Amended in Senate June 17, 2014

Amended in Assembly May 5, 2014

Amended in Assembly April 23, 2014

Amended in Assembly March 18, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 2605


Introduced by Assembly Member Bonilla

February 21, 2014


An act to amend Sectionsbegin delete 4022.5,end delete 4040.5, 4043,begin delete 4053,end delete 4060, 4081, 4101, 4105, 4120, 4126, 4149, 4160, 4161, 4162, 4162.5, 4164, 4165, 4166, 4167, 4168, 4169, 4201, 4305.5, 4312, 4331, and 4400 of, to amend the heading of Article 11 (commencing with Section 4160) of Chapter 9 of Division 2 of, to addbegin delete Section 4025.2end deletebegin insert Sections 4025.5, 4044.5, 4053.1, and 4107end insert to, and to repeal and add Section 4045 of, the Business and Professions Code, relating to pharmacy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2605, as amended, Bonilla. Pharmacy: third-party logistics providers.

(1) Under the Pharmacy Law, a violation of which is a crime, the California State Board of Pharmacy licenses and regulates the practice of pharmacy. Existing law restricts the purchase, trade, sale, or transfer of dangerous drugs or dangerous devices, as defined, to licensed wholesalers and other authorized persons. Under the Pharmacy Law, the board licenses and regulates entities, including third-party logistics providers, as wholesalers. The Pharmacy Law defines a “third-party logistics provider” or a “reverse third-party logistics provider” as an entity licensed as a wholesaler that contracts with a dangerous drug manufacturer to provide or coordinate warehousing, distribution, or other similar services on behalf of a manufacturer, but for which there is no change of ownership in the dangerous drugs.begin insert Existing law requires a wholesaler to be supervised or managed by a designated representative-in-charge and requires a separate license for each place of business owned or operated by a wholesaler. Existing law also requires a wholesaler to submit a surety bond of $100,000 payable to a specified fund of the board to secure payment of any administrative fine imposed by the board.end insert Existing law, the federal Drug Supply Chain Security Act, prohibits a third-party logistics provider, as defined, from conducting any activities in a state unless each facility of the provider is licensed by the state from which drugs are distributed by the provider in accordance with regulations to be promulgated by the Secretary of the United States Department of Health and Human Services.

This bill would revise the definition ofbegin insert the termsend insert “third-party logistics provider”begin delete orend deletebegin insert andend insert “reverse third-party logistics provider” to conform to federal law, as specified, and would require a third-party logistics provider of a dangerous drug or dangerous device to be separately licensed by the board as a third-party logistics provider.begin insert The bill would require a third-party logistics provider to be supervised and managed by a facility manager-in-charge who would be subject to similar requirements as those imposed on a designated representative-in-charge with respect to wholesalers. The bill would limit a place of business to a single board-issued license and would require that at least one designated representative, in the case of a wholesaler, or facility manager, in the case of a third-party logistics provider, be present during business hours for each licensed place of business. The bill would require a third-party logistics provider to submit a surety bond of $90,000 payable to a specified fund of the board to secure payment of any administrative fine imposed by the board.end insert

begin insert

The bill would also require a manufacturer, wholesaler, third-party logistics provider, or pharmacy that has reasonable cause to believe that a dangerous drug or device that is or was in its possession, and has been sold or distributed in or through California, is counterfeit or the subject of a fraudulent transaction to notify the board within 72 hours of obtaining that knowledge.

end insert

(2) The Pharmacy Law requires a person located outside this state that ships, sells, mails, or delivers dangerous drugs or dangerous devices into this state, or sells, brokers, or distributes dangerous drugs or devices within this state to be a licensed nonresident wholesaler.

This bill would, in addition, require a person located outside this state that performs those actions or that warehouses or distributes dangerous drugs or dangerous devices into this state, or warehouses dangerous drugs or devices within this state to be licensed as either a nonresident wholesaler or a nonresident third-party logistics provider. The bill would make conforming changes, and would delete obsolete cross-references and provisions.

(3) Existing law sets the fees for the issuance and renewal of licenses for wholesalers and designated representatives at specified amounts and authorizes those fees to be increased to specified higher amounts.

This bill would instead set the fees at the higher amounts.

(4) Because a violation of the requirements described in paragraphs (1) and (2) above would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin deleteP3    1

SECTION 1.  

Section 4022.5 of the Business and Professions
2Code
is amended to read:

3

4022.5.  

(a) “Designated representative” means an individual
4to whom a license has been granted pursuant to Section 4053. A
5pharmacist fulfilling the duties of Section 4053 shall not be
6required to obtain a license as a designated representative.

7(b) “Designated representative-in-charge” means a designated
8representative or a pharmacist proposed by a wholesaler, third-party
9logistics provider, or veterinary food-animal drug retailer and
10approved by the board as the supervisor or manager responsible
11for ensuring the compliance of the wholesaler, third-party logistics
12provider, or veterinary food-animal drug retailer with all state and
13federal laws and regulations pertaining to practice in the applicable
14license category.

end delete
begin deleteP4    1

SEC. 2.  

Section 4025.2 is added to the Business and Professions
2Code
, to read:

3

4025.2.  

“Facility manager” means the individual who is
4designated by a third-party logistics provider to oversee the facility
5of the third-party logistics provider and who, in conjunction with
6the quality assurance department of the third-party logistics
7provider, is responsible for ensuring the third-party logistics
8provider’s compliance with state and federal laws and the
9third-party logistics provider’s customer specifications.

end delete
10begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 4025.5 is added to the end insertbegin insertBusiness and
11Professions Code
end insert
begin insert, to read:end insert

begin insert
12

begin insert4025.5.end insert  

(a) “Facility manager” means an individual licensed
13by the board who oversees the operations of a third-party logistics
14provider with respect to dangerous drugs and dangerous devices
15received by, stored in, or shipped from the licensed place of
16business of the third-party logistics provider.

17(b) “Facility manager-in-charge” means a facility manager
18licensed by the board who is designated by a third-party logistics
19provider and approved by the board pursuant to Section 4160 to
20oversee a licensed place of business of the third-party logistics
21provider. The facility manager-in-charge is responsible for
22ensuring the compliance of the licensed placed of business with
23state and federal laws and with the third-party logistics provider’s
24customer specifications.

end insert
25

begin deleteSEC. 3.end delete
26begin insertSEC. 2.end insert  

Section 4040.5 of the Business and Professions Code
27 is amended to read:

28

4040.5.  

“Reverse distributor” means every person who acts as
29an agent for pharmacies, drug wholesalers, third-party logistics
30providers, manufacturers, and other entities by receiving,
31inventorying, warehousing, and managing the disposition of
32outdated or nonsaleable dangerous drugs.

33

begin deleteSEC. 4.end delete
34begin insertSEC. 3.end insert  

Section 4043 of the Business and Professions Code is
35amended to read:

36

4043.  

“Wholesaler” means and includes a person who acts as
37a wholesale merchant, broker, jobber, customs broker, reverse
38distributor, agent, or a nonresident wholesaler, who sells for resale,
39or negotiates for distribution, or takes possession of, any drug or
40device included in Section 4022. Unless otherwise authorized by
P5    1law, a wholesaler may not store, warehouse, or authorize the
2storage or warehousing of drugs with any person or at any location
3not licensed by the board.

4begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 4044.5 is added to the end insertbegin insertBusiness and Professions
5Code
end insert
begin insert, to read:end insert

begin insert
6

begin insert4044.5.end insert  

“Reverse third-party logistics provider” means an
7entity that processes or manages the disposition of an outdated or
8nonsaleable dangerous drug or dangerous device on behalf of a
9manufacturer, wholesaler, or dispenser of the dangerous drug or
10dangerous device, but does not take ownership of the dangerous
11drug or dangerous device nor have the responsibility to direct its
12sale or disposition. Unless otherwise specified in this chapter,
13every provision of this chapter that applies to a third-party logistics
14provider shall also apply to a reverse third-party logistics provider.

end insert
15

SEC. 5.  

Section 4045 of the Business and Professions Code is
16repealed.

17

SEC. 6.  

