Amended in Senate August 22, 2014

Amended in Senate August 6, 2014

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 Sections 208, 4040.5, 4043, 4060, 4081, 4101, 4105, 4120, 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 add Sectionsbegin delete 4022.7,4044.5,end deletebegin insert 4022.7, 4044.5,end insert 4053.1,begin delete 4107,end deletebegin insert 4107.5,end insert and 4161.5 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. Existing law requires a wholesaler to have a pharmacist or designated representative on its premises and to be supervised or managed by a designated representative-in-charge. Existing law 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. 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 of the terms “third-party logistics provider” and “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. The bill would require a third-party logistics provider to be supervised and managed by a responsible manager who would need to be licensed by the board as a designated representative-3PL. Under the bill, a designated representative-3PL and a responsible manager would be subject to similar requirements as those imposed on a designated representative and a designated representative-in-charge, respectively. The bill would limit a place of business to a single board-issued license, except for entities under common ownership that meet specified requirements, and would require that at least one designated representative, in the case of a wholesaler, or designated representative-3PL, 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. The bill would enact parallel requirements with respect to nonresident third-party logistics providers and would make related conforming changes and delete obsolete provisions. After specified federal regulations under the federal Drug Supply Chain Security Act are promulgated, the bill would require the board to act to identify any California laws governing interstate commerce in conflict with those regulations and act to remove the conflict.

Existing law makes a wholesaler that uses the services of a carrier liable for the security and integrity of any dangerous drug or devices through that carrier until the drugs or devices are delivered to the transferee.

This bill would extend that liability when the wholesaler uses the services of a third-party logistics provider and would require a third-party logistics provider that uses the services of a carrier to have in place and comply with specified written policies and procedures.

(2) Existing law requires that all records of manufacture and of sale, acquisition, or disposition of dangerous drugs or dangerous devices be open to inspection by authorized officers of the law during business hours and be preserved for at least 3 years.

This bill would make those requirements also applicable to records of receipt and shipment of dangerous drugs and dangerous devices. 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.

(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:

P4    1

SECTION 1.  

Section 208 of the Business and Professions Code
2 is amended to read:

3

208.  

(a) Beginning April 1, 2014, a CURES fee of six dollars
4($6) shall be assessed annually on each of the licensees specified
5in subdivision (b) to pay the reasonable costs associated with
6operating and maintaining CURES for the purpose of regulating
7those licensees. The fee assessed pursuant to this subdivision shall
8be billed and collected by the regulating agency of each licensee
9at the time of the licensee’s license renewal. If the reasonable
10regulatory cost of operating and maintaining CURES is less than
11six dollars ($6) per licensee, the Department of Consumer Affairs
12may, by regulation, reduce the fee established by this section to
13the reasonable regulatory cost.

14(b) (1) Licensees authorized pursuant to Section 11150 of the
15Health and Safety Code to prescribe, order, administer, furnish,
16or dispense Schedule II, Schedule III, or Schedule IV controlled
17substances or pharmacists licensed pursuant to Chapter 9
18(commencing with Section 4000) of Division 2.

19(2) Wholesalers, third-party logistics providers, nonresident
20wholesalers, and nonresident third-party logistics providers of
21dangerous drugs licensed pursuant to Article 11 (commencing with
22Section 4160) of Chapter 9 of Division 2.

23(3) Nongovernmental clinics licensed pursuant to Article 13
24(commencing with Section 4180) and Article 14 (commencing
25with Section 4190) of Chapter 9 of Division 2.

26(4) Nongovernmental pharmacies licensed pursuant to Article
277 (commencing with Section 4110) of Chapter 9 of Division 2.

28(c) The funds collected pursuant to subdivision (a) shall be
29deposited in the CURES Fund, which is hereby created within the
30State Treasury. Moneys in the CURES Fund shall, upon
31appropriation by the Legislature, be available to the Department
32of Consumer Affairs to reimburse the Department of Justice for
33costs to operate and maintain CURES for the purposes of regulating
34the licensees specified in subdivision (b).

35(d) The Department of Consumer Affairs shall contract with
36the Department of Justice on behalf of the Medical Board of
37California, the Dental Board of California, the California State
38Board of Pharmacy, the Veterinary Medical Board, the Board of
P5    1 Registered Nursing, the Physician Assistant Board of the Medical
2Board of California, the Osteopathic Medical Board of California,
3the Naturopathic Medicine Committee of the Osteopathic Medical
4Board, the State Board of Optometry, and the California Board of
5Podiatric Medicine to operate and maintain CURES for the
6purposes of regulating the licensees specified in subdivision (b).

7

SEC. 2.  

Section 4022.7 is added to the Business and Professions
8Code
, to read:

9

4022.7.  

(a) “Designated representative-3PL” means an
10individual to whom a license has been granted pursuant to Section
114053.1.

12(b) “Responsible manager” means a designated
13representative-3PL selected by a third-party logistics provider and
14approved by the board as responsible for ensuring compliance of
15the licensed place of business with state and federal laws with
16respect to dangerous drugs and dangerous devices received by,
17stored in, or shipped from the licensed place of business of the
18third-party logistics provider.

19

SEC. 3.  

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

21

4040.5.  

“Reverse distributor” means every person who acts as
22an agent for pharmacies, drug wholesalers, third-party logistics
23providers, manufacturers, and other entities by receiving,
24inventorying, warehousing, and managing the disposition of
25outdated or nonsaleable dangerous drugs.

26

SEC. 4.  

Section 4043 of the Business and Professions Code is
27amended to read:

28

4043.  

“Wholesaler” means and includes a person who acts as
29a wholesale merchant, broker, jobber, customs broker, reverse
30distributor, agent, or a nonresident wholesaler, who sells for resale,
31or negotiates for distribution, or takes possession of, any drug or
32device included in Section 4022. Unless otherwise authorized by
33law, a wholesaler may not store, warehouse, or authorize the
34storage or warehousing of drugs with any person or at any location
35not licensed by the board.

36

SEC. 5.  

Section 4044.5 is added to the Business and Professions
37Code
, to read:

38

4044.5.  

“Reverse third-party logistics provider” means an entity
39that processes or manages the disposition of an outdated or
40nonsaleable dangerous drug or dangerous device on behalf of a
P6    1manufacturer, wholesaler, or dispenser of the dangerous drug or
2dangerous device, but does not take ownership of the dangerous
3drug or dangerous device nor have the responsibility to direct its
4sale or disposition. Unless otherwise specified in this chapter,
5every provision of this chapter that applies to a third-party logistics
6provider shall also apply to a reverse third-party logistics provider.

7

SEC. 6.  

