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CALIFORNIA STATUTES AND CODES
SECTIONS 4160-4169
BUSINESS AND PROFESSIONS CODE
SECTION 4160-4169
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) Every wholesaler shall be supervised or managed by a designated representative-in-charge. The designated representative-in-charge shall be responsible for the wholesaler's compliance with state and federal laws governing wholesalers. As part of its initial application for a license, and for each renewal, each wholesaler shall, on a form designed by the board, provide identifying information and the California license number for a designated representative or pharmacist proposed to serve as the designated representative-in-charge. The proposed designated representative-in-charge shall be subject to approval by the board. The board shall not issue or renew a wholesaler license without identification of an approved designated representative-in-charge for the wholesaler. (e) Every wholesaler shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated representative-in-charge ceases to act as the designated representative-in-charge, and shall on the same form propose another designated representative or pharmacist to take over as the designated representative-in-charge. The proposed replacement designated representative-in-charge shall be subject to approval by the board. If disapproved, the wholesaler shall propose another replacement within 15 days of the date of disapproval, and shall continue to name proposed replacements until a designated representative-in-charge is approved by the board. (f) A drug manufacturer premises 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. (g) 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 required in an amount established by the board as specified in subdivision (f) of Section 4400. When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary. If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholder's address of record with the board, whichever occurs first. Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license. 4161. (a) A person located outside this state that (1) ships, sells, mails, or delivers dangerous drugs or dangerous devices into this state or (2) sells, brokers, or distributes dangerous drugs or devices within this state shall be considered a nonresident wholesaler. (b) A nonresident wholesaler shall be licensed by the board prior to shipping, selling, mailing, or delivering dangerous drugs or dangerous devices to a site located in this state or selling, brokering, or distributing dangerous drugs or devices within 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, sold, mailed, or delivered to a site located in this state or sold, brokered, or distributed within 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 or within 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 five hundred fifty dollars ($550) or another amount established by the board not to exceed the annual fee for renewal of a license to compound injectable sterile drug products. When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary. If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholder's address of record with the board, whichever occurs first. Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license. (l) The registration fee shall be the fee specified in subdivision (f) of Section 4400. 4162. (a) (1) An applicant, that is not a government owned and operated wholesaler, 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. 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 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 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 or a biologics license 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 or biologics license 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. 4163. (a) A manufacturer, wholesaler, repackager, or pharmacy 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) Except as otherwise provided in Section 4163.5, commencing on July 1, 2016, a wholesaler or repackager may not sell, trade, or transfer a dangerous drug at wholesale without providing a pedigree. (d) Except as otherwise provided in Section 4163.5, commencing on July 1, 2016, a wholesaler or repackager may not acquire a dangerous drug without receiving a pedigree. (e) Except as otherwise provided in Section 4163.5, commencing on July 1, 2017, a pharmacy may not sell, trade, or transfer a dangerous drug at wholesale without providing a pedigree. (f) Except as otherwise provided in Section 4163.5, commencing on July 1, 2017, a pharmacy may not acquire a dangerous drug without receiving a pedigree. (g) Except as otherwise provided in Section 4163.5, commencing on July 1, 2017, a pharmacy warehouse may not acquire a dangerous drug without receiving a pedigree. For purposes of this section and Section 4034, a "pharmacy warehouse" means a physical location licensed as a wholesaler for prescription drugs that acts as a central warehouse and performs intracompany sales or transfers of those drugs to a group of pharmacies under common ownership and control. 4163.1. It is the intent of the Legislature that commencing on January 1, 2007, and continuing through the full implementation of the pedigree requirements specified by Section 4163, manufacturers and wholesalers shall use best efforts to provide in the most readily accessible form possible, information regarding the manufacturer's specific relationships in the distribution of dangerous drugs with wholesalers. 