1. (1) As used in this section, the term:

   1. (a) "Wholesale distribution" means distribution of prescription drugs to persons other than a consumer or patient, but does not include:

      1. (I) The agency or entity must obtain written authorization for the sale, purchase, trade, or other transfer of a prescription drug under this sub-subparagraph from the Secretary of Health or his or her designee.
      2. (II) The contract provider or subcontractor must be authorized by law to administer or dispense prescription drugs.
      3. (III) In the case of a subcontractor, the agency or entity must be a party to and execute the subcontract.
      4. (IV) A contract provider or subcontractor must maintain separate and apart from other prescription drug inventory any prescription drugs of the agency or entity in its possession.
      5. (V) The contract provider and subcontractor must maintain and produce immediately for inspection all records of movement or transfer of all the prescription drugs belonging to the agency or entity, including, but not limited to, the records of receipt and disposition of prescription drugs. Each contractor and subcontractor dispensing or administering these drugs must maintain and produce records documenting the dispensing or administration. Records that are required to be maintained include, but are not limited to, a perpetual inventory itemizing drugs received and drugs dispensed by prescription number or administered by patient identifier, which must be submitted to the agency or entity quarterly.
      6. (VI) The contract provider or subcontractor may administer or dispense the prescription drugs only to the eligible patients of the agency or entity or must return the prescription drugs for or to the agency or entity. The contract provider or subcontractor must require proof from each person seeking to fill a prescription or obtain treatment that the person is an eligible patient of the agency or entity and must, at a minimum, maintain a copy of this proof as part of the records of the contractor or subcontractor required under sub-sub-subparagraph (V).
      7. (VII) The prescription drugs transferred pursuant to this sub-subparagraph may not be billed to Medicaid.

      8. (VIII) In addition to the departmental inspection authority set forth in s. 499.051, the establishment of the contract provider and subcontractor and all records pertaining to prescription drugs subject to this sub-subparagraph shall be subject to inspection by the agency or entity. All records relating to prescription drugs of a manufacturer under this sub-subparagraph shall be subject to audit by the manufacturer of those drugs, without identifying individual patient information.

         2. Any of the following activities, which is not a violation of s. 499.005(21) if such activity is conducted in accordance with rules established by the department:

         a. The sale, purchase, or trade of a prescription drug among federal, state, or local government health care entities that are under common control and are authorized to purchase such prescription drug.

         b. The sale, purchase, or trade of a prescription drug or an offer to sell, purchase, or trade a prescription drug for emergency medical reasons. For purposes of this sub-subparagraph, the term "emergency medical reasons" includes transfers of prescription drugs by a retail pharmacy to another retail pharmacy to alleviate a temporary shortage.

         c. The transfer of a prescription drug acquired by a medical director on behalf of a licensed emergency medical services provider to that emergency medical services provider and its transport vehicles for use in accordance with the provider's license under chapter 401.

         d. The revocation of a sale or the return of a prescription drug to the person's prescription drug wholesale supplier.

         e. The donation of a prescription drug by a health care entity to a charitable organization that has been granted an exemption under s. 501(c)(3) of the Internal Revenue Code of 1986, as amended, and that is authorized to possess prescription drugs.

         f. The transfer of a prescription drug by a person authorized to purchase or receive prescription drugs to a person licensed or permitted to handle reverse distributions or destruction under the laws of the jurisdiction in which the person handling the reverse distribution or destruction receives the drug.

         3. The distribution of prescription drug samples by manufacturers' representatives or distributors' representatives conducted in accordance with s. 499.028.

         4. The sale, purchase, or trade of blood and blood components intended for transfusion. As used in this subparagraph, the term "blood" means whole blood collected from a single donor and processed either for transfusion or further manufacturing, and the term "blood components" means that part of the blood separated by physical or mechanical means.