Section 4045 of the Business and Professions Code is
8repealed.

9

SEC. 7.  

Section 4045 is added to the Business and Professions
10Code
, to read:

11

4045.  

“Third-party logistics provider” means an entity that
12provides or coordinates warehousing or other logistics services
13for a dangerous drug or dangerous device in intrastate or interstate
14commerce on behalf of a manufacturer, wholesaler, or dispenser
15of the dangerous drug or dangerous device, but does not take
16ownership of the dangerous drug or dangerous device, nor have
17responsibility to direct its sale or disposition.

18

SEC. 8.  

Section 4053.1 is added to the Business and Professions
19Code
, to read:

20

4053.1.  

(a) Notwithstanding Section 4051, the board may issue
21a license to a qualified individual as a designated
22representative-3PL to provide sufficient and qualified supervision
23of a third-party logistics provider’s place of business. The
24designated representative-3PL shall protect the public health and
25safety in the handling, storage, warehousing, distribution, and
26shipment of dangerous drugs and dangerous devices in the
27third-party logistics provider’s place of business.

28(b) An individual who is at least 18 years of age may apply for
29a designated representative-3PL license. In order to obtain and
30maintain that license, the individual shall meet all of the following
31requirements:

32(1) He or she shall be a high school graduate or possess a general
33education development certificate equivalent.

34(2) He or she shall meet one of the following requirements:

35(A) Have a minimum of one year of paid work experience in
36the past three years with a third-party logistics provider.

37(B) Have a minimum of one year of paid work experience in
38the past three years in a licensed pharmacy, or with a drug
39wholesaler, drug distributor, or drug manufacturer, performing
P7    1duties related to the distribution or dispensing of dangerous drugs
2or dangerous devices.

3(C) Meet all of the prerequisites to take the examination required
4for licensure as a pharmacist by the board.

5(3) (A) He or she shall complete a training program approved
6by the board that, at a minimum, addresses each of the following
7subjects:

8(i) Knowledge and understanding of California law and federal
9law relating to the distribution of dangerous drugs and dangerous
10devices.

11(ii) Knowledge and understanding of California law and federal
12law relating to the distribution of controlled substances.

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

14(iv) Knowledge and understanding of the United States
15Pharmacopoeia or federal Food and Drug Administration standards
16relating to the safe storage, handling, and transport of dangerous
17drugs and dangerous devices.

18(B) The board may, by regulation, require the training program
19required under this paragraph to include additional material.

20(C) The board shall not issue a license as a designated
21representative-3PL until the applicant provides proof of completion
22of the training required by this paragraph to the board.

23(c) A third-party logistics provider shall not operate without at
24least one designated representative-3PL present at each of its
25licensed places of business as required under Section 4160.

26

SEC. 9.  

Section 4060 of the Business and Professions Code is
27amended to read:

28

4060.  

A person shall not possess any controlled substance,
29except that furnished to a person upon the prescription of a
30physician, dentist, podiatrist, optometrist, veterinarian, or
31naturopathic doctor pursuant to Section 3640.7, or furnished
32pursuant to a drug order issued by a certified nurse-midwife
33pursuant to Section 2746.51, a nurse practitioner pursuant to
34Section 2836.1, a physician assistant pursuant to Section 3502.1,
35a naturopathic doctor pursuant to Section 3640.5, or a pharmacist
36pursuant to Section 4052.1, 4052.2, or 4052.6. This section does
37not apply to the possession of any controlled substance by a
38manufacturer, wholesaler, third-party logistics provider, pharmacy,
39pharmacist, physician, podiatrist, dentist, optometrist, veterinarian,
40naturopathic doctor, certified nurse-midwife, nurse practitioner,
P8    1or physician assistant, if in stock in containers correctly labeled
2with the name and address of the supplier or producer.

3This section does not authorize a certified nurse-midwife, a nurse
4practitioner, a physician assistant, or a naturopathic doctor, to order
5his or her own stock of dangerous drugs and devices.

6

SEC. 10.  

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

8

4081.  

(a) All records of manufacture and of sale, acquisition,
9receipt, shipment, or disposition of dangerous drugs or dangerous
10devices shall be at all times during business hours open to
11inspection by authorized officers of the law, and shall be preserved
12for at least three years from the date of making. A current inventory
13shall be kept by every manufacturer, wholesaler, third-party
14logistics provider, pharmacy, veterinary food-animal drug retailer,
15physician, dentist, podiatrist, veterinarian, laboratory, clinic,
16hospital, institution, or establishment holding a currently valid and
17unrevoked certificate, license, permit, registration, or exemption
18under Division 2 (commencing with Section 1200) of the Health
19and Safety Code or under Part 4 (commencing with Section 16000)
20of Division 9 of the Welfare and Institutions Code who maintains
21a stock of dangerous drugs or dangerous devices.

22(b) The owner, officer, and partner of a pharmacy, wholesaler,
23third-party logistics provider, or veterinary food-animal drug
24retailer shall be jointly responsible, with the pharmacist-in-charge,
25responsible manager, or designated representative-in-charge, for
26maintaining the records and inventory described in this section.

27(c) The pharmacist-in-charge, responsible manager, or
28designated representative-in-charge shall not be criminally
29responsible for acts of the owner, officer, partner, or employee
30that violate this section and of which the pharmacist-in-charge,
31responsible manager, or designated representative-in-charge had
32 no knowledge, or in which he or she did not knowingly participate.

33

SEC. 11.  

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

35

4101.  

(a) A pharmacist may take charge of and act as the
36pharmacist-in-charge of a pharmacy upon application by the
37pharmacy and approval by the board. A pharmacist-in-charge who
38ceases to act as the pharmacist-in-charge of the pharmacy shall
39notify the board in writing within 30 days of the date of that change
40in status.

P9    1(b) A designated representative or a pharmacist may take charge
2of, and act as, the designated representative-in-charge of a
3wholesaler or veterinary food-animal drug retailer upon application
4by the wholesaler or veterinary food-animal drug retailer and
5approval by the board. A designated representative-in-charge who
6ceases to act as the designated representative-in-charge at that
7 entity shall notify the board in writing within 30 days of the date
8of that change in status.

9(c) A designated representative-3PL may take charge of, and
10act as, the responsible manager of a third-party logistics provider
11upon application by the third-party logistics provider and approval
12by the board. A responsible manager who ceases to act as the
13responsible manager at that entity shall notify the board in writing
14within 30 days of the date of that change in status.

15

SEC. 12.  

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

17

4105.  

(a) All records or other documentation of the acquisition
18and disposition of dangerous drugs and dangerous devices by any
19entity licensed by the board shall be retained on the licensed
20premises in a readily retrievable form.

