, medical gas, or medical equipment directly from the manufacturer,

or that manufacturer's third-party logistics provider, or that manufacturer's exclusive

distributor.

9. "Durable medical equipment" means medical devices, equipment, or supplies that may

be used in a residence, including oxygen and oxygen delivery systems and supplies,

thorized person receives delivery of the

prescription drug, medical gas, or medical equipment directly from the manufacturer,

or that manufacturer's third-party logistics provider, or that manufacturer's exclusive

distributor.

9. "Durable medical equipment" means medical devices, equipment, or supplies that may

be used in a residence, including oxygen and oxygen delivery systems and supplies,

ventilators, respiratory disease management devices, continuous positive airway

pressure (CPAP) devices, electronic and computerized wheelchairs and seating

systems, apnea monitors, transcutaneous medical nerve stimulator (TENS) units, low

air cutaneous pressure management devices, sequential compression devices,

feeding pumps, home phototherapy devices, infusion delivery devices, distribution of

medical gases to end users for human consumption, hospital beds, nebulizers, and

other similar equipment as may be determined by the board by rule.

10. "Facility" means a facility of a wholesale distributor where prescription drugs, medical

gases, or medical equipment are stored, handled, repackaged, or offered for sale.

11. "Manufacturer" means a person licensed or approved by the federal food and drug

administration to engage in the manufacture of drugs, medical gases, or devices by

manufacturing the drugs, gases, or devices at the person's own facility or by

contracting for the manufacturing by others.

12. "Manufacturer's exclusive distributor" means any person that contracts with a

manufacturer to provide or coordinate warehousing, distribution, or other services on

behalf of a manufacturer and which takes title to that manufacturer's prescription drug,

medical gases, or medical equipment but which does not have general responsibility to

direct the sale or disposition of the manufacturer's prescription drug, medical gas, or

medical equipment. The manufacturer's exclusive distributor must be licensed as a

wholesale distributor under this chapter, and to be considered part of the normal

distribution channel also must be an authorized distributor of record.

13. "Medical device" means a product or equipment used to diagnose a disease or other

condition in order to cure, treat, or prevent disease.

14. "Medical equipment" means equipment prescribed or distributed by a practitioner used

in the course of treatment of home care.

15. "Medical gas” means any gaseous substance that meets medical purity standards and

has application in a medical environment.

16. "Normal distribution channel" means a chain of custody for a prescription drug which

goes, directly or by drop shipment, from a manufacturer of the prescription drug, from

that manufacturer to that manufacturer's colicensed partner, from that manufacturer to

that manufacturer's third-party logistics provider, or from that manufacturer to that

manufacturer's exclusive distributor to:

a. A pharmacy, to a patient or other designated person authorized by law to

dispense or administer the drug to a patient;

b. A wholesale distributor, to a pharmacy, to a patient or other designated person

authorized by law to dispense or administer the drug to a patient;

c. A wholesale distributor, to a chain pharmacy warehouse, to that chain pharmacy

warehouse's intracompany pharmacy, to a patient or other designated person

authorized by law to dispense or administer the drug to a patient; or

d. A chain pharmacy warehouse, to the chain pharmacy warehouse's intracompany

pharmacy, to a patient or other designated person authorized by law to dispense

or administer the drug to a patient.

17. "Outsourcing facility" means a facility at one geographic location or address which is

engaged in anticipatory compounding of sterile drugs and complies with section 503(b)

of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 353(b)].

18. "Pedigree" means a document or an electronic file containing information that records

each distribution of any given prescription drug.

to a patient.

17. "Outsourcing facility" means a facility at one geographic location or address which is

engaged in anticipatory compounding of sterile drugs and complies with section 503(b)

of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 353(b)].

18. "Pedigree" means a document or an electronic file containing information that records

each distribution of any given prescription drug.

19. "Pharmacy distributor” means any pharmacy or hospital pharmacy licensed in this

state which is engaged in the delivery or distribution of prescription drugs, medical

gases, or medical equipment to any other pharmacy licensed in this state or to any

other person, including a wholesale drug distributor, engaged in the delivery or

distribution of prescription drugs, medical gases, or medical equipment and involved in

the actual, constructive, or attempted transfer of a drug, gas, or equipment in this state

to other than the ultimate consumer, when the financial value of the drugs, gases, or

equipment is equivalent to at least five percent of the total gross sales of the pharmacy

distributor.

20. "Prescription drug" means any drug, including any biological product, except for blood

and blood components intended for transfusion or biological products that are also

medical devices, required by federal law, including federal regulation, to be dispensed

only by a prescription, including finished dosage forms and bulk drug substances

subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C.

353(b)].

21. "Repackage" means repackaging or otherwise changing the container, wrapper, or

labeling to further the distribution of a prescription drug. The term does not include

actions completed by the pharmacists responsible for dispensing product to the

patient.

22. "Repackager" means a person that repackages.

23. "Third-party logistics provider" means a person that contracts with a wholesale

distributor or a prescription drug, medical gas, or medical equipment manufacturer to

provide or coordinate warehousing, wholesale distribution, or other services on behalf

of a manufacturer, but does not take title to the prescription drug, medical gas, or

medical equipment or have general responsibility to direct the prescription drug's,

medical gas's, or medical equipment's sale or disposition. The third-party logistics

provider must be licensed independently under this chapter and to be considered part

of the normal distribution channel must also be an authorized distributor of record.