Section 4045 is added to the Business and Professions
18Code
, to read:

19

4045.  

“Third-party logistics provider”begin delete or “reverse third-party
20logistic provider”end delete
means an entity that provides or coordinates
21warehousing or other logistics servicesbegin delete of a product inend deletebegin insert for a
22dangerous drug or dangerous device in intrastate orend insert
interstate
23commerce on behalf of a manufacturer, wholesaler, or dispenser
24ofbegin delete a productend deletebegin insert the dangerous drug or dangerous deviceend insert, but does
25not take ownership of thebegin delete productend deletebegin insert dangerous drug or dangerous
26deviceend insert
, nor have responsibility to directbegin delete theend deletebegin insert itsend insert sale or disposition
27begin delete of the productend delete.

begin delete
28

SEC. 7.  

Section 4053 of the Business and Professions Code is
29amended to read:

30

4053.  

(a) Notwithstanding Section 4051, the board may issue
31a license as a designated representative to provide sufficient and
32qualified supervision in a wholesaler, third-party logistics provider,
33or veterinary food-animal drug retailer. The designated
34representative shall protect the public health and safety in the
35handling, storage, warehousing, distribution, and shipment of
36dangerous drugs and dangerous devices in the wholesaler,
37third-party logistics provider, or veterinary food-animal drug
38retailer.

39(b) An individual who is at least 18 years of age may apply for
40a designated representative license. In order to obtain and maintain
P6    1that license, the individual shall meet all of the following
2requirements:

3(1) He or she shall be a high school graduate or possess a general
4education development certificate equivalent.

5(2) He or she shall have a minimum of one year of paid work
6experience in a licensed pharmacy, or with a drug wholesaler,
7third-party logistics provider, drug distributor, or drug
8manufacturer, in the past three years, related to the distribution or
9dispensing of dangerous drugs or dangerous devices or meet all
10of the prerequisites to take the examination required for licensure
11as a pharmacist by the board.

12(3) He or she shall complete a training program approved by
13the board that, at a minimum, addresses each of the following
14subjects:

15(A) Knowledge and understanding of California law and federal
16law relating to the distribution of dangerous drugs and dangerous
17devices.

18(B) Knowledge and understanding of California law and federal
19law relating to the distribution of controlled substances.

20(C) Knowledge and understanding of quality control systems.

21(D) Knowledge and understanding of the United States
22Pharmacopoeia standards relating to the safe storage and handling
23of drugs.

24(E) Knowledge and understanding of prescription terminology,
25abbreviations, dosages, and format.

26(4) The board may, by regulation, require training programs to
27include additional material.

28(5) The board shall not issue a license as a designated
29representative until the applicant provides proof of completion of
30the required training to the board.

31(c) The wholesaler, third-party logistics provider, or veterinary
32food-animal drug retailer shall not operate without a pharmacist
33or a designated representative on its premises.

34(d) Only a pharmacist or a designated representative shall
35prepare and affix the label to veterinary food-animal drugs.

36(e) Section 4051 shall not apply to any laboratory licensed under
37Section 351 of Title III of the Public Health Service Act (Public
38Law 78-410).

end delete
39begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 4053.1 is added to the end insertbegin insertBusiness and Professions
40Code
end insert
begin insert, to read:end insert

begin insert
P7    1

begin insert4053.1.end insert  

(a) Notwithstanding Section 4051, the board may issue
2a license to a qualified individual as a facility manager to provide
3sufficient and qualified supervision of a third-party logistics
4provider’s place of business. The facility manager shall protect
5the public health and safety in the handling, storage, warehousing,
6distribution, and shipment of dangerous drugs and dangerous
7devices in the third-party logistics provider’s place of business.

8(b) An individual who is at least 18 years of age may apply for
9a facility manager license. In order to obtain and maintain that
10license, the individual shall meet all of the following requirements:

11(1) He or she shall be a high school graduate or possess a
12general education development certificate equivalent.

13(2) He or she shall meet one of the following requirements:

14(A) Have a minimum of one year of paid work experience in the
15past three years with a third-party logistics provider.

16(B) Have a minimum of one year of paid work experience in the
17past three years in a licensed pharmacy, or with a drug wholesaler,
18drug distributor, or drug manufacturer, performing duties related
19to the distribution or dispensing of dangerous drugs or dangerous
20devices.

21(C) Meet all of the prerequisites to take the examination required
22for licensure as a pharmacist by the board.

23(3) (A) He or she shall complete a training program approved
24by the board that, at a minimum, addresses each of the following
25subjects:

26(i) Knowledge and understanding of California law and federal
27law relating to the distribution of dangerous drugs and dangerous
28devices.

29(ii) Knowledge and understanding of California law and federal
30law relating to the distribution of controlled substances.

31(iii) Knowledge and understanding of quality control systems.

32(iv) Knowledge and understanding of the United States
33Pharmacopoeia standards relating to the safe storage, handling,
34and transport of dangerous drugs.

35(B) The board may, by regulation, require the training program
36required under this paragraph to include additional material.

37(C) The board shall not issue a license as a facility manager
38until the applicant provides proof of completion of the training
39required by this paragraph to the board.

P8    1(c) A third-party logistics provider shall not operate without at
2least one facility manager present at each of its licensed places of
3business as required under Section 4160.

end insert
4

SEC. 8.  

Section 4060 of the Business and Professions Code is
5amended to read:

6

4060.  

A person shall not possess any controlled substance,
7except that furnished to a person upon the prescription of a
8physician, dentist, podiatrist, optometrist, veterinarian, or
9naturopathic doctor pursuant to Section 3640.7, or furnished
10pursuant to a drug order issued by a certified nurse-midwife
11pursuant to Section 2746.51, a nurse practitioner pursuant to
12Section 2836.1, a physician assistant pursuant to Section 3502.1,
13a naturopathic doctor pursuant to Section 3640.5, or a pharmacist
14pursuant to Section 4052.1, 4052.2, or 4052.6. This section does
15not apply to the possession of any controlled substance by a
16manufacturer, wholesaler, third-party logistics provider, pharmacy,
17pharmacist, physician, podiatrist, dentist, optometrist, veterinarian,
18naturopathic doctor, certified nurse-midwife, nurse practitioner,
19or physician assistant, if in stock in containers correctly labeled
20with the name and address of the supplier or producer.

21This section does not authorize a certified nurse-midwife, a nurse
22practitioner, a physician assistant, or a naturopathic doctor, to order
23his or her own stock of dangerous drugs and devices.

24

SEC. 9.  

Section 4081 of the Business and Professions Code is
25amended to read:

26

4081.  

(a) All records of manufacture and of sale, acquisition,
27or disposition of dangerous drugs or dangerous devices shall be
28at all times during business hours open to inspection by authorized
29officers of the law, and shall be preserved for at least three years
30from the date of making. A current inventory shall be kept by every
31manufacturer, wholesaler, third-party logistics provider, pharmacy,
32veterinary food-animal drug retailer, physician, dentist, podiatrist,
33veterinarian, laboratory, clinic, hospital, institution, or
34establishment holding a currently valid and unrevoked certificate,
35license, permit, registration, or exemption under Division 2
36(commencing with Section 1200) of the Health and Safety Code
37or under Part 4 (commencing with Section 16000) of Division 9
38of the Welfare and Institutions Code who maintains a stock of
39 dangerous drugs or dangerous devices.

P9    1(b) The owner, officer, and partner of a pharmacy, wholesaler,
2third-party logistics provider, or veterinary food-animal drug
3retailer shall be jointly responsible, with the pharmacist-in-chargebegin insert,
4facility manager-in-charge,end insert
or designated representative-in-charge,
5for maintaining the records and inventory described in this section.

6(c) The pharmacist-in-chargebegin insert, facility manager-in-charge,end insert or
7designated representative-in-charge shall not be criminally
8responsible for acts of the owner, officer, partner, or employee
9that violate this section and of which the pharmacist-in-chargebegin insert,
10facility manager-in-charge,end insert
or designated representative-in-charge
11had no knowledge, or in which he or she did not knowingly
12participate.