21(b) The licensee may remove the original records or
22documentation from the licensed premises on a temporary basis
23for license-related purposes. However, a duplicate set of those
24records or other documentation shall be retained on the licensed
25premises.

26(c) The records required by this section shall be retained on the
27licensed premises for a period of three years from the date of
28making.

29(d) (1) Any records that are maintained electronically shall be
30maintained so that the pharmacist-in-charge, or the pharmacist on
31duty if the pharmacist-in-charge is not on duty, shall, at all times
32during which the licensed premises are open for business, be able
33to produce a hardcopy and electronic copy of all records of
34acquisition or disposition or other drug or dispensing-related
35records maintained electronically.

36(2) In the case of a veterinary food-animal drug retailer,
37wholesaler, or third-party logistics provider, any records that are
38maintained electronically shall be maintained so that the designated
39representative-in-charge or the responsible manager, or the
40designated representative on duty or the designated
P10   1representative-3PL on duty if the designated
2representative-in-charge or responsible manager is not on duty,
3shall, at all times during which the licensed place of business is
4open for business, be able to produce a hardcopy and electronic
5copy of all records of acquisition or disposition or other drug or
6dispensing-related records maintained electronically.

7(e) (1) Notwithstanding subdivisions (a), (b), and (c), the board
8may, upon written request, grant to a licensee a waiver of the
9requirements that the records described in subdivisions (a), (b),
10and (c) be kept on the licensed premises.

11(2) A waiver granted pursuant to this subdivision shall not affect
12the board’s authority under this section or any other provision of
13this chapter.

14(f) When requested by an authorized officer of the law or by an
15authorized representative of the board, the owner, corporate officer,
16or manager of an entity licensed by the board shall provide the
17board with the requested records within three business days of the
18time the request was made. The entity may request in writing an
19extension of this timeframe for a period not to exceed 14 calendar
20days from the date the records were requested. A request for an
21extension of time is subject to the approval of the board. An
22extension shall be deemed approved if the board fails to deny the
23extension request within two business days of the time the
24extension request was made directly to the board.

25

SEC. 13.  

Sectionbegin delete 4107end deletebegin insert 4107.5end insert is added to the Business and
26Professions Code
, to read:

27

begin delete4107.end delete
28begin insert4107.5.end insert  

If a manufacturer, wholesaler, third-party logistics
29provider, or pharmacy has reasonable cause to believe that a
30dangerous drug or dangerous device in, or having been in, its
31possession is counterfeit or the subject of a fraudulent transaction,
32the manufacturer, wholesaler, third-party logistics provider, or
33pharmacy shall notify the board within 72 hours of obtaining that
34knowledge. This section shall apply to any dangerous drug or
35dangerous device that has been sold or distributed in or through
36this state.

37

SEC. 14.  

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

39

4120.  

(a) A nonresident pharmacy shall not sell or distribute
40dangerous drugs or dangerous devices in this state through any
P11   1person or media other than a wholesaler or third-party logistics
2provider who has obtained a license pursuant to this chapter or
3through a selling or distribution outlet that is licensed as a
4wholesaler or third-party logistics provider pursuant to this chapter
5without registering as a nonresident pharmacy.

6(b) Applications for a nonresident pharmacy registration shall
7be made on a form furnished by the board. The board may require
8any information as the board deems reasonably necessary to carry
9out the purposes of this section.

10(c) The Legislature, by enacting this section, does not intend a
11license issued to any nonresident pharmacy pursuant to this section
12to change or affect the tax liability imposed by Chapter 3
13(commencing with Section 23501) of Part 11 of Division 2 of the
14Revenue and Taxation Code on any nonresident pharmacy.

15(d) The Legislature, by enacting this section, does not intend a
16license issued to any nonresident pharmacy pursuant to this section
17to serve as any evidence that the nonresident pharmacy is doing
18business within this state.

19

SEC. 15.  

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

21

4149.  

(a) A nonresident distributor shall not sell or distribute
22hypodermic needles or syringes in this state without obtaining a
23license from the board pursuant to Section 4141.

24(b) Notwithstanding subdivision (a), a license is not required if
25the nonresident distributor sells or distributes solely through a
26person who is licensed as a wholesaler or third-party logistics
27provider pursuant to Section 4160.

28(c) The Legislature, by enacting this section, does not intend a
29license issued to any nonresident distributor pursuant to this article
30to serve as evidence that the entity is doing business within this
31state.

32

SEC. 16.  

The heading of Article 11 (commencing with Section
334160) of Chapter 9 of Division 2 of the Business and Professions
34Code
is amended to read:

35 

36Article 11.  Wholesalers, Third-Party Logistics Providers, and
37Manufacturers
38

 

39

SEC. 17.  

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

P12   1

4160.  

(a) A person shall not act as a wholesaler or third-party
2logistics provider of any dangerous drug or dangerous device unless
3he or she has obtained a license from the board.

4(b) Upon approval by the board and the payment of the required
5fee, the board shall issue a license to the applicant.

6(c) (1) A separate license shall be required for each place of
7business owned or operated by a wholesaler or third-party logistics
8provider. Each place of business may only be issued a single license
9by the board, except as provided in paragraph (2). Each license
10shall be renewed annually and shall not be transferable. At all
11 times during which a place of business is open for business, at
12least one designated representative, in the case of a wholesaler, or
13designated representative-3PL in the case of a third-party logistics
14provider, shall be present.

15(2) A wholesaler and a third-party logistics provider under
16common ownership may be licensed at the same place of business
17provided that all of the following requirements are satisfied:

18(A) The wholesaler and the third-party logistics provider each
19separately maintain the records required under Section 4081.

20(B) Dangerous drugs and dangerous devices owned by the
21wholesaler are not commingled with the dangerous drugs and
22dangerous devices handled by the third-party logistics provider.

23(C) Any individual acting as a designated representative for the
24wholesaler is not concurrently acting as a designated
25representative-3PL on behalf of the third-party logistics provider.
26Nothing in this subparagraph shall be construed to prohibit an
27individual from concurrently holding a license to act as a
28designated representative and to act as a designated
29representative-3PL.

30(D) The wholesaler has its own designated
31representative-in-charge responsible for the operations of the
32wholesaler and the third-party logistics provider has its own
33responsible manager responsible for the operations of the
34third-party logistics provider. The same individual shall not
35concurrently serve as the responsible manager and the designated
36representative-in-charge for a wholesaler and a third-party logistics
37provider licensed at the same place of business.

38(E) The third-party logistics provider does not handle the
39prescription drugs or prescription devices owned by a prescriber.

P13   1(F) The third-party logistics provider is not a reverse third-party
2logistics provider.