4163.1. (a) For purposes of Sections 4034 and 4163, "drop shipment" means a sale of a dangerous drug by the manufacturer of the dangerous drug whereby all of the following occur: (1) The pharmacy, or other person authorized by law to dispense or administer the drug, receives delivery of the dangerous drug directly from the manufacturer. (2) The wholesale distributor takes ownership of, but not physical possession of, the dangerous drug. (3) The wholesale distributor invoices the pharmacy or other person authorized by law to dispense or administer the drug in place of the manufacturer. (b) The board may develop regulations to establish an alternative process to convey the pedigree information required in Section 4034 for dangerous drugs that are sold by drop shipment. 4163.2. (a) (1) A manufacturer, wholesaler, or pharmacy lawfully possessing or owning dangerous drugs manufactured or distributed prior to the operative date of the pedigree requirements, specified in Sections 4034 and 4163, may designate these dangerous drugs as not subject to the pedigree requirements by preparing a written declaration made under penalty of perjury that lists those dangerous drugs. (2) The written declaration shall include the National Drug Code Directory lot number for each dangerous drug designated. The written declaration shall be submitted to and received by the board no later than 30 days after the operative date of the pedigree requirements. The entity or person submitting the written declaration shall also retain for a period of three years and make available for inspection by the board a copy of each written declaration submitted. (3) The board may, by regulation, further specify the requirements and procedures for the creation and submission of these written declarations. Information contained in these declarations shall be considered trade secrets and kept confidential by the board. (b) Any dangerous drugs designated on a written declaration timely created and submitted to the board may be purchased, sold, acquired, returned, or otherwise transferred without meeting the pedigree requirements, if the transfer complies with the other requirements of this chapter. 4163.3. (a) It is the intent of the Legislature that participants in the distribution chain for dangerous drugs, including manufacturers, wholesalers, or pharmacies furnishing, administering, or dispensing dangerous drugs, distribute and receive electronic pedigrees, and verify and validate the delivery and receipt of dangerous drugs against those pedigrees at the unit level, in a manner that maintains the integrity of the pedigree system without an unacceptable increase in the risk of diversion or counterfeiting. (b) To meet this goal, and to facilitate efficiency and safety in the distribution chain, the board shall, by regulation, define the circumstances under which participants in the distribution chain may infer the contents of a case, pallet, or other aggregate of individual units, packages, or containers of dangerous drugs, from a unique identifier associated with the case, pallet, or other aggregate, without opening each case, pallet, or other aggregate or otherwise individually validating each unit. (c) Manufacturers, wholesalers, and pharmacies opting to employ the use of inference as authorized by the board to comply with the pedigree requirements shall document their processes and procedures in their standard operating procedures (SOPs) and shall make those SOPs available for board review. (d) SOPs regarding inference shall include a process for statistically sampling the accuracy of information sent with inbound product. (e) Liability associated with accuracy of product information and pedigree using inference shall be specified in the board's regulations. 4163.4. (a) All units of dangerous drug in the possession of a wholesaler or pharmacy, for which the manufacturer does not hold legal title on the effective date of the pedigree requirement set forth in Section 4163.5, shall not be subject to the pedigree requirements set forth in Sections 4034 and 4163. However, if any units of those drugs are subsequently returned to the manufacturer, they shall be subject to the pedigree requirements if the manufacturer distributes those units in California. (b) All units of dangerous drug manufactured in California but distributed outside the state for dispensing outside the state shall not be subject to the pedigree requirements set forth in Sections 4034 and 4163 at either the time of initial distribution or in the event that any of those units are subsequently returned to the manufacturer. 4163.5. (a) The Legislature hereby finds and declares that: (1) The electronic pedigree system required by Sections 4034 and 4163 will provide tremendous benefits to the public and to all participants in the distribution chain. Those benefits should be made available as quickly as possible through the full cooperation of prescription drug supply chain participants. To this end, all drug manufacturers and repackagers are strongly encouraged to serialize drug products and initiate electronic pedigrees as soon as possible, and all participants in the supply chain are encouraged to immediately ready themselves to receive and pass electronic pedigrees. (2) At the same time, it is recognized that the process of implementing serialized electronic pedigree for all prescription drugs in the entire chain of distribution is a complicated technological and logistical undertaking for