13

SEC. 10.  

Section 4101 of the Business and Professions Code
14 is amended to read:

15

4101.  

(a) A pharmacist may take charge of and act as the
16pharmacist-in-charge of a pharmacy upon application by the
17pharmacy and approval by the board.begin delete Anyend deletebegin insert Aend insert pharmacist-in-charge
18who ceases to act as the pharmacist-in-charge of the pharmacy
19shall notify the board in writing within 30 days of the date of that
20change in status.

21(b) A designated representative or a pharmacist may take charge
22of, and act as, the designated representative-in-charge of a
23wholesalerbegin delete, third-party logistics provider,end delete or veterinary food-animal
24drug retailer upon application by the wholesalerbegin delete, third-party
25logistics provider,end delete
or veterinary food-animal drug retailer and
26approval by the board.begin delete Anyend deletebegin insert Aend insert designated representative-in-charge
27who ceases to act as the designated representative-in-charge at that
28 entity shall notify the board in writing within 30 days of the date
29of that change in status.

begin insert

30(c) A facility manager may take charge of, and act as, the facility
31manager-in-charge of a third-party logistics provider upon
32application by the third-party logistics provider and approval by
33the board. A facility manager-in-charge who ceases to act as the
34facility manager-in-charge at that entity shall notify the board in
35writing within 30 days of the date of that change in status.

end insert
36

SEC. 11.  

Section 4105 of the Business and Professions Code
37 is amended to read:

38

4105.  

(a) All records or other documentation of the acquisition
39and disposition of dangerous drugs and dangerous devices by any
P10   1entity licensed by the board shall be retained on the licensed
2premises in a readily retrievable form.

3(b) The licensee may remove the original records or
4documentation from the licensed premises on a temporary basis
5for license-related purposes. However, a duplicate set of those
6records or other documentation shall be retained on the licensed
7premises.

8(c) The records required by this section shall be retained on the
9licensed premises for a period of three years from the date of
10making.

11(d) begin insert(1)end insertbegin insertend insertAny records that are maintained electronically shall be
12maintained so that the pharmacist-in-charge,begin insert orend insert the pharmacist on
13duty if the pharmacist-in-charge is not on duty,begin delete or, in the case of
14a veterinary food-animal drug retailer, wholesaler, third-party
15logistics provider, or the designated representative on duty,end delete
shall,
16at all times during which the licensed premises are open for
17business, be able to produce a hardcopy and electronic copy of all
18records of acquisition or disposition or other drug or
19dispensing-related records maintained electronically.

begin insert

20(2) In the case of a veterinary food-animal drug retailer,
21wholesaler, or third-party logistics provider, any records that are
22maintained electronically shall be maintained so that the
23designated representative-in-charge or the facility
24manager-in-charge, or the designated representative on duty or
25the facility manager on duty if the designated
26representative-in-charge or facility manager-in-charge is not on
27duty, shall, at all times during which the licensed place of business
28is open for business, be able to produce a hardcopy and electronic
29copy of all records of acquisition or disposition or other drug or
30dispensing-related records maintained electronically.

end insert

31(e) (1) Notwithstanding subdivisions (a), (b), and (c), the boardbegin delete,end delete
32 maybegin insert,end insert upon written request, grant to a licensee a waiver of the
33requirements that the records described in subdivisions (a), (b),
34and (c) be kept on the licensed premises.

35(2) A waiver granted pursuant to this subdivision shall not affect
36the board’s authority under this section or any other provision of
37this chapter.

38(f) When requested by an authorized officer of the law or by an
39authorized representative of the board, the owner, corporate officer,
40or manager of an entity licensed by the board shall provide the
P11   1board with the requested records within three business days of the
2time the request was made. The entity may request in writing an
3extension of this timeframe for a period not to exceed 14 calendar
4days from the date the records were requested. A request for an
5extension of time is subject to the approval of the board. An
6extension shall be deemed approved if the board fails to deny the
7extension request within two business days of the time the
8extension request was made directly to the board.

9begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 4107 is added to the end insertbegin insertBusiness and Professions
10Code
end insert
begin insert, to read:end insert

begin insert
11

begin insert4107.end insert  

If a manufacturer, wholesaler, third-party logistics
12provider, or pharmacy has reasonable cause to believe that a
13dangerous drug or dangerous device in, or having been in, its
14possession is counterfeit or the subject of a fraudulent transaction,
15the manufacturer, wholesaler, third-party logistics provider, or
16pharmacy shall notify the board within 72 hours of obtaining that
17knowledge. This section shall apply to any dangerous drug or
18dangerous device that has been sold or distributed in or through
19this state.

end insert
20

begin deleteSEC. 12.end delete
21begin insertSEC. 13.end insert  

Section 4120 of the Business and Professions Code
22 is amended to read:

23

4120.  

(a) A nonresident pharmacy shall not sell or distribute
24dangerous drugs or dangerous devices in this state through any
25person or media other than a wholesaler or third-party logistics
26provider who has obtained a license pursuant to this chapter or
27through a selling or distribution outlet that is licensed as a
28wholesaler or third-party logistics provider pursuant to this chapter
29without registering as a nonresident pharmacy.

30(b) Applications for a nonresident pharmacy registration shall
31be made on a form furnished by the board. The board may require
32any information as the board deems reasonably necessary to carry
33out the purposes of this section.

34(c) The Legislature, by enacting this section, does not intend a
35license issued to any nonresident pharmacy pursuant to this section
36to change or affect the tax liability imposed by Chapter 3
37(commencing with Section 23501) of Part 11 of Division 2 of the
38Revenue and Taxation Code on any nonresident pharmacy.

39(d) The Legislature, by enacting this section, does not intend a
40license issued to any nonresident pharmacy pursuant to this section
P12   1to serve as any evidence that the nonresident pharmacy is doing
2business within this state.

3

begin deleteSEC. 13.end delete
4begin insertSEC. 14.end insert  

Section 4126 of the Business and Professions Code
5 is amended to read:

6

4126.  

(a) Notwithstanding any other law, a covered entity may
7contract with a pharmacy to provide pharmacy services to patients
8of the covered entity, as defined in Section 256b of Title 42 of the
9United States Code, including dispensing preferentially priced
10drugs obtained pursuant to Section 256b of Title 42 of the United
11States Code. Contracts between those covered entities and
12pharmacies shall comply with guidelines published by the Health
13Resources and Services Administration and shall be available for
14inspection by board staff during normal business hours.

15(b) Drugs purchased pursuant to Section 256b of Title 42 of the
16United States Code and received by a pharmacy shall be segregated
17from the pharmacy’s other drug stock by either physical or
18electronic means. All records of acquisition and disposition of
19these drugs shall be readily retrievable in a form separate from the
20pharmacy’s other records.

21(c) Drugs obtained by a pharmacy to be dispensed to patients
22of a covered entity pursuant to Section 256b of Title 42 of the
23United States Code that cannot be distributed because of a change
24in circumstances for the covered entity or the pharmacy shall be
25returned to the distributor from which they were obtained. For the
26purposes of this section, a change in circumstances includes, but
27is not limited to, the termination or expiration of the contract
28between the pharmacy and the covered entity, the closure of a
29pharmacy, disciplinary action against the pharmacy, or closure of
30the covered entity.

31(d) A licensee that participates in a contract to dispense
32preferentially priced drugs pursuant to this section shall not have
33both a pharmacy and a wholesaler license, or both a pharmacy and
34a third-party logistics provider license.

35(e) Neither a covered entity nor a pharmacy shall be required
36to obtain a license as a wholesaler or a third-party logistics provider
37based on acts reasonably necessary to fully participate in the drug
38purchase program established by Section 256b of Title 42 of the
39United States Code.

P13   1

begin deleteSEC. 14.end delete
2begin insertSEC. 15.end insert  

Section 4149 of the Business and Professions Code
3 is amended to read:

4

4149.  

(a) A nonresident distributor shall not sell or distribute
5hypodermic needles or syringes in this state without obtaining a
6license from the board pursuant to Section 4141.