3(G) The wholesaler is not acting as a reverse distributor.

4(d) Every wholesaler shall be supervised or managed by a
5designated representative-in-charge. The designated
6representative-in-charge shall be responsible for the wholesaler’s
7compliance with state and federal laws governing wholesalers. As
8part of its initial application for a license, and for each renewal,
9each wholesaler shall, on a form designed by the board, provide
10identifying information and the California license number for a
11designated representative or pharmacist proposed to serve as the
12designated representative-in-charge. The proposed designated
13representative-in-charge shall be subject to approval by the board.
14The board shall not issue or renew a wholesaler license without
15identification of an approved designated representative-in-charge
16for the wholesaler. The designated representative-in-charge shall
17maintain an active license as a designated representative with the
18board at all times during which he or she is designated as the
19designated representative-in-charge.

20(e) Each place of business of a third-party logistics provider
21shall be supervised and managed by a responsible manager. The
22responsible manager shall be responsible for the compliance of
23the place of business with state and federal laws governing
24third-party logistics providers and with the third-party logistics
25provider’s customer specifications, except where the customer’s
26specifications conflict with state or federal laws. As part of its
27initial application for a license, and for each renewal, each
28third-party logistics provider shall, on a form designated by the
29board, provide identifying information and the California license
30number for a designated representative-3PL proposed to serve as
31the responsible manager. The proposed responsible manager shall
32be subject to approval by the board. The board shall not issue or
33renew a third-party logistics provider license without identification
34of an approved responsible manager for the third-party logistics
35provider. The responsible manager shall maintain an active license
36as a designated representative-3PL with the board at all times
37during which he or she is designated as the responsible manager.

38(f) A wholesaler shall notify the board in writing, on a form
39designed by the board, within 30 days of the date when a
40designated representative-in-charge ceases to act as the designated
P14   1representative-in-charge, and shall on the same form propose
2another designated representative or pharmacist to take over as
3the designated representative-in-charge. The proposed replacement
4designated representative-in-charge shall be subject to approval
5by the board. If disapproved, the wholesaler shall propose another
6replacement within 15 days of the date of disapproval, and shall
7continue to name proposed replacements until a designated
8representative-in-charge is approved by the board.

9(g) A third-party logistics provider shall notify the board in
10writing, on a form designed by the board, within 30 days of the
11date when a responsible manager ceases to act as the responsible
12manager, and shall on the same form propose another designated
13representative-3PL to take over as the responsible manager. The
14proposed replacement responsible manager shall be subject to
15approval by the board. If disapproved, the third-party logistics
16provider shall propose another replacement within 15 days of the
17date of disapproval, and shall continue to name proposed
18replacements until a responsible manager is approved by the board.

19(h) A drug manufacturer premises licensed by the Food and
20Drug Administration or licensed pursuant to Section 111615 of
21the Health and Safety Code that only distributes dangerous drugs
22and dangerous devices of its own manufacture is exempt from this
23section and Section 4161.

24(i) The board may issue a temporary license, upon conditions
25and for periods of time as the board determines to be in the public
26interest. A temporary license fee shall be required in an amount
27established by the board as specified in subdivision (f) of Section
284400. When needed to protect public safety, a temporary license
29may be issued for a period not to exceed 180 days, subject to terms
30and conditions that the board deems necessary. If the board
31determines that a temporary license was issued by mistake or denies
32the application for a permanent license, the temporary license shall
33terminate upon either personal service of the notice of termination
34upon the licenseholder or service by certified mail, return receipt
35requested, at the licenseholder’s address of record with the board,
36whichever occurs first. Neither for purposes of retaining a
37temporary license, nor for purposes of any disciplinary or license
38denial proceeding before the board, shall the temporary
39licenseholder be deemed to have a vested property right or interest
40in the license.

P15   1

SEC. 18.  

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

3

4161.  

(a) A person located outside this state that (1) ships,
4sells, mails, warehouses, distributes, or delivers dangerous drugs
5or dangerous devices into this state or (2) sells, brokers,
6warehouses, or distributes dangerous drugs or devices within this
7state shall be considered a nonresident wholesaler or a nonresident
8third-party logistics provider.

9(b) A nonresident wholesaler or nonresident third-party logistics
10provider shall be licensed by the board prior to shipping, selling,
11mailing, warehousing, distributing, or delivering dangerous drugs
12or dangerous devices to a site located in this state or selling,
13brokering, warehousing, or distributing dangerous drugs or devices
14within this state.

15(c) (1) A separate license shall be required for each place of
16business owned or operated by a nonresident wholesaler or
17nonresident third-party logistics provider from or through which
18dangerous drugs or dangerous devices are shipped, sold, mailed,
19warehoused, distributed, or delivered to a site located in this state
20 or sold, brokered, warehoused, or distributed within this state.
21Each place of business may only be issued a single license by the
22board, except as provided in paragraph (2). A license shall be
23renewed annually and shall not be transferable.

24(2) A nonresident wholesaler and a nonresident third-party
25logistics provider under common ownership may be licensed at
26the same place of business provided that all of the following
27requirements are satisfied:

28(A) The wholesaler and the third-party logistics provider each
29separately maintain the records required under Section 4081.

30(B) Dangerous drugs and dangerous devices owned by the
31wholesaler are not commingled with the dangerous drugs and
32dangerous devices handled by the third-party logistics provider.

33(C) Any individual acting as a designated representative for the
34wholesaler is not concurrently acting as a designated
35representative-3PL on behalf of the third-party logistics provider.
36Nothing in this subparagraph shall be construed to prohibit an
37 individual from concurrently holding a license to act as a
38designated representative and to act as a designated
39representative-3PL.

P16   1(D) The wholesaler has its own designated
2representative-in-charge responsible for the operations of the
3wholesaler and the third-party logistics provider has its own
4responsible manager responsible for the operations of the
5third-party logistics provider. The same individual shall not
6concurrently serve as the responsible manager and the designated
7representative-in-charge for a wholesaler and a third-party logistics
8provider licensed at the same place of business.

9(E) The third-party logistics provider does not handle the
10prescription drugs or prescription devices owned by a prescriber.

11(F) The third-party logistics provider is not a reverse third-party
12logistics provider.

13(G) The wholesaler is not acting as a reverse distributor.

14(d) The following information shall be reported, in writing, to
15the board at the time of initial application for licensure by a
16nonresident wholesaler or a nonresident third-party logistics
17provider, on renewal of a nonresident wholesaler or nonresident
18third-party logistics provider license, or within 30 days of a change
19in that information:

20(1) Its agent for service of process in this state.

21(2) Its principal corporate officers, as specified by the board, if
22any.

