24:6B-14 Definitions relative to pharmaceutical wholesale distributors.

5. As used in sections 5 through 24 of P.L.2005, c.206 (C.24:6B-14 et seq.):

"Adulterated" means a prescription drug that is adulterated pursuant to R.S.24:5-10.

"Authenticate" means to affirmatively verify before any distribution of a prescription drug that each transaction listed on the pedigree has occurred.

"Authorized distributor" or "authorized distributor of record" means a wholesale distributor with whom a manufacturer has established an ongoing relationship to distribute the manufacturer's product. An ongoing relationship is deemed to exist when the wholesale distributor, or any member of its affiliated group as defined in section 1504 of the Internal Revenue Code of 1986 (26 U.S.C. s.1504): is listed on the manufacturer's list of authorized distributors; has a written agreement currently in effect with the manufacturer; or has a verifiable account with the manufacturer and meets or exceeds the following transaction or volume requirement thresholds:

a. 5,000 sales units per company within 12 months; or

b. 12 purchases by invoice at the manufacturer's minimum purchasing requirement per invoice within 12 months.

"Centralized prescription processing" means the processing by a pharmacy of a request from another pharmacy to fill or refill a prescription drug order or to perform processing functions such as dispensing, drug utilization review, claims adjudication, refill authorizations and therapeutic interventions.

"Chain pharmacy distribution center" means a distribution facility or warehouse owned by and operated for the primary use of a group of pharmacies that are under common or affiliated control or ownership.

"Commissioner" means the Commissioner of Health.

"Contraband" with respect to a prescription drug means: counterfeit; stolen; misbranded; obtained by fraud; purchased by a nonprofit institution for its own use and placed in commerce in violation of the own use agreement; or the existing documentation or pedigree, if required, for the prescription drug has been forged, counterfeited, falsely created, or contains any altered, false, or misrepresented information.

"Counterfeit prescription drug" means a prescription drug, or the container, shipping container, seal, or labeling thereof, which, without authorization, bears the trademark, trade name or other identifying mark, imprint, or any likeness thereof, of a manufacturer, processor, packer, or distributor other than the person or persons who in fact manufactured, processed, packed, or distributed the prescription drug and which thereby falsely purports or is represented to be the product of, or to have been packed or distributed by, such other manufacturer, processor, packer, or distributor.

"DEA" means the federal Drug Enforcement Administration.

"Department" means the Department of Health.

"Designated representative" means an individual who is designated by a wholesale prescription drug distributor to serve as the primary contact person for the wholesale distributor with the department, and who is responsible for managing the company's operations at that licensed location.

"Distribute" means to sell, offer to sell, deliver, offer to deliver, broker, give away, or transfer a prescription drug, whether by passage of title, physical movement, or both. The term does not mean to: dispense or administer; deliver or offer to deliver in the usual course of business as a common carrier or logistics provider, or provide a sample to a patient by a licensed practitioner, a health care professional acting at the direction and under the supervision of a practitioner, or the pharmacist of a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.) acting at the direction of a practitioner.

"Drug" means: a. an article or substance recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States or official National Formulary, or any supplement to any of them; b. an article or substance intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; c. an article or substance, other than food, intended to affect the structure of any function of the body of man or animals; and d. an article or substance intended for use as a component of any article or substance specified in clause a., b., or c.; but does not include devices or their components, parts, or accessories. Drug includes a prefilled syringe or needle.

"Immediate container" means a container but does not include package liners.

"Logistics provider" means an entity that receives drugs from the original manufacturer and delivers them at the direction of that manufacturer, and does not purchase, sell, trade, or take title to the drugs.

"Misbranded" means a prescription drug with respect to which the label is: false or misleading in any particular; does not bear the name and address of the manufacturer, packer, or distributor and does not have an accurate statement of the quantities of the active ingredients; or does not show an accurate monograph for legend drugs; or is misbranded based upon other considerations as provided in the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. s.301 et seq.