7(b) Notwithstanding subdivision (a), a license is not required if
8the nonresident distributor sells or distributes solely through a
9person who is licensed as a wholesaler or third-party logistics
10provider pursuant to Section 4160.

11(c) The Legislature, by enacting this section, does not intend a
12license issued to any nonresident distributor pursuant to this article
13to serve as evidence that the entity is doing business within this
14state.

15

begin deleteSEC. 15.end delete
16begin insertSEC. 16.end insert  

The heading of Article 11 (commencing with Section
174160) of Chapter 9 of Division 2 of the Business and Professions
18Code
is amended to read:

19 

20Article 11.  Wholesalers, Third-Party Logistics Providers, and
21Manufacturers
22

 

23

begin deleteSEC. 16.end delete
24begin insertSEC. 17.end insert  

Section 4160 of the Business and Professions Code
25 is amended to read:

26

4160.  

(a) A person shall not act as a wholesaler or third-party
27logistics provider of any dangerous drug or dangerous device unless
28he or she has obtained a license from the board.

29(b) Upon approval by the board and the payment of the required
30fee, the board shall issue a license to the applicant.

31(c) A separate license shall be required for each place of business
32owned or operated by a wholesaler or third-party logistics provider.
33begin insert Each place of business may only be issued a single license by the
34board.end insert
Each license shall be renewed annually and shall not be
35transferable.begin insert At all times during which a place of business is open
36for business, at least one designated representative, in the case of
37a wholesaler, or facility manager, in the case of a third-party
38logistics provider, shall be present.end insert

39(d) Every wholesalerbegin delete or third-party logistics providerend delete shall be
40supervised or managed by a designated representative-in-charge.
P14   1The designated representative-in-charge shall be responsible for
2thebegin insert wholesaler’send insert compliancebegin delete of the wholesaler or third-party
3logistics providerend delete
with state and federal laws governing wholesalers
4begin delete and third-party logistics providersend delete. As part of its initial application
5for a license, and for each renewal, each wholesalerbegin delete or third-party
6logistics providerend delete
shall, on a form designed by the board, provide
7identifying information and the California license number for a
8designated representative or pharmacist proposed to serve as the
9designated representative-in-charge. The proposed designated
10representative-in-charge shall be subject to approval by the board.
11The board shall not issue or renew a wholesalerbegin delete or third-party
12logistics providerend delete
license without identification of an approved
13designated representative-in-charge for the wholesalerbegin delete or
14third-party logistics providerend delete
.

begin insert

15(e) Each place of business of a third-party logistics provider
16shall be supervised and managed by a facility manager-in-charge.
17The facility manager-in-charge shall be responsible for the
18compliance of the place of business with state and federal laws
19governing third-party logistics providers and with the third-party
20logistics provider’s customer specifications. As part of its initial
21application for a license, and for each renewal, each third-party
22logistics provider shall, on a form designated by the board, provide
23identifying information and the California license number for a
24facility manager proposed to serve as the facility
25manager-in-charge. The proposed facility manager-in-charge
26shall be subject to approval by the board. The board shall not
27issue or renew a third-party logistics provider license without
28identification of an approved facility manager-in-charge for the
29third-party logistics provider.

end insert
begin delete

30(e)

end delete

31begin insert(f)end insert A wholesalerbegin delete or third-party logistics providerend delete shall notify
32the board in writing, on a form designed by the board, within 30
33days of the date when a designated representative-in-charge ceases
34to act as the designated representative-in-charge, and shall on the
35same form propose another designated representative or pharmacist
36to take over as the designated representative-in-charge. The
37proposed replacement designated representative-in-charge shall
38be subject to approval by the board. If disapproved, the wholesaler
39begin delete or third-party logistics providerend delete shall propose another replacement
40within 15 days of the date of disapproval, and shall continue to
P15   1name proposed replacements until a designated
2representative-in-charge is approved by the board.

begin insert

3(g) A third-party logistics provider shall notify the board in
4writing, on a form designed by the board, within 30 days of the
5date when a facility manager-in-charge ceases to act as the facility
6manager-in-charge, and shall on the same form propose another
7facility manager to take over as the facility manager-in-charge.
8The proposed replacement facility manager-in-charge shall be
9subject to approval by the board. If disapproved, the third-party
10logistics provider shall propose another replacement within 15
11days of the date of disapproval, and shall continue to name
12proposed replacements until a facility manager-in-charge is
13approved by the board.

end insert
begin delete

14(f)

end delete

15begin insert(h)end insert A drug manufacturer premises licensed by the Food and
16Drug Administration or licensed pursuant to Section 111615 of
17the Health and Safety Code that only distributes dangerous drugs
18and dangerous devices of its own manufacture is exempt from this
19section and Section 4161.

begin delete

20(g)

end delete

21begin insert(i)end insert The board may issue a temporary license, upon conditions
22and for periods of time as the board determines to be in the public
23interest. A temporary license fee shall be required in an amount
24established by the board as specified in subdivision (f) of Section
254400. When needed to protect public safety, a temporary license
26may be issued for a period not to exceed 180 days, subject to terms
27and conditions that the board deems necessary. If the board
28determines that a temporary license was issued by mistake or denies
29the application for a permanent license, the temporary license shall
30terminate upon either personal service of the notice of termination
31upon the licenseholder or service by certified mail, return receipt
32requested, at the licenseholder’s address of record with the board,
33whichever occurs first. Neither for purposes of retaining a
34temporary license, nor for purposes of any disciplinary or license
35denial proceeding before the board, shall the temporary
36licenseholder be deemed to have a vested property right or interest
37in the license.

38

begin deleteSEC. 17.end delete
39begin insertSEC. 18.end insert  

Section 4161 of the Business and Professions Code
40 is amended to read:

P16   1

4161.  

(a) A person located outside this state that (1) ships,
2sells, mails, warehouses, distributes, or delivers dangerous drugs
3or dangerous devices into this state or (2) sells, brokers,
4warehouses, or distributes dangerous drugs or devices within this
5state shall be considered a nonresident wholesaler or a nonresident
6third-party logistics provider.

7(b) A nonresident wholesaler or nonresident third-party logistics
8provider shall be licensed by the board prior to shipping, selling,
9mailing, warehousing, distributing, or delivering dangerous drugs
10or dangerous devices to a site located in this state or selling,
11brokering, warehousing, or distributing dangerous drugs or devices
12within this state.

13(c) A separate license shall be required for each place of business
14owned or operated by a nonresident wholesaler or nonresident
15third-party logistics provider from or through which dangerous
16drugs or dangerous devices are shipped, sold, mailed, warehoused,
17distributed, or delivered to a site located in this state or sold,
18brokered, warehoused, or distributed within this state.begin insert Each place
19of business may only be issued a single license by the board.end insert
A
20license shall be renewed annually and shall not be transferable.

21(d) The following information shall be reported, in writing, to
22the board at the time of initial application for licensure by a
23nonresident wholesaler or a nonresident third-party logistics
24provider, on renewal of a nonresident wholesaler or nonresident
25third-party logistics provider license, or within 30 days of a change
26in that information:

27(1) Its agent for service of process in this state.

28(2) Its principal corporate officers, as specified by the board, if
29any.

30(3) Its general partners, as specified by the board, if any.

31(4) Its owners if the applicant is not a corporation or partnership.

32(e) A report containing the information in subdivision (d) shall
33be made within 30 days of any change of ownership, office,
34corporate officer, or partner.

35(f) A nonresident wholesaler or nonresident third-party logistics
36provider shall comply with all directions and requests for
37information from the regulatory or licensing agency of the state
38in which it is licensed, as well as with all requests for information
39made by the board.

P17   1(g) A nonresident wholesaler or nonresident third-party logistics
2provider shall maintain records of dangerous drugs and dangerous
3devices sold, traded, transferred, warehoused, or distributed to
4persons in this state or within this state, so that the records are in
5a readily retrievable form.

6(h) A nonresident wholesaler or nonresident third-party logistics
7provider shall at all times maintain a valid, unexpired license,
8permit, or registration to conduct the business of the wholesaler
9or nonresident third-party logistics provider in compliance with
10the laws of the state in which it is a resident. An application for a
11nonresident wholesaler or nonresident third-party logistics provider
12license in this state shall include a license verification from the
13licensing authority in the applicant’s state of residence.