23(3) Its general partners, as specified by the board, if any.

24(4) Its owners if the applicant is not a corporation or partnership.

25(e) A report containing the information in subdivision (d) shall
26be made within 30 days of any change of ownership, office,
27corporate officer, or partner.

28(f) A nonresident wholesaler or nonresident third-party logistics
29provider shall comply with all directions and requests for
30information from the regulatory or licensing agency of the state
31in which it is licensed, as well as with all requests for information
32made by the board.

33(g) A nonresident wholesaler or nonresident third-party logistics
34provider shall maintain records of dangerous drugs and dangerous
35devices sold, traded, transferred, warehoused, or distributed to
36persons in this state or within this state, so that the records are in
37a readily retrievable form.

38(h) A nonresident wholesaler or nonresident third-party logistics
39provider shall at all times maintain a valid, unexpired license,
40permit, or registration to conduct the business of the wholesaler
P17   1or nonresident third-party logistics provider in compliance with
2the laws of the state in which it is a resident. An application for a
3nonresident wholesaler or nonresident third-party logistics provider
4license in this state shall include a license verification from the
5licensing authority in the applicant’s state of residence.

6(i) (1) The board shall not issue or renew a nonresident
7wholesaler license until the nonresident wholesaler identifies a
8designated representative-in-charge and notifies the board in
9writing of the identity and license number of the designated
10representative-in-charge.

11(2) The board shall not issue or renew a nonresident third-party
12logistics provider license until the nonresident third-party logistics
13provider identifies a responsible manager and notifies the board
14in writing of the identity and license number of the designated
15representative-3PL who will be the responsible manager.

16(j) The designated representative-in-charge shall be responsible
17for the compliance of the nonresident wholesaler with state and
18federal laws governing wholesalers. The responsible manager shall
19be responsible for the compliance of the nonresident third-party
20logistics provider’s place of business with state and federal laws
21governing third-party logistics providers. A nonresident wholesaler
22or nonresident third-party logistics provider shall identify and
23notify the board of a new designated representative-in-charge or
24 responsible manager within 30 days of the date that the prior
25designated representative-in-charge or responsible manager ceases
26to be the designated representative-in-charge or responsible
27manager.

28(k) The board may issue a temporary license, upon conditions
29and for periods of time as the board determines to be in the public
30interest. A temporary license fee shall be five hundred fifty dollars
31($550) or another amount established by the board not to exceed
32the annual fee for renewal of a license to compound injectable
33sterile drug products. When needed to protect public safety, a
34temporary license may be issued for a period not to exceed 180
35days, subject to terms and conditions that the board deems
36necessary. If the board determines that a temporary license was
37issued by mistake or denies the application for a permanent license,
38the temporary license shall terminate upon either personal service
39of the notice of termination upon the licenseholder or service by
40certified mail, return receipt requested, at the licenseholder’s
P18   1address of record with the board, whichever occurs first. Neither
2for purposes of retaining a temporary license, nor for purposes of
3any disciplinary or license denial proceeding before the board,
4shall the temporary licenseholder be deemed to have a vested
5property right or interest in the license.

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

8

SEC. 19.  

Section 4161.5 is added to the Business and
9Professions Code
, to read:

10

4161.5.  

At such time as federal regulations are promulgated
11to implement Section 584 of the federal Food, Drug, and Cosmetic
12Act (21 U.S.C. Sec. 360eee-3), the board shall immediately identify
13any standard, requirement, or regulation in California law
14governing interstate commerce that is in conflict with the federal
15regulations and act to remove the conflict in the manner permitted
16by law.

17

SEC. 20.  

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

19

4162.  

(a) (1) An applicant for the issuance or renewal of a
20wholesaler license, which is not government owned and operated,
21shall submit a surety bond of one hundred thousand dollars
22($100,000) or other equivalent means of security acceptable to the
23board payable to the Pharmacy Board Contingent Fund. The
24purpose of the surety bond is to secure payment of any
25administrative fine imposed by the board and any cost recovery
26ordered pursuant to Section 125.3.

27(2) An applicant for the issuance or renewal of a third-party
28logistics provider license, which is not government owned and
29operated, shall submit a surety bond of ninety thousand dollars
30($90,000) or other equivalent means of security acceptable to the
31board payable to the Pharmacy Board Contingent Fund. The
32purpose of the surety bond is to secure payment of any
33administrative fine imposed by the board and any cost recovery
34ordered pursuant to Section 125.3.

35(3) For purposes of paragraphs (1) and (2), the board may accept
36a surety bond less than the amount required under paragraph (1)
37or (2) 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).

P19   1(4) A person to whom an approved new drug application has
2been issued by the United States Food and Drug Administration
3who engages in the wholesale distribution of only the dangerous
4drug specified in the new drug application, and is licensed or
5applies for licensure as a wholesaler or third-party logistics
6provider, shall not be required to post a surety bond as provided
7in paragraph (1) or (2).

8(5) For licensees subject to paragraph (3) or (4), the board may
9require a bond up to one hundred thousand dollars ($100,000) for
10any licensee who has been disciplined by any state or federal
11agency or has been issued an administrative fine pursuant to this
12chapter.

13(b) The board may make a claim against the bond if the licensee
14fails to pay a fine within 30 days after the order imposing the fine,
15or costs become final.

16(c) A single surety bond or other equivalent means of security
17acceptable to the board shall satisfy the requirement of subdivision
18(a) for all licensed sites under common control as defined in
19Section 4126.5.

20

SEC. 21.  

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

22

4162.5.  

(a) (1) An applicant for the issuance or renewal of a
23nonresident wholesaler license shall submit a surety bond of one
24hundred thousand dollars ($100,000), or other equivalent means
25of security acceptable to the board, such as an irrevocable letter
26of credit, or a deposit in a trust account or financial institution,
27payable to the Pharmacy Board Contingent Fund. The purpose of
28the surety bond is to secure payment of any administrative fine
29imposed by the board and any cost recovery ordered pursuant to
30Section 125.3.

31(2) An applicant for the issuance or renewal of a nonresident
32third-party logistics provider license shall submit a surety bond of
33ninety thousand dollars ($90,000), or other equivalent means of
34security acceptable to the board, such as an irrevocable letter of
35credit, or a deposit in a trust account or financial institution,
36payable to the Pharmacy Board Contingent Fund. The purpose of
37the surety bond is to secure payment of any administrative fine
38imposed by the board and any cost recovery ordered pursuant to
39Section 125.3.