manufacturers, wholesalers, repackagers, pharmacies, and other supply chain participants. The Legislature seeks to ensure continued availability of prescription drugs in California while participants implement these requirements. (b) Before January 1, 2015, each manufacturer of a dangerous drug distributed in California shall designate those dangerous drugs representing a minimum of 50 percent of its drugs, generic or single source, distributed in California, for which it is listed as the manufacturer by the federal Food and Drug Administration, which shall be the subject of its initial phase of compliance with the January 1, 2015, deadline of the state's serialized electronic pedigree requirements set forth in Sections 4034 and 4163. Each manufacturer shall notify the Board of Pharmacy of the drugs so designated and the measure or measures used in designating its drugs to be serialized, and shall include in the notification the technology to be used to meet the serialized electronic pedigree requirements. The notification process for these specific actions may be specified by the board. (c) Before January 1, 2016, each manufacturer of a dangerous drug distributed in California shall designate the final 50 percent of its drugs, generic or single source, distributed in California for which it is listed as the manufacturer by the federal Food and Drug Administration that are subject to the state's serialized electronic pedigree requirements set forth in Sections 4034 and 4163, which shall comply with the state's serialized electronic pedigree requirement by January 1, 2016. Each manufacturer shall notify the Board of Pharmacy of the drugs so designated and the measure or measures used in designating its drugs to be serialized, and shall include in the notification the technology to be used to meet the serialized electronic pedigree requirements. The notification process for these specific actions may be specified by the board. (d) For purposes of designating drugs to be serialized as required by subdivisions (b) and (c), manufacturers shall select from any of the following measures: (1) Unit volume. (2) Product package (SKU) type. (3) Drug product family. (e) Drugs not subject to compliance with the pedigree requirements set forth in Sections 4034 and 4163 under this section shall not be subject to the provisions of subdivisions (c), (d), (e), and (f) of Section 4163. 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. (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 Public Health.
SECTION 4160-4169
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) Every wholesaler shall be supervised or managed by a designated representative-in-charge. The designated representative-in-charge shall be responsible for the wholesaler's compliance with state and federal laws governing wholesalers. As part of its initial application for a license, and for each renewal, each wholesaler shall, on a form designed by the board, provide identifying information and the California license number for a designated representative or pharmacist proposed to serve as the designated representative-in-charge. The proposed designated representative-in-charge shall be subject to approval by the board. The board shall not issue or renew a wholesaler license without identification of an approved designated representative-in-charge for the wholesaler. (e) Every wholesaler shall notify the board in writing, on a form designed by the board, within 30 days of the date when a designated representative-in-charge ceases to act as the designated representative-in-charge, and shall on the same form propose another designated representative or pharmacist to take over as the designated representative-in-charge. The proposed replacement designated representative-in-charge shall be subject to approval by the board. If disapproved, the wholesaler shall propose another replacement within 15 days of the date of disapproval, and shall continue to name proposed replacements until a designated representative-in-charge is approved by the board. (f) A drug manufacturer premises 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. (g) 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 required in an amount established by the board as specified in subdivision (f) of Section 4400. When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary. If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholder's address of record with the board, whichever occurs first. Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license. 4161. (a) A person located outside this state that (1) ships, sells, mails, or delivers dangerous drugs or dangerous devices into this state or (2) sells, brokers, or distributes dangerous drugs or devices within this state shall be considered a nonresident wholesaler. (b) A nonresident wholesaler shall be licensed by the board prior to shipping, selling, mailing, or delivering dangerous drugs or dangerous devices to a site located in this state or selling, brokering, or distributing dangerous drugs or devices within 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, sold, mailed, or delivered to a site located in this state or sold, brokered, or distributed within 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 or within 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 five hundred fifty dollars ($550) or another amount established by the board not to exceed the annual fee for renewal of a license to compound injectable sterile drug products. When needed to protect public safety, a