1.1                          A bill for an act 
  1.2             relating to health; modifying gift ban for 
  1.3             prescription drug practitioners; amending Minnesota 
  1.4             Statutes 2002, sections 151.461; 151.47, subdivision 1.
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 2002, section 151.461, is 
  1.7   amended to read: 
  1.8      151.461 [GIFTS TO PRACTITIONERS PROHIBITED.] 
  1.9      Subdivision 1.  [DEFINITIONS.] (a) As used in this section 
  1.10  and section 151.47, subdivision 1, paragraph (f), the terms 
  1.11  defined in this subdivision have the meaning given them. 
  1.12     (b) "Practitioner" means a physician, hospital, nursing 
  1.13  home, pharmacist, pharmacy, or any other person authorized to 
  1.14  prescribe or dispense prescription drugs in this state. 
  1.15     (c) "Gift" means a payment, subscription, advance, or 
  1.16  service; entertainment; or anything worth a retail value of more 
  1.17  than $20 given in a single calendar year, unless consideration 
  1.18  of equal or greater value is received.  "Gift" does not include: 
  1.19     (1) professional samples of a drug or vouchers for a drug 
  1.20  provided to a practitioner for free distribution to patients; 
  1.21     (2) a payment to the sponsor of a medical conference, 
  1.22  professional meeting, or other educational program, provided the 
  1.23  payment is not made directly to a practitioner, is used solely 
  1.24  for bona fide educational purposes, and the practitioner is a 
  1.25  speaker for a substantial portion of the conference, meeting, or 
  2.1   program; 
  2.2      (3) reasonable honoraria and payment of the reasonable 
  2.3   expenses of a practitioner who serves on the faculty at a 
  2.4   professional conference or meeting, provided the conference or 
  2.5   meeting is for a bona fide educational purpose and the 
  2.6   practitioner has substantial responsibility directly related to 
  2.7   the conference or meeting; 
  2.8      (4) compensation for the substantial professional or 
  2.9   consulting services of a practitioner in connection with a 
  2.10  genuine research project that involves an approved clinical 
  2.11  trial and is designed to answer specific questions about 
  2.12  vaccines, new therapies, or new ways of using known treatments; 
  2.13     (5) publications and educational materials; 
  2.14     (6) salaries or other benefits paid to employees about whom 
  2.15  the manufacturer or wholesale drug distributor is required to 
  2.16  file Form W-4 or Form 1099 with the Internal Revenue Service; or 
  2.17     (7) prescription or other drugs acquired pursuant to the 
  2.18  charitable institutions exemption of the Robinson-Pattman Act. 
  2.19     Subd. 2.  [PROHIBITED ACTS.] It is unlawful for any 
  2.20  manufacturer or wholesale drug distributor, or any agent 
  2.21  thereof, to offer or give any gift of value to a practitioner, 
  2.22  an employee, spouse, or relative of a practitioner, or any 
  2.23  person with the ability to influence a practitioner's decision 
  2.24  regarding ordering, purchasing, prescribing, or dispensing 
  2.25  prescription drugs in this state.  A medical device manufacturer 
  2.26  that distributes drugs as an incidental part of its device 
  2.27  business shall not be considered a manufacturer, a wholesale 
  2.28  drug distributor, or agent under this section.  As used in this 
  2.29  section, "gift" does not include: 
  2.30     (1) professional samples of a drug provided to a prescriber 
  2.31  for free distribution to patients; 
  2.32     (2) items with a total combined retail value, in any 
  2.33  calendar year, of not more than $50; 
  2.34     (3) a payment to the sponsor of a medical conference, 
  2.35  professional meeting, or other educational program, provided the 
  2.36  payment is not made directly to a practitioner and is used 
  3.1   solely for bona fide educational purposes; 
  3.2      (4) reasonable honoraria and payment of the reasonable 
  3.3   expenses of a practitioner who serves on the faculty at a 
  3.4   professional or educational conference or meeting; 
  3.5      (5) compensation for the substantial professional or 
  3.6   consulting services of a practitioner in connection with a 
  3.7   genuine research project; 
  3.8      (6) publications and educational materials; or 
  3.9      (7) salaries or other benefits paid to employees. 
