43-15.3-03. Wholesale distributor licensing requirement - Minimum requirements for licensure

43-15.3-03. Wholesale distributor licensing requirement - Minimum requirements for

licensure.

1. A wholesale distributor that engages in the wholesale distribution of prescription drugs,

medical gases, or medical equipment shall pay the annual fee required by the board,

must be licensed by the board under this chapter, and must be properly licensed in

any other state in which the wholesale distributor engages in the distribution of

prescription drugs, medical gases, or medical equipment before engaging in wholesale

distributions of wholesale prescription drugs, medical gases, or medical equipment in

this state. The licensee shall operate in a manner prescribed by law and according to

rules adopted by the board. However, information and qualification requirements for

licensure beyond that required by federal law or regulation do not apply to

manufacturers distributing the manufacturers' own United States food and drug

administration-approved drugs, gases, or equipment, unless particular requirements

are deemed necessary and appropriate following rulemaking. The board may grant a

temporary license when the wholesale distributor or pharmacy distributor first applies

for a license to operate within this state. A temporary license is valid until the board

finds that the applicant meets the requirements for regular licensure.

2. A person may not engage in wholesale distributions of prescription drugs without

obtaining and maintaining accreditation or certification from the national association of

boards of pharmacy's verified accredited wholesale distributor or an accreditation body

approved by the board, obtaining and maintaining a license issued by the board, and

paying fees as may be required by the board.

3. The board shall require the following minimum information from each wholesale

distributor applying to get a license under subsection 1:

a. The name, full business address, and telephone number of the licensee.

b. All trade or business names used by the licensee.

c. Addresses, telephone numbers, and the names of contact persons for all facilities

used by the licensee for the storage, handling, and distribution of prescription

drugs.

d. The type of ownership or operation.

e. The name of every owner and operator of the licensee, including:

(1) If an individual, the name of the individual;

(2) If a partnership, the name of each partner, and the name of the partnership;

(3) If a corporation, the name and title of each corporate officer and director, the

corporate names, and the name of the state of incorporation; and

(4) If a sole proprietorship, the full name of the sole proprietor and the name of

the business entity.

f. A list of all licenses and permits issued to the applicant by any other state that

authorizes the applicant to purchase or possess prescription drugs, medical

gases, or medical equipment.

g. The name of the applicant's designated representative for the facility and for a

prescription drug wholesaler applicant, the personal information statement and

fingerprints required pursuant to subdivision h for the individual identified as the

prescription drug wholesaler applicant's designated representative for the facility.

h. Each individual identified by a prescription drug wholesaler applicant as a

designated representative for a facility and therefore required by subdivision g to

provide a personal information statement and fingerprints shall provide the

following information to the state:

(1) The individual's places of residence for the past seven years;

(2) The individual's date and place of birth;

(3) The individual's occupations, positions of employment, and offices held

during the past seven years;

(4) The principal business and address of any business, corporation, or other

organization in which each office of the individual was held or in which each

occupation or position of employment was carried on;

esidence for the past seven years;

(2) The individual's date and place of birth;

(3) The individual's occupations, positions of employment, and offices held

during the past seven years;

(4) The principal business and address of any business, corporation, or other

organization in which each office of the individual was held or in which each

occupation or position of employment was carried on;

(5) Whether the individual has been, during the past seven years, the subject of

any proceeding for the revocation of any license or any criminal violation

and, if so, the nature of the proceeding and the disposition of the

proceeding;

(6) Whether, during the past seven years, the individual has been enjoined,

either temporarily or permanently, by a court of competent jurisdiction from

violating any federal or state law regulating the possession, control, or

distribution of prescription drugs or criminal violations, together with details

concerning any of those events;

(7) A description of any involvement by the individual with any business,

including any investments, other than the ownership of stock in a publicly

traded company or mutual fund, during the past seven years, which

manufactured, administered, prescribed, distributed, or stored

pharmaceutical products and any lawsuits in which the businesses were

named as a party;

(8) A description of any misdemeanor or felony criminal offense of which the

individual, as an adult, was found guilty, regardless of whether adjudication

of guilt was withheld or whether the individual pled guilty or nolo contendere.

If the individual indicates that a criminal conviction is under appeal and

submits a copy of the notice of appeal of that criminal offense, the applicant

must, within fifteen days after the disposition of the appeal, submit to the

state a copy of the final written order of disposition; and

(9) A photograph of the individual taken in the previous one hundred eighty

days.

4. The information required under subsection 3 must be provided under oath.

5. The board may not issue a wholesale distributor license to an applicant, unless the

board:

a. Inspects or appoints a third party recognized by the board for the purpose of

inspecting the wholesale distribution operations of the facility before initial

licensure and continues to inspect periodically thereafter in accordance with a

schedule to be determined by the board, but not less than every three years.