14(i) The board shall not issue or renew a nonresident wholesaler
15or nonresident third-party logistics provider license until the
16nonresident wholesaler or nonresident third-party logistics provider
17identifies a designated representative-in-chargebegin insert or facility
18manger-in-chargeend insert
and notifies the board in writing of the identity
19and license number of the designated representative-in-chargebegin insert or
20facility manager-in-chargeend insert
.

21(j) The designated representative-in-charge shall be responsible
22for the compliance of the nonresident wholesalerbegin delete or nonresident
23third-party logistics providerend delete
with state and federal laws governing
24wholesalersbegin delete and third-party logistics providersend delete.begin insert The facility
25manager-in-charge shall be responsible for the compliance of the
26nonresident third-party logistics provider’s place of business with
27state and federal laws governing third-party logistics providers.end insert

28 A nonresident wholesaler or nonresident third-party logistics
29provider shall identify and notify the board of a new designated
30representative-in-chargebegin insert or facility manager-in-chargeend insert within 30
31days of the date that the prior designated representative-in-charge
32begin insert or facility manager-in-chargeend insert ceases to be the designated
33representative-in-chargebegin insert or facility manager-in-chargeend insert.

34(k) The board may issue a temporary license, upon conditions
35and for periods of time as the board determines to be in the public
36interest. A temporary license fee shall be five hundred fifty dollars
37($550) or another amount established by the board not to exceed
38the annual fee for renewal of a license to compound injectable
39sterile drug products. When needed to protect public safety, a
40temporary license may be issued for a period not to exceed 180
P18   1days, subject to terms and conditions that the board deems
2necessary. If the board determines that a temporary license was
3issued by mistake or denies the application for a permanent license,
4the temporary license shall terminate upon either personal service
5of the notice of termination upon the licenseholder or service by
6certified mail, return receipt requested, at the licenseholder’s
7address of record with the board, whichever occurs first. Neither
8for purposes of retaining a temporary license, nor for purposes of
9any disciplinary or license denial proceeding before the board,
10shall the temporary licenseholder be deemed to have a vested
11property right or interest in the license.

12(l) The registration fee shall be the fee specified in subdivision
13(f) of Section 4400.

14

begin deleteSEC. 18.end delete
15begin insertSEC. 19.end insert  

Section 4162 of the Business and Professions Code
16 is amended to read:

17

4162.  

(a) (1) An applicant for the issuance or renewal of a
18wholesalerbegin delete or third-party logistics providerend delete license, which is not
19government owned and operated, shall submit a surety bond of
20one hundred thousand dollars ($100,000) or other equivalent means
21of security acceptable to the board payable to the Pharmacy Board
22Contingent Fund. The purpose of the surety bond is to secure
23payment of any administrative fine imposed by the board and any
24cost recovery ordered pursuant to Section 125.3.

begin insert

25(2) An applicant for the issuance or renewal of a third-party
26logistics provider license, which is not government owned and
27operated, shall submit a surety bond of ninety thousand dollars
28($90,000) or other equivalent means of security acceptable to the
29board payable to the Pharmacy Board Contingent Fund. The
30purpose of the surety bond is to secure payment of any
31administrative fine imposed by the board and any cost recovery
32ordered pursuant to Section 125.3.

end insert
begin delete

33(2)

end delete

34begin insert(3)end insert For purposes ofbegin delete paragraph (1)end deletebegin insert paragraphs (1) and (2)end insert, the
35board may accept a surety bond less thanbegin delete one hundred thousand
36dollars ($100,000)end delete
begin insert the amount required under paragraph (1) or
37(2)end insert
if the annual gross receipts of the previous tax year for the
38wholesaler or third-party logistics provider is ten million dollars
39($10,000,000) or less, in which case the surety bond shall be
40twenty-five thousand dollars ($25,000).

begin delete

P19   1(3)

end delete

2begin insert(4)end insert A person to whom an approved new drug application has
3been issued by the United States Food and Drug Administration
4who engages in the wholesale distribution of only the dangerous
5drug specified in the new drug application, and is licensed or
6applies for licensure as a wholesaler or third-party logistics
7provider, shall not be required to post a surety bond as provided
8in paragraph (1)begin insert or (2)end insert.

begin delete

9(4)

end delete

10begin insert(5)end insert For licensees subject to paragraphbegin delete (2) or (3),end deletebegin insert (3) or (4),end insert the
11board may require a bond up to one hundred thousand dollars
12($100,000) for any licensee who has been disciplined by any state
13or federal agency or has been issued an administrative fine pursuant
14to this chapter.

15(b) The board may make a claim against the bond if the licensee
16fails to pay a fine within 30 days after the order imposing the fine,
17or costs become final.

18(c) A single surety bond or other equivalent means of security
19acceptable to the board shall satisfy the requirement of subdivision
20(a) for all licensed sites under common control as defined in
21Section 4126.5.

22

begin deleteSEC. 19.end delete
23begin insertSEC. 20.end insert  

Section 4162.5 of the Business and Professions Code
24 is amended to read:

25

4162.5.  

(a) (1) An applicant for the issuance or renewal of a
26nonresident wholesalerbegin delete or nonresident third-party logistics providerend delete
27 license shall submit a surety bond of one hundred thousand dollars
28($100,000), or other equivalent means of security acceptable to
29the board, such as an irrevocable letter of credit, or a deposit in a
30trust account or financial institution, payable to the Pharmacy
31Board Contingent Fund. The purpose of the surety bond is to secure
32payment of any administrative fine imposed by the board and any
33cost recovery ordered pursuant to Section 125.3.

begin insert

34(2) An applicant for the issuance or renewal of a nonresident
35third-party logistics provider license shall submit a surety bond
36of ninety thousand dollars ($90,000), or other equivalent means
37of security acceptable to the board, such as an irrevocable letter
38of credit, or a deposit in a trust account or financial institution,
39payable to the Pharmacy Board Contingent Fund. The purpose of
40the surety bond is to secure payment of any administrative fine
P20   1imposed by the board and any cost recovery ordered pursuant to
2Section 125.3.

end insert
begin delete

3(2)

end delete

4begin insert(3)end insert For purposes ofbegin delete paragraph (1)end deletebegin insert paragraphs (1) and (2)end insert, the
5board may accept a surety bond less thanbegin delete one hundred thousand
6dollars ($100,000)end delete
begin insert the amount required under paragraph (1) or
7(2)end insert
if the annual gross receipts of the previous tax year for the
8nonresident wholesaler or the nonresident third-party logistics
9provider is ten million dollars ($10,000,000) or less, in which case
10the surety bond shall be twenty-five thousand dollars ($25,000).

begin delete

11(3)

end delete

12begin insert(4)end insert For applicants who satisfy paragraphbegin delete (2),end deletebegin insert (3),end insert the board may
13require a bond up to one hundred thousand dollars ($100,000) for
14any nonresident wholesaler or nonresident third-party logistics
15provider who has been disciplined by any state or federal agency
16or has been issued an administrative fine pursuant to this chapter.

begin delete

17(4)

end delete

18begin insert(5)end insert A person to whom an approved new drug application or a
19biologics license application has been issued by the United States
20Food and Drug Administration who engages in the wholesale
21distribution of only the dangerous drug specified in the new drug
22application or biologics license application, and is licensed or
23applies for licensure as a nonresident wholesaler or a nonresident
24third-party logistics provider, shall not be required to post a surety
25bond as provided in this section.

26(b) The board may make a claim against the bond if the licensee
27fails to pay a fine within 30 days of the issuance of the fine or
28when the costs become final.

29(c) A single surety bond or other equivalent means of security
30acceptable to the board shall satisfy the requirement of subdivision
31(a) for all licensed sites under common control as defined in
32Section 4126.5.

33

begin deleteSEC. 20.end delete
34begin insertSEC. 21.end insert  

Section 4164 of the Business and Professions Code
35 is amended to read:

36

4164.  