P20   1(3) For purposes of paragraphs (1) and (2), the board may accept
2a surety bond less than the amount required under paragraph (1)
3or (2) if the annual gross receipts of the previous tax year for the
4nonresident wholesaler or the nonresident third-party logistics
5provider is ten million dollars ($10,000,000) or less, in which case
6the surety bond shall be twenty-five thousand dollars ($25,000).

7(4) For applicants who satisfy paragraph (3), the board may
8require a bond up to one hundred thousand dollars ($100,000) for
9any nonresident wholesaler or nonresident third-party logistics
10provider who has been disciplined by any state or federal agency
11or has been issued an administrative fine pursuant to this chapter.

12(5) A person to whom an approved new drug application or a
13biologics license application has been issued by the United States
14Food and Drug Administration who engages in the wholesale
15distribution of only the dangerous drug specified in the new drug
16application or biologics license application, and is licensed or
17applies for licensure as a nonresident wholesaler or a nonresident
18third-party logistics provider, shall not be required to post a surety
19bond as provided in this section.

20(b) The board may make a claim against the bond if the licensee
21fails to pay a fine within 30 days of the issuance of the fine or
22when the costs become final.

23(c) A single surety bond or other equivalent means of security
24acceptable to the board shall satisfy the requirement of subdivision
25(a) for all licensed sites under common control as defined in
26Section 4126.5.

27

SEC. 22.  

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

29

4164.  

(a) A wholesaler or third-party logistics provider licensed
30by the board that distributes controlled substances, dangerous
31drugs, or dangerous devices within or into this state shall report
32to the board all distributions of dangerous drugs and controlled
33substances that are subject to abuse, as determined by the board.

34(b) Each wholesaler shall develop and maintain a system for
35tracking individual sales of dangerous drugs at preferential or
36contract prices to pharmacies that primarily or solely dispense
37prescription drugs to patients of long-term care facilities. The
38system shall be capable of identifying purchases of any dangerous
39drug at preferential or contract prices by customers that vary
40significantly from prior ordering patterns for the same customer,
P21   1including by identifying purchases in the preceding 12 calendar
2months by that customer or similar customers and identifying
3current purchases that exceed prior purchases by either that
4customer or similar customers by a factor of 20 percent.

5(c) Upon written, oral, or electronic request by the board, a
6wholesaler shall furnish data tracked pursuant to subdivision (b)
7to the board in written, hardcopy, or electronic form. The board
8shall specify the dangerous drugs, the customers, or both the
9dangerous drugs and customers for which data are to be furnished,
10and the wholesaler shall have 30 calendar days to comply with the
11request.

12(d) As used in this section, “preferential or contract prices”
13means and refers to purchases by contract of dangerous drugs at
14prices below the market wholesale price for those drugs.

15

SEC. 23.  

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

17

4165.  

A wholesaler or third-party logistics provider licensed
18by the board who sells or transfers any dangerous drug or
19dangerous device into this state or who receives, by sale or
20otherwise, any dangerous drug or dangerous device from any
21person in this state shall, on request, furnish an authorized officer
22of the law with all records or other documentation of that sale or
23transfer.

24

SEC. 24.  

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

26

4166.  

(a) A wholesaler that uses the services of a third-party
27logistics provider or carrier, including, but not limited to, the
28United States Postal Service or a common carrier, shall be liable
29for the security and integrity of any dangerous drugs or dangerous
30devices through that provider or carrier until the drugs or devices
31are delivered to the transferee at its board-licensed premises.

32(b) A third-party logistics provider that uses the services of a
33carrier, including, but not limited to, the United States Postal
34Service or a common carrier, shall have in place and comply with
35written policies and procedures that provide for both of the
36following:

37(1) Verification that the third-party logistics provider, or the
38owner of the dangerous drugs or dangerous devices stored at the
39third-party logistics provider, has imposed obligations on the carrier
40that provide for the security and integrity of any dangerous drugs
P22   1or dangerous devices transported by the carrier until the drugs or
2devices are delivered to the transferee at its premises.

3(2) Confirmation, prior to shipping a dangerous drug or
4dangerous device, that the intended recipient is legally authorized
5to receive the dangerous drug or dangerous device.

6(c) Nothing in this section is intended to affect the liability of
7a wholesaler, third-party logistics provider, or other distributor for
8dangerous drugs or dangerous devices after their delivery to the
9transferee.

10

SEC. 25.  

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

12

4167.  

A wholesaler or third-party logistics provider shall not
13obtain, by purchase or otherwise, any dangerous drugs or dangerous
14devices that it cannot maintain, in a secure manner, at the place of
15business licensed by the board.

16

SEC. 26.  

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

18

4168.  

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

24

SEC. 27.  

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

SEC. 28.  

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

16

4201.  

(a) Each application to conduct a pharmacy, wholesaler,
17third-party logistics provider, or veterinary food-animal drug
18retailer, shall be made on a form furnished by the board, and shall
19state the name, address, usual occupation, and professional
20qualifications, if any, of the applicant. If the applicant is other than
21a natural person, the application shall state the information as to
22each person beneficially interested therein.

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

25(1) If the applicant is a partnership or other unincorporated
26association, each partner or member.

27(2) If the applicant is a corporation, each of its officers, directors,
28and stockholders, provided that no natural person shall be deemed
29to be beneficially interested in a nonprofit corporation.

30(3) If the applicant is a limited liability company, each officer,
31manager, or member.

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

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

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

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

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

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

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

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

37

SEC. 29.  

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

39

4305.5.  

(a) A person that is licensed as a wholesaler,
40third-party logistics provider, or veterinary food-animal drug
P25   1retailer, shall notify the board within 30 days of the termination
2of employment of the designated representative-in-charge or
3responsible manager. Failure to notify the board within the 30-day
4period shall constitute grounds for disciplinary action.

5(b) A person that is licensed as a wholesaler, third-party logistics
6provider, or veterinary food-animal drug retailer, that willfully
7fails to notify the board of the termination of employment of the
8designated representative-in-charge or responsible manager at its
9licensed place of business, and that continues to operate the place
10of business in the absence of the designated
11representative-in-charge or responsible manager for that place of
12business shall be subject to summary suspension or revocation of
13its license as a wholesaler, third-party logistics provider, or
14veterinary food-animal drug retailer at that place of business.

15(c) A designated representative-in-charge of a wholesaler or
16veterinary food-animal drug retailer, or a responsible manager of
17a third-party logistics provider, who terminates his or her
18employment at the licensed place of business, shall notify the board
19within 30 days of the termination of employment. Failure to notify
20the board within the 30-day period shall constitute grounds for
21disciplinary action.

22

SEC. 30.  

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

24

4312.  