Manufacturing facilities are exempt from inspection by the board if the

manufacturing facilities are currently registered with the federal food and drug

administration in accordance with section 510 of the Federal Food, Drug, and

Cosmetic Act [21 U.S.C. 301]; and

b. Determines that the designated representative meets the following qualifications:

(1) Is at least twenty-one years of age;

(2) Has been employed full time for at least three years in a pharmacy or with a

wholesale distributor in a capacity related to the dispensing and distribution

of, and recordkeeping relating to, prescription drugs, medical gases, or

medical equipment;

(3) Is employed by the applicant full time in a managerial level position;

(4) Is actively involved in and aware of the actual daily operation of the

wholesale distributor;

(5) Is physically present at the facility of the applicant during regular business

hours, except when the absence of the designated representative is

authorized, including sick leave and vacation leave;

(6) Is serving in the capacity of a designated representative for only one

applicant at a time, except where more than one licensed wholesale

distributor is colocated in the same facility and the wholesale distributors are

members of an affiliated group, as defined in section 1504 of the Internal

Revenue Code [26 U.S.C. 1504];

sentative is

authorized, including sick leave and vacation leave;

(6) Is serving in the capacity of a designated representative for only one

applicant at a time, except where more than one licensed wholesale

distributor is colocated in the same facility and the wholesale distributors are

members of an affiliated group, as defined in section 1504 of the Internal

Revenue Code [26 U.S.C. 1504];

(7) Does not have any convictions under any federal, state, or local laws

relating to wholesale or retail prescription drug, medical gas, or medical

equipment distribution or distribution of controlled substances; and

(8) Does not have any felony conviction under federal, state, or local laws.

6. The board shall submit the fingerprints provided by an individual with a license

application for a statewide and nationwide criminal history background record check.

The nationwide criminal history background record check must be conducted in the

manner provided in section 12-60-24. All costs associated with the background check

are the responsibility of the applicant.

7. The board shall require every wholesale prescription drug distributor applying for a

license to submit a bond of at least one hundred thousand dollars, or other equivalent

means of security acceptable to the state, including an irrevocable letter of credit or a

deposit in a trust account or financial institution. Obtaining and maintaining

accreditation or certification from the national association of boards of pharmacy's

verified accredited wholesale distributor satisfies this requirement. A chain pharmacy

warehouse that is engaged only in intracompany transfers is not subject to the bond

requirement. The purpose of the bond is to secure payment of any fines or penalties

imposed by the state and any fees and costs incurred by the state regarding that

license which are authorized under state law and which the licensee fails to pay thirty

days after the fines, penalties, or costs become final. The state may make a claim

against the bond or security until one year after the licensee's license ceases to be

valid. A single bond may cover all facilities operated by the applicant in the state. Any

chain pharmacy warehouse that is engaged only in intracompany transfers is exempt

from the bond requirement.

8. If a wholesale distributor distributes prescription drugs, medical gases, or medical

equipment from more than one facility, the wholesale distributor shall obtain a license

for each facility.

9. If a manufacturer manufactures prescription drugs, medical gases, or medical

equipment in more than one facility but does not engage in wholesale distribution to

North Dakota from those facilities, the manufacturer is not required to obtain a license

for each facility.

10. The board shall mail or electronic mail a notice for license renewal to each licensee

before the first day of the month in which the license expires. If application for renewal

of the license, along with the required fee, is not received by the board before the first

day of the following month, the license expires on the last day of that month. Timely

renewal is the responsibility of the licensee.

11. In accordance with each licensure renewal, the board shall make available on the

board's website for each wholesale distributor licensed under this section the

information that the wholesale distributor provided pursuant to subsection 3. Within

thirty days of receiving the notice, the wholesale distributor shall identify and state

under oath to the state licensing authority all changes or corrections to the information

that was provided under subsection 3. Changes in, or corrections to, any information in

subsection 3 must be submitted to the board as required by that authority. The board

may suspend, revoke, or refuse to renew the license of a wholesale distributor if the

board determines that the wholesale distributor no longer qualifies for the license

thority all changes or corrections to the information

that was provided under subsection 3. Changes in, or corrections to, any information in

subsection 3 must be submitted to the board as required by that authority. The board

may suspend, revoke, or refuse to renew the license of a wholesale distributor if the

board determines that the wholesale distributor no longer qualifies for the license

issued under this section.

12. The designated representative identified pursuant to subdivision g of subsection 3

must receive and complete continuing training in applicable federal and state laws

governing wholesale distribution of prescription drugs, medical gases, or medical

equipment.

13. Information provided under subdivision h of subsection 3 may not be disclosed to any

person other than a government agency that needs the information for licensing or

monitoring purposes.