(a) A wholesaler or third-party logistics provider licensed
37by the board that distributes controlled substances, dangerous
38drugs, or dangerous devices within or into this state shall report
39to the board all distributions of dangerous drugs and controlled
40substances that are subject to abuse, as determined by the board.

P21   1(b) Each wholesaler shall develop and maintain a system for
2tracking individual sales of dangerous drugs at preferential or
3contract prices to pharmacies that primarily or solely dispense
4prescription drugs to patients of long-term care facilities. The
5system shall be capable of identifying purchases of any dangerous
6drug at preferential or contract prices by customers that vary
7significantly from prior ordering patterns for the same customer,
8including by identifying purchases in the preceding 12 calendar
9months by that customer or similar customers and identifying
10current purchases that exceed prior purchases by either that
11customer or similar customers by a factor of 20 percent.

12(c) Upon written, oral, or electronic request by the board, a
13wholesaler shall furnish data tracked pursuant to subdivision (b)
14to the board in written, hardcopy, or electronic form. The board
15shall specify the dangerous drugs, the customers, or both the
16dangerous drugs and customers for which data are to be furnished,
17and the wholesaler shall have 30 calendar days to comply with the
18request.

19(d) As used in this section, “preferential or contract prices”
20means and refers to purchases by contract of dangerous drugs at
21prices below the market wholesale price for those drugs.

22

begin deleteSEC. 21.end delete
23begin insertSEC. 22.end insert  

Section 4165 of the Business and Professions Code
24 is amended to read:

25

4165.  

A wholesaler or third-party logistics provider licensed
26by the board who sells or transfers any dangerous drug or
27dangerous device into this state or who receives, by sale or
28otherwise, any dangerous drug or dangerous device from any
29person in this state shall, on request, furnish an authorized officer
30of the law with all records or other documentation of that sale or
31transfer.

32

begin deleteSEC. 22.end delete
33begin insertSEC. 23.end insert  

Section 4166 of the Business and Professions Code
34 is amended to read:

35

4166.  

(a) Any wholesaler that uses the services of any
36third-party logistics provider or carrier, including, but not limited
37to, the United States Postal Service or any common carrier, shall
38be liable for the security and integrity of any dangerous drugs or
39dangerous devices through that provider or carrier until the drugs
P22   1or devices are delivered to the transferee at its board-licensed
2premises.

3(b) Nothing in this section is intended to affect the liability of
4a wholesaler, third-party logistics provider, or other distributor for
5dangerous drugs or dangerous devices after their delivery to the
6transferee.

7

begin deleteSEC. 23.end delete
8begin insertSEC. 24.end insert  

Section 4167 of the Business and Professions Code
9 is amended to read:

10

4167.  

A wholesaler or third-party logistics provider shall not
11obtain, by purchase or otherwise, any dangerous drugs or dangerous
12devices that it cannot maintain, in a secure manner,begin delete on the premisesend delete
13begin insert at the place of businessend insert licensed by the board.

14

begin deleteSEC. 24.end delete
15begin insertSEC. 25.end insert  

Section 4168 of the Business and Professions Code
16 is amended to read:

17

4168.  

A county or municipality shall not issue a business
18license for any establishment that requires a wholesaler or
19third-party logistics provider license unless the establishment
20possesses a current wholesaler or third-party logistics provider
21license issued by the board. For purposes of this section, an
22“establishment” is the licensee’s physical location in California.

23

begin deleteSEC. 25.end delete
24begin insertSEC. 26.end insert  

Section 4169 of the Business and Professions Code
25 is amended to read:

26

4169.  

(a) A person or entity shall not do any of the following:

27(1) Purchase, trade, sell, warehouse, distribute, or transfer
28dangerous drugs or dangerous devices at wholesale with a person
29or entity that is not licensed with the board as a wholesaler,
30third-party logistics provider, or pharmacy.

31(2) Purchase, trade, sell, or transfer dangerous drugs that the
32person knew or reasonably should have known were adulterated,
33as set forth in Article 2 (commencing with Section 111250) of
34Chapter 6 of Part 5 of Division 104 of the Health and Safety Code.

35(3) Purchase, trade, sell, or transfer dangerous drugs that the
36person knew or reasonably should have known were misbranded,
37as defined in Section 111335 of the Health and Safety Code.

38(4) Purchase, trade, sell, or transfer dangerous drugs or
39dangerous devices after the beyond use date on the label.

P23   1(5) Fail to maintain records of the acquisition or disposition of
2dangerous drugs or dangerous devices for at least three years.

3(b) Notwithstanding any other law, a violation of this section
4may subject the person or entity that has committed the violation
5to a fine not to exceed the amount specified in Section 125.9 for
6each occurrence, pursuant to a citation issued by the board.

7(c) Amounts due from any person under this section shall be
8offset as provided under Section 12419.5 of the Government Code.
9Amounts received by the board under this section shall be deposited
10into the Pharmacy Board Contingent Fund.

11(d) This section shall not apply to a pharmaceutical manufacturer
12licensed by the Food and Drug Administration or by the State
13Department of Public Health.

14

begin deleteSEC. 26.end delete
15begin insertSEC. 27.end insert  

Section 4201 of the Business and Professions Code
16 is amended to read:

17

4201.  

(a) Each application to conduct a pharmacy, wholesaler,
18third-party logistics provider, or veterinary food-animal drug
19retailer, shall be made on a form furnished by the board, and shall
20state the name, address, usual occupation, and professional
21qualifications, if any, of the applicant. If the applicant is other than
22a natural person, the application shall state the information as to
23each person beneficially interested therein.

24(b) As used in this section, and subject to subdivision (c), the
25term “person beneficially interested” means and includes:

26(1) If the applicant is a partnership or other unincorporated
27association, each partner or member.

28(2) If the applicant is a corporation, each of its officers, directors,
29and stockholders, provided that no natural person shall be deemed
30to be beneficially interested in a nonprofit corporation.

31(3) If the applicant is a limited liability company, each officer,
32manager, or member.

33(c) If the applicant is a partnership or other unincorporated
34association, a limited liability company, or a corporation, and the
35number of partners, members, or stockholders, as the case may
36be, exceeds five, the application shall so state, and shall further
37state the information required by subdivision (a) as to each of the
38five partners, members, or stockholders who own the five largest
39interests in the applicant entity. Upon request by the executive
40officer, the applicant shall furnish the board with the information
P24   1required by subdivision (a) as to partners, members, or stockholders
2not named in the application, or shall refer the board to an
3appropriate source of that information.

4(d) The application shall contain a statement to the effect that
5the applicant has not been convicted of a felony and has not
6violated any of the provisions of this chapter. If the applicant
7cannot make this statement, the application shall contain a
8statement of the violation, if any, or reasons which will prevent
9the applicant from being able to comply with the requirements
10with respect to the statement.

11(e) Upon the approval of the application by the board and
12payment of the fee required by this chapter for each pharmacy,
13wholesaler, third-party logistics provider, or veterinary food-animal
14drug retailer, the executive officer of the board shall issue a license
15to conduct a pharmacy, wholesaler, third-party logistics provider,
16or veterinary food-animal drug retailer, if all of the provisions of
17this chapter have been complied with.

18(f) Notwithstanding any other law, the pharmacy license shall
19authorize the holder to conduct a pharmacy. The license shall be
20renewed annually and shall not be transferable.

21(g) Notwithstanding any other law, the wholesaler license shall
22authorize the holder to wholesale dangerous drugs and dangerous
23devices. The license shall be renewed annually and shall not be
24transferable.

25(h) Notwithstanding any other law, the third-party logistics
26provider license shall authorize the holder to provide or coordinate
27warehousing, distribution, or other similar services of dangerous
28drugs and dangerous devices. The license shall be renewed annually
29and shall not be transferable.

30(i) Notwithstanding any other law, the veterinary food-animal
31drug retailer license shall authorize the holder to conduct a
32veterinary food-animal drug retailer and to sell and dispense
33veterinary food-animal drugs as defined in Section 4042.

34(j) For licenses referred to in subdivisions (f), (g), (h), and (i),
35any change in the proposed beneficial ownership interest shall be
36reported to the board within 30 days thereafter upon a form to be
37furnished by the board.

