HF 840

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to pharmacy; modifying wholesale drug
distributor requirements; amending Minnesota Statutes
2004, section 151.47, subdivision 1, by adding a
subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 151.47,
subdivision 1, is amended to read:

Subdivision 1.

Requirements.

All wholesale drug
distributors are subject to the requirements in paragraphs (a)
to deleted text begin (f) deleted text end new text begin (g) new text end .

(a) No person or distribution outlet shall act as a
wholesale drug distributor without first obtaining a license
from the board and paying the required fee.

(b) No license shall be issued or renewed for a wholesale
drug distributor to operate unless the applicant agrees to
operate in a manner prescribed by federal and state law and
according to the rules adopted by the board.

(c) The board may require a separate license for each
facility directly or indirectly owned or operated by the same
business entity within the state, or for a parent entity with
divisions, subsidiaries, or affiliate companies within the
state, when operations are conducted at more than one location
and joint ownership and control exists among all the entities.

(d) As a condition for receiving and retaining a wholesale
drug distributor license issued under sections 151.42 to 151.51,
an applicant shall satisfy the board that it has new text begin complied with
paragraph (g) and that it has new text end and will continuously maintain:

(1) adequate storage conditions and facilities;

(2) minimum liability and other insurance as may be
required under any applicable federal or state law;

(3) a viable security system that includes an after hours
central alarm, or comparable entry detection capability;
restricted access to the premises; comprehensive employment
applicant screening; and safeguards against all forms of
employee theft;

(4) a system of records describing all wholesale drug
distributor activities set forth in section 151.44 for at least
the most recent two-year period, which shall be reasonably
accessible as defined by board regulations in any inspection
authorized by the board;

(5) principals and persons, including officers, directors,
primary shareholders, and key management executives, who must at
all times demonstrate and maintain their capability of
conducting business in conformity with sound financial practices
as well as state and federal law;

(6) complete, updated information, to be provided to the
board as a condition for obtaining and retaining a license,
about each wholesale drug distributor to be licensed, including
all pertinent corporate licensee information, if applicable, or
other ownership, principal, key personnel, and facilities
information found to be necessary by the board;

(7) written policies and procedures that assure reasonable
wholesale drug distributor preparation for, protection against,
and handling of any facility security or operation problems,
including, but not limited to, those caused by natural disaster
or government emergency, inventory inaccuracies or product
shipping and receiving, outdated product or other unauthorized
product control, appropriate disposition of returned goods, and
product recalls;

(8) sufficient inspection procedures for all incoming and
outgoing product shipments; and

(9) operations in compliance with all federal requirements
applicable to wholesale drug distribution.

(e) An agent or employee of any licensed wholesale drug
distributor need not seek licensure under this section.

(f) A wholesale drug distributor shall file with the board
an annual report, in a form and on the date prescribed by the
board, identifying all payments, honoraria, reimbursement or
other compensation authorized under section 151.461, clauses (3)
to (5), paid to practitioners in Minnesota during the preceding
calendar year. The report shall identify the nature and value
of any payments totaling $100 or more, to a particular
practitioner during the year, and shall identify the
practitioner. Reports filed under this provision are public
data.

new text begin (g) Manufacturers shall, on a quarterly basis, report by
National Drug Code the following pharmaceutical pricing criteria
to the commissioner of human services for each of their drugs:
average wholesale price, wholesale acquisition cost, average
manufacturer price as defined in United States Code, title 42,
chapter 7, subchapter XIX, section 1396r-8(k), and best price as
defined in United States Code, title 42, chapter 7, subchapter
XIX, section 1396r-8(c)(1)(C). The calculation of average
wholesale price and wholesale acquisition cost shall be the net
of all volume discounts, prompt payment discounts, chargebacks,
short-dated product discounts, cash discounts, free goods,
rebates, and all other price concessions or incentives provided
to a purchaser that result in a reduction in the ultimate cost
to the purchaser. When reporting average wholesale price,
wholesale acquisition cost, average manufacturer price, and best
price, manufacturers shall also include a detailed description
of the methodology by which the prices were calculated. When a
manufacturer reports average wholesale price, wholesale
acquisition cost, average manufacturer price, or best price, the
president or chief executive officer of the manufacturer shall
certify to the Medicaid program, on a form provided by the
commissioner of human services, that the reported prices are
accurate. Any information reported under this paragraph shall
be classified as nonpublic data under section 13.02, subdivision
9. Notwithstanding the classification of data in this paragraph
and subdivision 2, the Minnesota Attorney General's Office or
another law enforcement agency may access and obtain copies of
the data required under this paragraph and use that data for law
enforcement purposes.
new text end

Sec. 2.

Minnesota Statutes 2004, section 151.47, is
amended by adding a subdivision to read:

new text begin Subd. 3. new text end

new text begin Penalties and remedies. new text end

new text begin The attorney general
may pursue the penalties and remedies available to the attorney
general under section 8.31 against any manufacturer who violates
subdivision 1, paragraph (g).
new text end