(a) The board may cancel the license of a wholesaler,
25third-party logistics provider, pharmacy, or veterinary food-animal
26drug retailer if the licensed premises remain closed, as defined in
27subdivision (e), other than by order of the board. For good cause
28shown, the board may cancel a license after a shorter period of
29closure. To cancel a license pursuant to this subdivision, the board
30shall make a diligent, good faith effort to give notice by personal
31service on the licensee. If a written objection is not received within
3210 days after personal service is made or a diligent, good faith
33effort to give notice by personal service on the licensee has failed,
34the board may cancel the license without the necessity of a hearing.
35If the licensee files a written objection, the board shall file an
36 accusation based on the licensee remaining closed. Proceedings
37shall be conducted in accordance with Chapter 5 (commencing
38with Section 11500) of Part 1 of Division 3 of Title 2 of the
39Government Code, and the board shall have all the powers granted
40in that chapter.

P26   1(b) If the license of a wholesaler, third-party logistics provider,
2pharmacy, or veterinary food-animal drug retailer is canceled
3pursuant to subdivision (a) or revoked pursuant to Article 19
4(commencing with Section 4300), or a wholesaler, third-party
5logistics provider, pharmacy, or veterinary food-animal drug
6retailer notifies the board of its intent to remain closed or to
7discontinue business, the licensee shall, within 10 days thereafter,
8arrange for the transfer of all dangerous drugs and controlled
9substances or dangerous devices to another licensee authorized to
10possess the dangerous drugs and controlled substances or dangerous
11devices. The licensee transferring the dangerous drugs and
12controlled substances or dangerous devices shall immediately
13confirm in writing to the board that the transfer has taken place.

14(c) If a wholesaler, third-party logistics provider, pharmacy, or
15veterinary food-animal drug retailer fails to comply with
16subdivision (b), the board may seek and obtain an order from the
17superior court in the county in which the wholesaler, third-party
18logistics provider, pharmacy, or veterinary food-animal drug
19retailer is located, authorizing the board to enter the wholesaler,
20third-party logistics provider, pharmacy, or veterinary food-animal
21drug retailer and inventory and store, transfer, sell, or arrange for
22the sale of, all dangerous drugs and controlled substances and
23dangerous devices found in the wholesaler, third-party logistics
24provider, pharmacy, or veterinary food-animal drug retailer.

25(d) If the board sells or arranges for the sale of any dangerous
26drugs, controlled substances, or dangerous devices pursuant to
27subdivision (c), the board may retain from the proceeds of the sale
28an amount equal to the cost to the board of obtaining and enforcing
29an order issued pursuant to subdivision (c), including the cost of
30disposing of the dangerous drugs, controlled substances, or
31dangerous devices. The remaining proceeds, if any, shall be
32returned to the licensee from whose premises the dangerous drugs
33or controlled substances or dangerous devices were removed.

34(1) The licensee shall be notified of his or her right to the
35remaining proceeds by personal service or by certified mail,
36postage prepaid.

37(2) If a statute or regulation requires the licensee to file with
38the board his or her address, and any change of address, the notice
39required by this subdivision may be sent by certified mail, postage
40prepaid, to the latest address on file with the board and service of
P27   1notice in this manner shall be deemed completed on the 10th day
2after the mailing.

3(3) If the licensee is notified as provided in this subdivision,
4and the licensee fails to contact the board for the remaining
5proceeds within 30 calendar days after personal service has been
6made or service by certified mail, postage prepaid, is deemed
7completed, the remaining proceeds shall be deposited by the board
8into the Pharmacy Board Contingent Fund. These deposits shall
9be deemed to have been received pursuant to Chapter 7
10(commencing with Section 1500) of Title 10 of Part 3 of the Code
11of Civil Procedure and shall be subject to claim or other disposition
12as provided in that chapter.

13(e) For the purposes of this section, “closed” means not engaged
14in the ordinary activity for which a license has been issued for at
15least one day each calendar week during any 120-day period.

16(f) Nothing in this section shall be construed as requiring a
17pharmacy to be open seven days a week.

18

SEC. 31.  

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

20

4331.  

(a) A person who is not a pharmacist, a designated
21representative-in-charge, or a designated representative and who
22takes charge of a wholesaler or veterinary food-animal drug retailer
23or who dispenses a prescription or furnishes dangerous devices,
24except as otherwise provided in this chapter, is guilty of a
25misdemeanor.

26(b) A person who is not a responsible manager or a designated
27representative-3PL who takes charge of a third-party logistics
28provider or coordinates the warehousing or distribution of
29dangerous drugs or dangerous devices within a third-party logistics
30provider, except as otherwise provided in this chapter, is guilty of
31a misdemeanor.

32(c) A person licensed as a veterinary food-animal drug retailer
33that fails to place in charge of that veterinary food-animal drug
34retailer a pharmacist or designated representative, or any person
35who, by himself or herself, or by any other person, permits the
36dispensing of prescriptions, except by a pharmacist or designated
37representative, or as otherwise provided in this chapter, is guilty
38of a misdemeanor.

39(d) A person licensed as a wholesaler that fails to place in charge
40of that wholesaler a pharmacist or designated representative, or
P28   1any person who, by himself or herself, or by any other person,
2permits the furnishing of dangerous drugs or dangerous devices,
3except by a pharmacist or designated representative, or as otherwise
4provided in this chapter, is guilty of a misdemeanor.

5(e) A person licensed as a third-party logistics provider that fails
6to place in charge of a licensed place of business of the third-party
7logistics provider a responsible manager, or any person who, by
8himself or herself, or by any other person, permits the furnishing
9of dangerous drugs or dangerous devices, except by a facility
10manager, or as otherwise provided in this chapter, is guilty of a
11misdemeanor.

12

SEC. 32.  

Section 4400 of the Business and Professions Code,
13as added by Section 9 of Chapter 565 of the Statutes of 2013, is
14amended to read:

15

4400.  

The amount of fees and penalties prescribed by this
16chapter, except as otherwise provided, is that fixed by the board
17according to the following schedule:

18(a) The fee for a nongovernmental pharmacy license shall be
19four hundred dollars ($400) and may be increased to five hundred
20twenty dollars ($520). The fee for the issuance of a temporary
21nongovernmental pharmacy permit shall be two hundred fifty
22dollars ($250) and may be increased to three hundred twenty-five
23dollars ($325).

24(b) The fee for a nongovernmental pharmacy license annual
25renewal shall be two hundred fifty dollars ($250) and may be
26increased to three hundred twenty-five dollars ($325).

27(c) The fee for the pharmacist application and examination shall
28be two hundred dollars ($200) and may be increased to two
29hundred sixty dollars ($260).