38

begin deleteSEC. 27.end delete
39begin insertSEC. 28.end insert  

Section 4305.5 of the Business and Professions Code
40 is amended to read:

P25   1

4305.5.  

(a) A person that is licensed as a wholesaler,
2third-party logistics provider, or veterinary food-animal drug
3retailer, shall notify the board within 30 days of the termination
4of employment of the designated representative-in-chargebegin insert or
5facility manager-in-chargeend insert
. Failure to notify the board within the
630-day period shall constitute grounds for disciplinary action.

7(b) A person that is licensed as a wholesaler, third-party logistics
8provider, or veterinary food-animal drug retailer, that willfully
9fails to notify the board of the termination of employment of the
10designated representative-in-chargebegin insert or facility manager-in-chargeend insert
11 at its licensed place of business, and that continues to operate the
12place of business in the absence of the designated
13representative-in-chargebegin insert or facility manager-in-chargeend insert for that
14place of business shall be subject to summary suspension or
15revocation of its license as a wholesaler, third-party logistics
16provider, or veterinary food-animal drug retailer at that place of
17business.

18(c) A designated representative-in-charge of a wholesalerbegin delete,
19third-party logistics provider,end delete
or veterinary food-animal drug
20retailer,begin insert or a facility manager-in-charge of a third-party logistics
21provider,end insert
who terminates his or her employment at the licensed
22place of business, shall notify the board within 30 days of the
23termination of employment. Failure to notify the board within the
2430-day period shall constitute grounds for disciplinary action.

25

begin deleteSEC. 28.end delete
26begin insertSEC. 29.end insert  

Section 4312 of the Business and Professions Code
27 is amended to read:

28

4312.  

(a) The board may cancel the license of a wholesaler,
29third-party logistics provider, pharmacy, or veterinary food-animal
30drug retailer if the licensed premises remain closed, as defined in
31subdivision (e), other than by order of the board. For good cause
32shown, the board may cancel a license after a shorter period of
33closure. To cancel a license pursuant to this subdivision, the board
34shall make a diligent, good faith effort to give notice by personal
35service on the licensee. If a written objection is not received within
3610 days after personal service is made or a diligent, good faith
37effort to give notice by personal service on the licensee has failed,
38the board may cancel the license without the necessity of a hearing.
39If the licensee files a written objection, the board shall file an
40 accusation based on the licensee remaining closed. Proceedings
P26   1shall be conducted in accordance with Chapter 5 (commencing
2with Section 11500) of Part 1 of Division 3 of Title 2 of the
3Government Code, and the board shall have all the powers granted
4in that chapter.

5(b) If the license of a wholesaler, third-party logistics provider,
6pharmacy, or veterinary food-animal drug retailer is canceled
7pursuant to subdivision (a) or revoked pursuant to Article 19
8(commencing with Section 4300), or a wholesaler, third-party
9logistics provider, pharmacy, or veterinary food-animal drug
10retailer notifies the board of its intent to remain closed or to
11discontinue business, the licensee shall, within 10 days thereafter,
12arrange for the transfer of all dangerous drugs and controlled
13substances or dangerous devices to another licensee authorized to
14possess the dangerous drugs and controlled substances or dangerous
15devices. The licensee transferring the dangerous drugs and
16controlled substances or dangerous devices shall immediately
17confirm in writing to the board that the transfer has taken place.

18(c) If a wholesaler, third-party logistics provider, pharmacy, or
19veterinary food-animal drug retailer fails to comply with
20subdivision (b), the board may seek and obtain an order from the
21superior court in the county in which the wholesaler, third-party
22logistics provider, pharmacy, or veterinary food-animal drug
23retailer is located, authorizing the board to enter the wholesaler,
24third-party logistics provider, pharmacy, or veterinary food-animal
25drug retailer and inventory and store, transfer, sell, or arrange for
26the sale of, all dangerous drugs and controlled substances and
27dangerous devices found in the wholesaler, third-party logistics
28provider, pharmacy, or veterinary food-animal drug retailer.

29(d) If the board sells or arranges for the sale of any dangerous
30drugs, controlled substances, or dangerous devices pursuant to
31subdivision (c), the board may retain from the proceeds of the sale
32an amount equal to the cost to the board of obtaining and enforcing
33an order issued pursuant to subdivision (c), including the cost of
34disposing of the dangerous drugs, controlled substances, or
35dangerous devices. The remaining proceeds, if any, shall be
36returned to the licensee from whose premises the dangerous drugs
37or controlled substances or dangerous devices were removed.

38(1) The licensee shall be notified of his or her right to the
39remaining proceeds by personal service or by certified mail,
40postage prepaid.

P27   1(2) If a statute or regulation requires the licensee to file with
2the board his or her address, and any change of address, the notice
3required by this subdivision may be sent by certified mail, postage
4prepaid, to the latest address on file with the board and service of
5notice in this manner shall be deemed completed on the 10th day
6after the mailing.

7(3) If the licensee is notified as provided in this subdivision,
8and the licensee fails to contact the board for the remaining
9proceeds within 30 calendar days after personal service has been
10made or service by certified mail, postage prepaid, is deemed
11completed, the remaining proceeds shall be deposited by the board
12into the Pharmacy Board Contingent Fund. These deposits shall
13be deemed to have been received pursuant to Chapter 7
14(commencing with Section 1500) of Title 10 of Part 3 of the Code
15of Civil Procedure and shall be subject to claim or other disposition
16as provided in that chapter.

17(e) For the purposes of this section, “closed” means not engaged
18in the ordinary activity for which a license has been issued for at
19least one day each calendar week during any 120-day period.

20(f) Nothing in this section shall be construed as requiring a
21pharmacy to be open seven days a week.

22

begin deleteSEC. 29.end delete
23begin insertSEC. 30.end insert  

Section 4331 of the Business and Professions Code
24 is amended to read:

25

4331.  

(a) A person who is neither a pharmacist nor a
26designated representative and whobegin delete does either of the following,end delete
27begin insert takes charge of a wholesaler or veterinary food-animal drug
28retailer or who dispenses a prescription or furnishes dangerous
29devices,end insert
except as otherwise provided in this chapter, is guilty of
30abegin delete misdemeanor:end deletebegin insert misdemeanor.end insert

begin delete

31(1) Takes charge of a wholesaler, third-party logistics provider,
32or veterinary food-animal drug retailer.

end delete
begin delete

33 (2) Coordinates the warehousing or distribution of dangerous
34drugs or dangerous devices or dispenses a prescription or furnishes
35dangerous devices.

end delete
begin insert

36(b) A person who is not a facility manager who takes charge of
37a third-party logistics provider or coordinates the warehousing
38or distribution of dangerous drugs or dangerous devices within a
39third-party logistics provider, except as otherwise provided in this
40chapter, is guilty of a misdemeanor.

end insert
begin delete

P28   1(b)

end delete

2begin insert(c)end insert A person licensed as a veterinary food-animal drug retailer
3that fails to place in charge of that veterinary food-animal drug
4retailer a pharmacist or designated representative, or any person
5who, by himself or herself, or by any other person, permits the
6dispensing of prescriptions, except by a pharmacist or designated
7representative, or as otherwise provided in this chapter, is guilty
8of a misdemeanor.

begin delete

9(c)

end delete

10begin insert(d)end insert A person licensed as a wholesalerbegin delete or third-party logistics
11providerend delete
that fails to place in charge of that wholesalerbegin delete or
12third-party logistics providerend delete
a pharmacist or designated
13representative, or any person who, by himself or herself, or by any
14other person, permits the furnishing of dangerous drugs or
15dangerous devices, except by a pharmacist or designated
16representative, or as otherwise provided in this chapter, is guilty
17of a misdemeanor.

begin insert

18(e) A person licensed as a third-party logistics provider that
19fails to place in charge of a licensed place of business of the
20third-party logistics provider a facility manager, or any person
21who, by himself or herself, or by any other person, permits the
22furnishing of dangerous drugs or dangerous devices, except by a
23facility manager, or as otherwise provided in this chapter, is guilty
24of a misdemeanor.

end insert
25

begin deleteSEC. 30.end delete
26begin insertSEC. 31.end insert  

Section 4400 of the Business and Professions Code,
27as added by Section 9 of Chapter 565 of the Statutes of 2013, is
28amended to read:

29

4400.  