temporary license may be issued for a period not to exceed 180 days, subject to terms and conditions that the board deems necessary. If the board determines that a temporary license was issued by mistake or denies the application for a permanent license, the temporary license shall terminate upon either personal service of the notice of termination upon the licenseholder or service by certified mail, return receipt requested, at the licenseholder's address of record with the board, whichever occurs first. Neither for purposes of retaining a temporary license, nor for purposes of any disciplinary or license denial proceeding before the board, shall the temporary licenseholder be deemed to have a vested property right or interest in the license. (l) The registration fee shall be the fee specified in subdivision (f) of Section 4400. 4162. (a) (1) An applicant, that is not a government owned and operated wholesaler, 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. 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 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 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 or a biologics license 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 or biologics license 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. 4163. (a) A manufacturer, wholesaler, repackager, or pharmacy 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) Except as otherwise provided in Section 4163.5, commencing on July 1, 2016, a wholesaler or repackager may not sell, trade, or transfer a dangerous drug at wholesale without providing a pedigree. (d) Except as otherwise provided in Section 4163.5, commencing on July 1, 2016, a wholesaler or repackager may not acquire a dangerous drug without receiving a pedigree. (e) Except as otherwise provided in Section 4163.5, commencing on July 1, 2017, a pharmacy may not sell, trade, or transfer a dangerous drug at wholesale without providing a pedigree. (f) Except as otherwise provided in Section 4163.5, commencing on July 1, 2017, a pharmacy may not acquire a dangerous drug without receiving a pedigree. (g) Except as otherwise provided in Section 4163.5, commencing on July 1, 2017, a pharmacy warehouse may not acquire a dangerous drug without receiving a pedigree. For purposes of this section and Section 4034, a "pharmacy warehouse" means a physical location licensed as a wholesaler for prescription drugs that acts as a central warehouse and performs intracompany sales or transfers of those drugs to a group of pharmacies under common ownership and control. 4163.1. It is the intent of the Legislature that commencing on January 1, 2007, and continuing through the full implementation of the pedigree requirements specified by Section 4163, manufacturers and wholesalers shall use best efforts to provide in the most readily accessible form possible, information regarding the manufacturer's specific relationships in the distribution of dangerous drugs with wholesalers. 4163.1. (a) For purposes of Sections 4034 and 4163, "drop shipment" means a sale of a dangerous drug by the manufacturer of the dangerous drug whereby all of the following occur: (1) The pharmacy, or other person authorized by law to dispense or administer the drug, receives delivery of the dangerous drug directly from the manufacturer. (2) The wholesale distributor takes ownership of, but not physical possession of, the dangerous drug. (3) The wholesale distributor invoices the pharmacy or other person authorized by law to dispense or administer the drug in place of the manufacturer. (b) The board may develop regulations to establish an alternative process to convey the pedigree information required in Section 4034 for dangerous drugs that are sold by drop shipment. 4163.2. (a) (1) A manufacturer, wholesaler, or pharmacy lawfully possessing or owning dangerous drugs manufactured or distributed prior to the operative date of the pedigree requirements, specified in Sections 4034 and 4163, may designate these dangerous drugs as not subject to the pedigree requirements by preparing a written declaration made under penalty of perjury that lists those dangerous drugs. (2) The written declaration shall include the National Drug Code Directory lot number for each dangerous drug designated. The written declaration shall be submitted to and received by the board no later than 30 days after the operative date of the pedigree requirements. The entity or person submitting the written declaration shall also retain for a period of three years and make available for inspection by the board a copy of each written declaration submitted. (3) The board may, by regulation, further specify the requirements and procedures for the creation and submission of these written declarations. Information contained in these declarations shall be considered trade secrets and kept confidential by the board. (b) Any dangerous drugs designated on a written declaration timely created and submitted to the board may be purchased, sold, acquired, returned, or otherwise transferred without meeting the pedigree requirements, if the transfer complies with the other requirements of this chapter. 