         5. The lawful dispensing of a prescription drug in accordance with chapter 465.

      1. Any of the following activities, which is not a violation of s. 499.005(21) if such activity is conducted in accordance with s. 499.014:

      a. The purchase or other acquisition by a hospital or other health care entity that is a member of a group purchasing organization of a prescription drug for its own use from the group purchasing organization or from other hospitals or health care entities that are members of that organization.

      b. The sale, purchase, or trade of a prescription drug or an offer to sell, purchase, or trade a prescription drug by a charitable organization described in s. 501(c)(3) of the Internal Revenue Code of 1986, as amended and revised, to a nonprofit affiliate of the organization to the extent otherwise permitted by law.

      c. The sale, purchase, or trade of a prescription drug or an offer to sell, purchase, or trade a prescription drug among hospitals or other health care entities that are under common control. For purposes of this section, "common control" means the power to direct or cause the direction of the management and policies of a person or an organization, whether by ownership of stock, by voting rights, by contract, or otherwise.

      d. The sale, purchase, trade, or other transfer of a prescription drug from or for any federal, state, or local government agency or any entity eligible to purchase prescription drugs at public health services prices pursuant to Pub. L. No. 102-585, s. 602 to a contract provider or its subcontractor for eligible patients of the agency or entity under the following conditions:

   2. (b) "Wholesale distributor" means any person engaged in wholesale distribution of prescription drugs in or into this state, including, but not limited to, manufacturers; repackers; own-label distributors; jobbers; private-label distributors; brokers; warehouses, including manufacturers' and distributors' warehouses, chain drug warehouses, and wholesale drug warehouses; independent wholesale drug traders; exporters; retail pharmacies; and the agents thereof that conduct wholesale distributions.
   3. (c) "Retail pharmacy" means a community pharmacy licensed under chapter 465 that purchases prescription drugs at fair market prices and provides prescription services to the public.

2. (2) The following types of wholesaler permits are established:

   1. (a) A prescription drug wholesaler's permit. A prescription drug wholesaler is a wholesale distributor that may engage in the wholesale distribution of prescription drugs. A prescription drug wholesaler that applies to the department after January 1, 1993, must submit a bond of $200, payable to the Florida Drug, Device, and Cosmetic Trust Fund. This bond will be refunded to the permittee when the permit is returned to the department and the permittee ceases to function as a business. A permittee that fails to notify the department before changing the address of the business, fails to notify the department before closing the business, or fails to notify the department before a change of ownership forfeits its bond. The department may adopt rules for issuing a prescription drug wholesaler-broker permit to a person who engages in the wholesale distribution of prescription drugs and does not take physical possession of any prescription drugs.
   2. (b) A compressed medical gas wholesaler's permit. A compressed medical gas wholesaler is a wholesale distributor that is limited to the wholesale distribution of compressed medical gases to other than the consumer or patient. The compressed medical gas must be in the original sealed container that was purchased by that wholesaler. A compressed medical gas wholesaler may not possess or engage in the wholesale distribution of any prescription drug other than compressed medical gases. The department shall adopt rules that govern the wholesale distribution of prescription medical oxygen for emergency use. With respect to the emergency use of prescription medical oxygen, those rules may not be inconsistent with rules and regulations of federal agencies unless the Legislature specifically directs otherwise.

   3. (c) An out-of-state prescription drug wholesaler's permit. An out-of-state prescription drug wholesaler is a wholesale distributor located outside this state which engages in the wholesale distribution of prescription drugs into this state and which must be permitted by the department and comply with all the provisions required of a wholesale distributor under ss. 499.001-499.081.

      1. The out-of-state drug wholesaler must maintain at all times a license or permit to engage in the wholesale distribution of prescription drugs in compliance with laws of the state in which it is a resident.

      2. An out-of-state prescription drug wholesaler's permit is not required for an intracompany sale or transfer of a prescription drug from an out-of-state establishment that is duly licensed as a prescription drug wholesaler, in its state of residence, to a licensed prescription drug wholesaler in this state, if both wholesalers are under common control. The recordkeeping requirements of s. 499.0121(6) must be followed for this transaction.

      3. The department may adopt rules that allow out-of-state drug wholesalers to obtain a drug wholesale permit on the basis of reciprocity to the extent that an out-of-state drug wholesaler:

      a. Possesses a valid permit granted by another state that has requirements comparable to those that a drug wholesaler in this state must meet as prerequisites to obtaining a permit under the laws of this state.

      b. Can show that the other state from which the wholesaler holds a permit would extend reciprocal treatment under its own laws to a drug wholesaler of this state.