  3.10     Subd. 3.  [ENFORCEMENT.] A person who violates this section 
  3.11  is subject to license revocation by the board and a civil 
  3.12  penalty of $10,000 per violation.  Each prohibited gift or gift 
  3.13  offer constitutes a separate violation.  This section may be 
  3.14  enforced by the board according to sections 151.47 to 151.50 and 
  3.15  by the attorney general according to section 8.31 or 325F.70 and 
  3.16  the public remedies available under those sections apply to this 
  3.17  section, except that the civil penalty is $10,000 per 
  3.18  violation.  Civil prosecution by the attorney general for 
  3.19  actions taken in violation of this section is not exclusive and 
  3.20  does not prevent any other applicable civil, criminal, or 
  3.21  administrative remedies and penalties for the same actions. 
  3.22     Sec. 2.  Minnesota Statutes 2002, section 151.47, 
  3.23  subdivision 1, is amended to read: 
  3.24     Subdivision 1.  [REQUIREMENTS.] All wholesale drug 
  3.25  distributors are subject to the requirements in paragraphs (a) 
  3.26  to (f).  
  3.27     (a) No person or distribution outlet shall act as a 
  3.28  wholesale drug distributor without first obtaining a license 
  3.29  from the board and paying the required fee. 
  3.30     (b) No license shall be issued or renewed for a wholesale 
  3.31  drug distributor to operate unless the applicant agrees to 
  3.32  operate in a manner prescribed by federal and state law and 
  3.33  according to the rules adopted by the board. 
  3.34     (c) The board may require a separate license for each 
  3.35  facility directly or indirectly owned or operated by the same 
  3.36  business entity within the state, or for a parent entity with 
  4.1   divisions, subsidiaries, or affiliate companies within the 
  4.2   state, when operations are conducted at more than one location 
  4.3   and joint ownership and control exists among all the entities. 
  4.4      (d) As a condition for receiving and retaining a wholesale 
  4.5   drug distributor license issued under sections 151.42 to 151.51, 
  4.6   an applicant shall satisfy the board that it has and will 
  4.7   continuously maintain: 
  4.8      (1) adequate storage conditions and facilities; 
  4.9      (2) minimum liability and other insurance as may be 
  4.10  required under any applicable federal or state law; 
  4.11     (3) a viable security system that includes an after hours 
  4.12  central alarm, or comparable entry detection capability; 
  4.13  restricted access to the premises; comprehensive employment 
  4.14  applicant screening; and safeguards against all forms of 
  4.15  employee theft; 
  4.16     (4) a system of records describing all wholesale drug 
  4.17  distributor activities set forth in section 151.44 for at least 
  4.18  the most recent two-year period, which shall be reasonably 
  4.19  accessible as defined by board regulations in any inspection 
  4.20  authorized by the board; 
  4.21     (5) principals and persons, including officers, directors, 
  4.22  primary shareholders, and key management executives, who must at 
  4.23  all times demonstrate and maintain their capability of 
  4.24  conducting business in conformity with sound financial practices 
  4.25  as well as state and federal law; 
  4.26     (6) complete, updated information, to be provided to the 
  4.27  board as a condition for obtaining and retaining a license, 
  4.28  about each wholesale drug distributor to be licensed, including 
  4.29  all pertinent corporate licensee information, if applicable, or 
  4.30  other ownership, principal, key personnel, and facilities 
  4.31  information found to be necessary by the board; 
  4.32     (7) written policies and procedures that assure reasonable 
  4.33  wholesale drug distributor preparation for, protection against, 
  4.34  and handling of any facility security or operation problems, 
  4.35  including, but not limited to, those caused by natural disaster 
  4.36  or government emergency, inventory inaccuracies or product 
  5.1   shipping and receiving, outdated product or other unauthorized 
  5.2   product control, appropriate disposition of returned goods, and 
  5.3   product recalls; 
  5.4      (8) sufficient inspection procedures for all incoming and 
  5.5   outgoing product shipments; and 
  5.6      (9) operations in compliance with all federal requirements 
  5.7   applicable to wholesale drug distribution. 
  5.8      (e) An agent or employee of any licensed wholesale drug 
  5.9   distributor need not seek licensure under this section. 
  5.10     (f) A wholesale drug distributor shall file with the board 
  5.11  an annual report, in a form and on the date prescribed by the 
  5.12  board, identifying all payments, honoraria, reimbursement or 
  5.13  other compensation authorized under section 151.461, clauses (3) 
  5.14  to (5) subdivision 1, paragraph (c), clauses (2) to (4), paid to 
  5.15  practitioners in Minnesota during the preceding calendar year.  
  5.16  The report shall identify the nature and value of any payments 
  5.17  totaling $100 or more, to a particular practitioner during the 
  5.18  year, and shall identify the practitioner.  Reports filed under 
  5.19  this provision are public data.