30(d) The fee for regrading an examination shall be ninety dollars
31($90) and may be increased to one hundred fifteen dollars ($115).
32If an error in grading is found and the applicant passes the
33examination, the regrading fee shall be refunded.

34(e) The fee for a pharmacist license and biennial renewal shall
35be one hundred fifty dollars ($150) and may be increased to one
36hundred ninety-five dollars ($195).

37(f) The fee for a nongovernmental wholesaler or third-party
38logistics provider license and annual renewal shall be seven
39hundred eighty dollars ($780) and may be decreased to no less
40than six hundred dollars ($600). The application fee for any
P29   1additional location after licensure of the first 20 locations shall be
2three hundred dollars ($300) and may be decreased to no less than
3two hundred twenty-five dollars ($225). A temporary license fee
4shall be seven hundred fifteen dollars ($715) and may be decreased
5to no less than five hundred fifty dollars ($550).

6(g) The fee for a hypodermic license and renewal shall be one
7hundred twenty-five dollars ($125) and may be increased to one
8hundred sixty-five dollars ($165).

9(h) (1) The fee for application, investigation, and issuance of
10a license as a designated representative pursuant to Section 4053,
11or as a designated representative-3PL pursuant to Section 4053.1,
12shall be three hundred thirty dollars ($330) and may be decreased
13to no less than two hundred fifty-five dollars ($255).

14(2) The fee for the annual renewal of a license as a designated
15representative or designated representative-3PL shall be one
16hundred ninety-five dollars ($195) and may be decreased to no
17less than one hundred fifty dollars ($150).

18(i) (1) The fee for the application, investigation, and issuance
19of a license as a designated representative for a veterinary
20food-animal drug retailer pursuant to Section 4053 shall be three
21hundred thirty dollars ($330) and may be decreased to no less than
22two hundred fifty-five dollars ($255).

23(2) The fee for the annual renewal of a license as a designated
24representative for a veterinary food-animal drug retailer shall be
25one hundred ninety-five dollars ($195) and may be decreased to
26no less than one hundred fifty dollars ($150).

27(j) (1) The application fee for a nonresident wholesaler or
28third-party logistics provider license issued pursuant to Section
294161 shall be seven hundred eighty dollars ($780) and may be
30decreased to no less than six hundred dollars ($600).

31(2) For nonresident wholesalers or third-party logistics providers
32that have 21 or more facilities operating nationwide the application
33fees for the first 20 locations shall be seven hundred eighty dollars
34($780) and may be decreased to no less than six hundred dollars
35($600). The application fee for any additional location after
36licensure of the first 20 locations shall be three hundred dollars
37($300) and may be decreased to no less than two hundred
38twenty-five dollars ($225). A temporary license fee shall be seven
39hundred fifteen dollars ($715) and may be decreased to no less
40than five hundred fifty dollars ($550).

P30   1(3) The annual renewal fee for a nonresident wholesaler license
2or third-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(k) The fee for evaluation of continuing education courses for
6accreditation shall be set by the board at an amount not to exceed
7forty dollars ($40) per course hour.

8(l) The fee for an intern pharmacist license shall be ninety dollars
9($90) and may be increased to one hundred fifteen dollars ($115).
10The fee for transfer of intern hours or verification of licensure to
11another state shall be twenty-five dollars ($25) and may be
12increased to thirty dollars ($30).

13(m) The board may waive or refund the additional fee for the
14issuance of a license where the license is issued less than 45 days
15before the next regular renewal date.

16(n) The fee for the reissuance of any license, or renewal thereof,
17that has been lost or destroyed or reissued due to a name change
18shall be thirty-five dollars ($35) and may be increased to forty-five
19dollars ($45).

20(o) The fee for the reissuance of any license, or renewal thereof,
21that must be reissued because of a change in the information, shall
22be one hundred dollars ($100) and may be increased to one hundred
23thirty dollars ($130).

24(p) It is the intent of the Legislature that, in setting fees pursuant
25to this section, the board shall seek to maintain a reserve in the
26Pharmacy Board Contingent Fund equal to approximately one
27year’s operating expenditures.

28(q) The fee for any applicant for a nongovernmental clinic
29license shall be four hundred dollars ($400) and may be increased
30to five hundred twenty dollars ($520) for each license. The annual
31fee for renewal of the license shall be two hundred fifty dollars
32($250) and may be increased to three hundred twenty-five dollars
33($325) for each license.

34(r) The fee for the issuance of a pharmacy technician license
35shall be eighty dollars ($80) and may be increased to one hundred
36five dollars ($105). The fee for renewal of a pharmacy technician
37license shall be one hundred dollars ($100) and may be increased
38to one hundred thirty dollars ($130).

39(s) The fee for a veterinary food-animal drug retailer license
40shall be four hundred five dollars ($405) and may be increased to
P31   1four hundred twenty-five dollars ($425). The annual renewal fee
2for a veterinary food-animal drug retailer license shall be two
3hundred fifty dollars ($250) and may be increased to three hundred
4twenty-five dollars ($325).

5(t) The fee for issuance of a retired license pursuant to Section
64200.5 shall be thirty-five dollars ($35) and may be increased to
7forty-five dollars ($45).

8(u) The fee for issuance or renewal of a nongovernmental sterile
9compounding pharmacy license shall be six hundred dollars ($600)
10and may be increased to seven hundred eighty dollars ($780). The
11fee for a temporary license shall be five hundred fifty dollars ($550)
12and may be increased to seven hundred fifteen dollars ($715).

13(v) The fee for the issuance or renewal of a nonresident sterile
14compounding pharmacy license shall be seven hundred eighty
15dollars ($780). In addition to paying that application fee, the
16nonresident sterile compounding pharmacy shall deposit, when
17submitting the application, a reasonable amount, as determined by
18the board, necessary to cover the board’s estimated cost of
19performing the inspection required by Section 4127.2. If the
20required deposit is not submitted with the application, the
21application shall be deemed to be incomplete. If the actual cost of
22the inspection exceeds the amount deposited, the board shall
23provide to the applicant a written invoice for the remaining amount
24and shall not take action on the application until the full amount
25has been paid to the board. If the amount deposited exceeds the
26amount of actual and necessary costs incurred, the board shall
27remit the difference to the applicant.

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

29

SEC. 33.  

No reimbursement is required by this act pursuant
30to Section 6 of Article XIII B of the California Constitution because
31the only costs that may be incurred by a local agency or school
32district will be incurred because this act creates a new crime or
33infraction, eliminates a crime or infraction, or changes the penalty
34for a crime or infraction, within the meaning of Section 17556 of
35the Government Code, or changes the definition of a crime within
36the meaning of Section 6 of Article XIII B of the California
37Constitution.



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