"Pedigree" means a statement or record identifying each previous sale of a prescription drug, from the sale by a manufacturer through acquisition and sale by a wholesale distributor, including each distribution to an authorized distributor, starting with the last authorized distributor, or the manufacturer if the prescription drug has not been purchased previously by an authorized distributor or is a prescription drug on the specified list of susceptible products. A pedigree shall include the following information: the proprietary and established name of the prescription drug; the dosage; container size; number of containers; and the date, business name, and address of all parties to each prior transaction involving the prescription drug starting with the last authorized distributor or the manufacturer if the prescription drug has not been purchased previously by an authorized distributor or is a prescription drug on the specified list of susceptible products.

"Repackage" means changing the container, wrapper, quantity, or labeling of a prescription drug to further its distribution.

"Sales unit" means the unit of measure that the manufacturer uses to invoice its customer for the particular product.

"Specified list of susceptible products" means a specific list of prescription drugs, to be determined by the commissioner, that are considered to be potential targets for adulteration, counterfeiting, or diversion, which the commissioner shall provide to wholesale distributors as prescription drugs are added to or removed from the list, along with notification of those changes.

"Wholesale distribution" means the distribution of prescription drugs in or into the State by a wholesale distributor to a person other than a consumer or patient, and includes transfers of prescription drugs from one pharmacy to another pharmacy if the value of the goods transferred exceeds 5% of total prescription drug sales revenue of either the transferor or transferee pharmacy during any consecutive 12-month period. The term excludes:

a. the sale, purchase or trade of a prescription drug, an offer to sell, purchase, or trade a prescription drug, or the dispensing of a prescription drug pursuant to a prescription;

b. the sale, purchase or trade of a prescription drug, or an offer to sell, purchase, or trade a prescription drug for emergency medical reasons;

c. the sale, purchase or trade of a prescription drug, or an offer to sell, purchase, or trade a prescription drug by pharmacies, chain pharmacy distribution centers, and the associated transfer of goods between chain pharmacy distribution centers and their servicing wholesale distributors or manufacturers;

d. intracompany transactions or sales among wholesale distributors, chain pharmacy distribution centers, and pharmacies, and which are limited to those sales or transfers of a prescription drug among members of an affiliated group, even if the members of the affiliated group are separate legal entities;

e. the sale, purchase or trade of a prescription drug, or an offer to sell, purchase, or trade a prescription drug among hospitals or other health care entities licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.) that are under common control;

f. the sale, purchase or trade of a prescription drug, or offer to sell, purchase, or trade a prescription drug by a charitable organization exempt from taxation pursuant to section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. s.501(c)(3)) to a nonprofit affiliate of the organization;

g. the purchase or other acquisition by a hospital or other similar health care entity licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.) that is a member of a group purchasing organization of a prescription drug for its own use from the group purchasing organization or from other hospitals or similar health care entities that are members of these organizations;

h. the transfer of prescription drugs between pharmacies pursuant to a centralized prescription processing agreement;

i. the distribution of prescription drug samples by manufacturers' representatives or wholesale distributors' representatives;

j. the sale, purchase or trade of blood and blood components intended for transfusion;

k. prescription drug returns, when conducted by a pharmacy, chain pharmacy distribution center, hospital, health care entity licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.), or charitable institution in accordance with regulations established by the commissioner;

l. the sale of minimal quantities of prescription drugs by retail pharmacies to licensed practitioners for office use;

m. the stockpiling and distribution of drugs under the authorization of a State agency for the purpose of providing those products in an emergency situation; or

n. the sale, transfer, merger, or consolidation of all or part of the business of a pharmacy or pharmacies from or with another pharmacy or pharmacies whether accomplished as a purchase and sale of stock or business assets.

"Wholesale distributor" means any person, other than the manufacturer, pharmacy, logistics provider, or chain pharmacy distribution center, engaged in wholesale distribution of prescription drugs in or into the State and includes repackagers, own-label distributors, private-label distributors, jobbers, brokers, warehouses including distributors' warehouses, independent prescription drug traders, and retail pharmacies that conduct wholesale distribution.

L.2005, c.206, s.5; amended 2012, c.17, s.86.