   4. (d) A retail pharmacy wholesaler's permit. A retail pharmacy wholesaler is a retail pharmacy engaged in wholesale distribution of prescription drugs within this state under the following conditions:

      1. The pharmacy must obtain a retail pharmacy wholesaler's permit pursuant to ss. 499.001-499.081 and the rules adopted under those sections.

      2. The wholesale distribution activity does not exceed 30 percent of the total annual purchases of prescription drugs. If the wholesale distribution activity exceeds the 30-percent maximum, the pharmacy must obtain a prescription drug wholesaler's permit.

      3. The transfer of prescription drugs that appear in any schedule contained in chapter 893 is subject to chapter 893 and the federal Comprehensive Drug Abuse Prevention and Control Act of 1970.

      4. The transfer is between a retail pharmacy and another retail pharmacy or a health care practitioner licensed in this state and authorized by law to dispense or prescribe prescription drugs.

      5. All records of sales of prescription drugs subject to this section must be maintained separate and distinct from other records and comply with the recordkeeping requirements of ss. 499.001-499.081.

3. (3) A person that engages in wholesale distribution of prescription drugs in this state must have a wholesale distributor's permit issued by the department, except as noted in this section. Each establishment must be separately permitted except as noted in this subsection.

   1. (a) A separate establishment permit is not required when a permitted prescription drug wholesaler consigns a prescription drug to a pharmacy that is permitted under chapter 465 and located in this state, provided that:

      1. The consignor wholesaler notifies the department in writing of the contract to consign prescription drugs to a pharmacy along with the identity and location of each consignee pharmacy;

      2. The pharmacy maintains its permit under chapter 465;

      3. The consignor wholesaler, which has no legal authority to dispense prescription drugs, complies with all wholesale distribution requirements of s. 499.0121 with respect to the consigned drugs and maintains records documenting the transfer of title or other completion of the wholesale distribution of the consigned prescription drugs;

      4. The distribution of the prescription drug is otherwise lawful under this chapter and other applicable law;

      5. Open packages containing prescription drugs within a pharmacy are the responsibility of the pharmacy, regardless of how the drugs are titled; and

      6. The pharmacy dispenses the consigned prescription drug in accordance with the limitations of its permit under chapter 465 or returns the consigned prescription drug to the consignor wholesaler. In addition, a person who holds title to prescription drugs may transfer the drugs to a person permitted or licensed to handle the reverse distribution or destruction of drugs. Any other distribution by and means of the consigned prescription drug by any person, not limited to the consignor wholesaler or consignee pharmacy, to any other person is prohibited.

   2. (b) A wholesale distributor's permit is not required for the one-time transfer of title of a pharmacy's lawfully acquired prescription drug inventory by a pharmacy with a valid permit issued under chapter 465 to a consignor prescription drug wholesaler, permitted under this chapter, in accordance with a written consignment agreement between the pharmacy and that wholesaler if: the permitted pharmacy and the permitted prescription drug wholesaler comply with all of the provisions of paragraph (a) and the prescription drugs continue to be within the permitted pharmacy's inventory for dispensing in accordance with the limitations of the pharmacy permit under chapter 465. A consignor drug wholesaler may not use the pharmacy as a wholesale distributor through which it distributes the legend drugs to other pharmacies. Nothing in this section is intended to prevent a wholesale drug distributor from obtaining this inventory in the event of nonpayment by the pharmacy.
   3. (c) The department shall require information from each wholesale distributor as part of the permit and renewal of such permit, as required under s. 499.01.
4. (4) Personnel employed in wholesale distribution must have appropriate education and experience to enable them to perform their duties in compliance with state permitting requirements.
5. (5) The department may adopt rules governing the recordkeeping, storage, and handling with respect to each of the distributions of prescription drugs specified in subparagraphs (1)(a)1.-4.

History.--s. 15, ch. 92-69; s. 187, ch. 97-264; s. 31, ch. 98-151; s. 172, ch. 99-397.