37-7-604. Wholesale drug distributor licensing requirements -- fee -- federal compliance. (1) A person or distribution outlet may not act as a wholesale drug distributor without first obtaining a license from the board and paying the license fee.
     (2) A license may not be issued or renewed for a wholesale drug distributor to operate in this state unless the applicant:
     (a) agrees to abide by federal and state law and to comply with the rules adopted by the board; and
     (b) pays the license fee set by the board.
     (3) The board in its discretion may require that a separate license be obtained for:
     (a) each facility directly or indirectly owned or operated by the same business entity within the state; or
     (b) a parent entity with divisions, subsidiaries, or affiliates within the state if operations are conducted at more than one location and joint ownership and control exists among all entities.
     (4) In order to obtain and maintain a wholesale drug distributorship in this state, an applicant shall provide written documentation to the board attesting that the applicant has maintained and will continue to maintain:
     (a) adequate storage conditions and facilities;
     (b) minimum liability and other insurance that may be required by applicable federal or state law;
     (c) a functioning security system that includes:
     (i) an after hours central alarm or comparable entry detection system;
     (ii) restricted access to the premises;
     (iii) comprehensive employee applicant screening; and
     (iv) safeguards against employee theft;
     (d) a system of records setting forth all activities of wholesale drug distribution as defined in 37-7-602 for at least a period of the 2 previous years. The system of records must be accessible, as defined by board regulations, for inspections authorized by the board.
     (e) principals, including officers, directors, primary shareholders, and management executives, who shall at all times demonstrate and maintain their responsibility for conducting the business in conformity with sound financial practices as well as state and federal law;
     (f) complete, updated information, to be provided to the board as a condition for obtaining and retaining a license, pertaining to each wholesale drug distributor to be licensed, including but not limited to:
     (i) all pertinent corporate license information, if applicable; and
     (ii) other information regarding ownership, principals, key personnel, and facilities;
     (g) a written protocol of procedures and policies that assures preparation by the wholesale drug distributor for the handling of security or operational problems, including but not limited to those caused by:
     (i) natural disaster or government emergency;
     (ii) inventory inaccuracies or product shipping and receiving;
     (iii) insufficient inspections for all incoming and outgoing product shipments;
     (iv) lack of control of outdated or other unauthorized products;
     (v) inappropriate disposition of returned goods; and
     (vi) failure to promptly comply with product recalls; and
     (h) operations in compliance with all federal requirements applicable to wholesale drug distribution.
     (5) An agent or employee of a licensed wholesale drug distributor need not be licensed as a wholesale drug distributor.
     (6) For purposes of this section, all rules and regulations promulgated by the board must conform to the wholesale drug distributor licensing guidelines formally adopted by the United States food and drug administration. If a conflict arises between a food and drug administration guideline and a rule or regulation of the board, the former controls.

     History: En. Sec. 5, Ch. 134, L. 1991.