The amount of fees and penalties prescribed by this
30chapter, except as otherwise provided, is that fixed by the board
31according to the following schedule:

32(a) The fee for a nongovernmental pharmacy license shall be
33four hundred dollars ($400) and may be increased to five hundred
34twenty dollars ($520). The fee for the issuance of a temporary
35nongovernmental pharmacy permit shall be two hundred fifty
36dollars ($250) and may be increased to three hundred twenty-five
37dollars ($325).

38(b) The fee for a nongovernmental pharmacy license annual
39renewal shall be two hundred fifty dollars ($250) and may be
40increased to three hundred twenty-five dollars ($325).

P29   1(c) The fee for the pharmacist application and examination shall
2be two hundred dollars ($200) and may be increased to two
3hundred sixty dollars ($260).

4(d) The fee for regrading an examination shall be ninety dollars
5($90) and may be increased to one hundred fifteen dollars ($115).
6If an error in grading is found and the applicant passes the
7examination, the regrading fee shall be refunded.

8(e) The fee for a pharmacist license and biennial renewal shall
9be one hundred fifty dollars ($150) and may be increased to one
10hundred ninety-five dollars ($195).

11(f) The fee for a nongovernmental wholesaler or third-party
12logistics provider license and annual renewal shall be seven
13hundred eighty dollars ($780) and may be decreased to no less
14than six hundred dollars ($600). The application fee for any
15additional location after licensure of the first 20 locations shall be
16three hundred dollars ($300) and may be decreased to no less than
17two hundred twenty-five dollars ($225). A temporary license fee
18shall be seven hundred fifteen dollars ($715) and may be decreased
19to no less than five hundred fifty dollars ($550).

20(g) The fee for a hypodermic license and renewal shall be one
21hundred twenty-five dollars ($125) and may be increased to one
22hundred sixty-five dollars ($165).

23(h) (1) The fee for application, investigation, and issuance of
24begin insert a end insertlicense as a designated representative pursuant to Section 4053begin insert,
25or as a facility manager pursuant to Section 4053.1,end insert
shall be three
26hundred thirty dollars ($330) and may be decreased to no less than
27two hundred fifty-five dollars ($255).

28(2) The fee for the annual renewal of a license as a designated
29representativebegin insert or facility managerend insert shall be one hundred ninety-five
30dollars ($195) and may be decreased to no less than one hundred
31fifty dollars ($150).

32(i) (1) The fee for the application, investigation, and issuance
33of a license as a designated representative for a veterinary
34food-animal drug retailer pursuant to Section 4053 shall be three
35hundred thirty dollars ($330) and may be decreased to no less than
36two hundred fifty-five dollars ($255).

37(2) The fee for the annual renewal of a license as a designated
38representative for a veterinary food-animal drug retailer shall be
39one hundred ninety-five dollars ($195) and may be decreased to
40no less than one hundred fifty dollars ($150).

P30   1(j) (1) The application fee for a nonresident wholesaler or
2third-party logistics provider license issued pursuant to Section
34161 shall be seven hundred eighty dollars ($780) and may be
4decreased to no less than six hundred dollars ($600).

5(2) For nonresident wholesalers or third-party logistics providers
6that have 21 or more facilities operating nationwide the application
7fees for the first 20 locations shall be seven hundred eighty dollars
8($780) and may be decreased to no less than six hundred dollars
9($600). The application fee for any additional location after
10licensure of the first 20 locations shall be three hundred dollars
11($300) and may be decreased to no less than two hundred
12twenty-five dollars ($225). A temporary license fee shall be seven
13hundred fifteen dollars ($715) and may be decreased to no less
14than five hundred fifty dollars ($550).

15(3) The annual renewal fee for a nonresident wholesaler license
16or third-party logistics provider license issued pursuant to Section
174161 shall be seven hundred eighty dollars ($780) and may be
18decreased to no less than six hundred dollars ($600).

19(k) The fee for evaluation of continuing education courses for
20accreditation shall be set by the board at an amount not to exceed
21forty dollars ($40) per course hour.

22(l) The fee for an intern pharmacist license shall be ninety dollars
23($90) and may be increased to one hundred fifteen dollars ($115).
24The fee for transfer of intern hours or verification of licensure to
25another state shall be twenty-five dollars ($25) and may be
26increased to thirty dollars ($30).

27(m) The board may waive or refund the additional fee for the
28issuance of a license where the license is issued less than 45 days
29before the next regular renewal date.

30(n) The fee for the reissuance of any license, or renewal thereof,
31that has been lost or destroyed or reissued due to a name change
32shall be thirty-five dollars ($35) and may be increased to forty-five
33dollars ($45).

34(o) The fee for the reissuance of any license, or renewal thereof,
35that must be reissued because of a change in the information, shall
36be one hundred dollars ($100) and may be increased to one hundred
37thirty dollars ($130).

38(p) It is the intent of the Legislature that, in setting fees pursuant
39to this section, the board shall seek to maintain a reserve in the
P31   1Pharmacy Board Contingent Fund equal to approximately one
2year’s operating expenditures.

3(q) The fee for any applicant for a nongovernmental clinic
4license shall be four hundred dollars ($400) and may be increased
5to five hundred twenty dollars ($520) for each license. The annual
6fee for renewal of the license shall be two hundred fifty dollars
7($250) and may be increased to three hundred twenty-five dollars
8($325) for each license.

9(r) The fee for the issuance of a pharmacy technician license
10shall be eighty dollars ($80) and may be increased to one hundred
11five dollars ($105). The fee for renewal of a pharmacy technician
12license shall be one hundred dollars ($100) and may be increased
13to one hundred thirty dollars ($130).

14(s) The fee for a veterinary food-animal drug retailer license
15shall be four hundred five dollars ($405) and may be increased to
16four hundred twenty-five dollars ($425). The annual renewal fee
17for a veterinary food-animal drug retailer license shall be two
18hundred fifty dollars ($250) and may be increased to three hundred
19twenty-five dollars ($325).

20(t) The fee for issuance of a retired license pursuant to Section
214200.5 shall be thirty-five dollars ($35) and may be increased to
22forty-five dollars ($45).

23(u) The fee for issuance or renewal of a nongovernmental sterile
24compounding pharmacy license shall be six hundred dollars ($600)
25and may be increased to seven hundred eighty dollars ($780). The
26fee for a temporary license shall be five hundred fifty dollars ($550)
27and may be increased to seven hundred fifteen dollars ($715).

28(v) The fee for the issuance or renewal of a nonresident sterile
29compounding pharmacy license shall be seven hundred eighty
30dollars ($780). In addition to paying that application fee, the
31nonresident sterile compounding pharmacy shall deposit, when
32submitting the application, a reasonable amount, as determined by
33the board, necessary to cover the board’s estimated cost of
34performing the inspection required by Section 4127.2. If the
35required deposit is not submitted with the application, the
36application shall be deemed to be incomplete. If the actual cost of
37the inspection exceeds the amount deposited, the board shall
38provide to the applicant a written invoice for the remaining amount
39and shall not take action on the application until the full amount
40has been paid to the board. If the amount deposited exceeds the
P32   1amount of actual and necessary costs incurred, the board shall
2remit the difference to the applicant.

3(w) This section shall become operative on July 1, 2014.

4

begin deleteSEC. 31.end delete
5begin insertSEC. 32.end insert  

No reimbursement is required by this act pursuant
6to Section 6 of Article XIII B of the California Constitution because
7the only costs that may be incurred by a local agency or school
8district will be incurred because this act creates a new crime or
9infraction, eliminates a crime or infraction, or changes the penalty
10for a crime or infraction, within the meaning of Section 17556 of
11the Government Code, or changes the definition of a crime within
12the meaning of Section 6 of Article XIII B of the California
13Constitution.



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