24. "Trace" means the capability to identify the historical locations, the records of

ownership, and the packaging hierarchy for a particular traceable item. "Trace"

answers questions such as where has the item been, who previously owned the item,

and in what packaging hierarchy did the product exist at various locations.

25. "Track" means the capability to identify the current, and at the time of shipment the

intended future, location, ownership, and packaging hierarchy of a traceable item

through the supply chain as the traceable item moves between parties. "Track"

addresses both forward and reverse logistics operations. "Track" answers questions

such as where is the item currently, who is the next intended recipient, and what is the

current packaging hierarchy of the item.

26. "Virtual distributor" means a person that arranges for the distribution of a drug or

device and which may or may not take actual possession of the drug or device but

contracts with others for the distribution, purchase, and sale.

27. "Virtual manufacturer" means a person that owns the new drug application or

abbreviated new drug application for a drug or device and which contracts with others

for the actual manufacturing of the drug or device.

28. "Wholesale distribution" means distribution of prescription drugs, medical gases, or

medical equipment to persons other than a consumer or patient. The term does not

include:

7. "Virtual manufacturer" means a person that owns the new drug application or

abbreviated new drug application for a drug or device and which contracts with others

for the actual manufacturing of the drug or device.

28. "Wholesale distribution" means distribution of prescription drugs, medical gases, or

medical equipment to persons other than a consumer or patient. The term does not

include:

a. Intracompany sales of prescription drugs, medical gases, or medical equipment,

meaning any transaction or transfer between any division, subsidiary, parent or

affiliated or related company under common ownership and control of a corporate

entity, or any transaction or transfer between colicensees of a colicensed product.

b. The sale, purchase, distribution, trade, or transfer of a prescription drug, medical

gas, or medical equipment or the offer to sell, purchase, distribute, trade, or

transfer a prescription drug, medical gas, or medical equipment for emergency

medical reasons.

c. The purchase or other acquisition by a hospital or other health care entity that is a

member of a group purchasing organization of a drug, gas, or equipment for the

hospital's or health care entity's own use from the group purchasing organization

or from other hospitals or health care entities that are members of such

organizations.

d. The sale, purchase, or trade of a drug, gas, or equipment or an offer to sell,

purchase, or trade a drug, gas, or equipment by a charitable organization

described in section 501(c)(3) of the Internal Revenue Code of 1954 to a

nonprofit affiliate of the organization to the extent otherwise permitted by law.

e. The sale, purchase, or trade of a drug, gas, or equipment or an offer to sell,

purchase, or trade a drug, gas, or equipment among hospitals or other health

care entities that are under common control.

f. The distribution of prescription drug samples by manufacturers' representatives.

g. Drug returns, when conducted by a hospital, health care entity, or charitable

institution in accordance with title 21, Code of Federal Regulations, section

203.23.

h. The sale of minimal quantities of prescription drugs, medical gases, or medical

equipment by retail pharmacies to licensed practitioners for office use.

i. The sale, purchase, or trade of a drug, gas, or equipment; an offer to sell,

purchase, or trade a drug, gas, or equipment; or the dispensing of a drug, gas, or

equipment pursuant to a prescription.

j. The sale, transfer, merger, or consolidation of all or part of the business of a

pharmacy from or with another pharmacy, whether accomplished as a purchase

and sale of stock or business assets.

k. The sale, purchase, distribution, trade, or transfer of a prescription drug, medical

gas, or medical equipment from one authorized distributor of record to one

additional authorized distributor of record when the manufacturer has stated in

writing to the receiving authorized distributor of record that the manufacturer is

unable to supply such prescription drug, medical gas, or medical equipment and

the supplying authorized distributor of record states in writing that the prescription

drug, medical gas, or medical equipment being supplied had until that time been

exclusively in the normal distribution channel.

l. The delivery of, or offer to deliver, a prescription drug, medical gas, or medical

equipment by a common carrier solely in the common carrier's usual course of

business of transporting prescription drugs, medical gases, or medical equipment

and the common carrier does not store, warehouse, or take legal ownership of

the prescription drug, medical gas, or medical equipment.

m. The sale or transfer from a retail pharmacy or chain pharmacy warehouse of

expired, damaged, returned, or recalled prescription drugs, medical gases, or

medical equipment to the original manufacturer or to a third-party returns

processor.

medical equipment

and the common carrier does not store, warehouse, or take legal ownership of

the prescription drug, medical gas, or medical equipment.

m. The sale or transfer from a retail pharmacy or chain pharmacy warehouse of

expired, damaged, returned, or recalled prescription drugs, medical gases, or

medical equipment to the original manufacturer or to a third-party returns

processor.

29. "Wholesale distributor" means anyone engaged in the wholesale distribution of

prescription drugs, medical gases, or medical equipment, including manufacturers;

virtual manufacturers; repackagers; own-label distributors; private-label distributors;

jobbers; brokers; virtual distributors and warehouses, including manufacturers' and

distributors' warehouses; manufacturers' exclusive distributors; authorized distributors

of record; drug, gas, or equipment wholesalers or distributors; independent wholesale

drug, gas, or equipment traders; specialty wholesale distributors; retail pharmacies

that conduct wholesale distribution; and chain pharmacy warehouses that conduct

wholesale distribution. To be considered part of the normal distribution channel, such

wholesale distributor must also be an authorized distributor of record.