4163.3. (a) It is the intent of the Legislature that participants in the distribution chain for dangerous drugs, including manufacturers, wholesalers, or pharmacies furnishing, administering, or dispensing dangerous drugs, distribute and receive electronic pedigrees, and verify and validate the delivery and receipt of dangerous drugs against those pedigrees at the unit level, in a manner that maintains the integrity of the pedigree system without an unacceptable increase in the risk of diversion or counterfeiting. (b) To meet this goal, and to facilitate efficiency and safety in the distribution chain, the board shall, by regulation, define the circumstances under which participants in the distribution chain may infer the contents of a case, pallet, or other aggregate of individual units, packages, or containers of dangerous drugs, from a unique identifier associated with the case, pallet, or other aggregate, without opening each case, pallet, or other aggregate or otherwise individually validating each unit. (c) Manufacturers, wholesalers, and pharmacies opting to employ the use of inference as authorized by the board to comply with the pedigree requirements shall document their processes and procedures in their standard operating procedures (SOPs) and shall make those SOPs available for board review. (d) SOPs regarding inference shall include a process for statistically sampling the accuracy of information sent with inbound product. (e) Liability associated with accuracy of product information and pedigree using inference shall be specified in the board's regulations. 4163.4. (a) All units of dangerous drug in the possession of a wholesaler or pharmacy, for which the manufacturer does not hold legal title on the effective date of the pedigree requirement set forth in Section 4163.5, shall not be subject to the pedigree requirements set forth in Sections 4034 and 4163. However, if any units of those drugs are subsequently returned to the manufacturer, they shall be subject to the pedigree requirements if the manufacturer distributes those units in California. (b) All units of dangerous drug manufactured in California but distributed outside the state for dispensing outside the state shall not be subject to the pedigree requirements set forth in Sections 4034 and 4163 at either the time of initial distribution or in the event that any of those units are subsequently returned to the manufacturer. 4163.5. (a) The Legislature hereby finds and declares that: (1) The electronic pedigree system required by Sections 4034 and 4163 will provide tremendous benefits to the public and to all participants in the distribution chain. Those benefits should be made available as quickly as possible through the full cooperation of prescription drug supply chain participants. To this end, all drug manufacturers and repackagers are strongly encouraged to serialize drug products and initiate electronic pedigrees as soon as possible, and all participants in the supply chain are encouraged to immediately ready themselves to receive and pass electronic pedigrees. (2) At the same time, it is recognized that the process of implementing serialized electronic pedigree for all prescription drugs in the entire chain of distribution is a complicated technological and logistical undertaking for manufacturers, wholesalers, repackagers, pharmacies, and other supply chain participants. The Legislature seeks to ensure continued availability of prescription drugs in California while participants implement these requirements. (b) Before January 1, 2015, each manufacturer of a dangerous drug distributed in California shall designate those dangerous drugs representing a minimum of 50 percent of its drugs, generic or single source, distributed in California, for which it is listed as the manufacturer by the federal Food and Drug Administration, which shall be the subject of its initial phase of compliance with the January 1, 2015, deadline of the state's serialized electronic pedigree requirements set forth in Sections 4034 and 4163. Each manufacturer shall notify the Board of Pharmacy of the drugs so designated and the measure or measures used in designating its drugs to be serialized, and shall include in the notification the technology to be used to meet the serialized electronic pedigree requirements. The notification process for these specific actions may be specified by the board. (c) Before January 1, 2016, each manufacturer of a dangerous drug distributed in California shall designate the final 50 percent of its drugs, generic or single source, distributed in California for which it is listed as the manufacturer by the federal Food and Drug Administration that are subject to the state's serialized electronic pedigree requirements set forth in Sections 4034 and 4163, which shall comply with the state's serialized electronic pedigree requirement by January 1, 2016. Each manufacturer shall notify the Board of Pharmacy of the drugs so designated and the measure or measures used in designating its drugs to be serialized, and shall include in the notification the technology to be used to meet the serialized electronic pedigree requirements. The notification process for these specific actions may be specified by the board. (d) For purposes of designating drugs to be serialized as required by subdivisions (b) and (c), manufacturers shall select from any of the following measures: (1) Unit volume. (2) Product package (SKU) type. (3) Drug product family. (e) Drugs not subject to compliance with the pedigree requirements set forth in Sections 4034 and 4163 under this section shall not be subject to the provisions of subdivisions (c), (d), (e), and (f) of Section 4163. 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. (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 Public Health.
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