For the purposes of subdivision (9) of subsection (b) of §26 of the Act, a pharmacy fails to establish and maintain effective controls against diversion of prescription drugs when:

1. (1) there is inadequate security to prevent unauthorized access to prescription drugs;
2. (2) there is inadequate security to prevent the diversion of prescription drugs;
3. (3) during the time an individual's license to practice pharmacy is revoked, canceled, or suspended, the pharmacy employs or allows such individual access to prescription drugs;

4. (4) the pharmacy possesses or engages in the sale, purchase, or trade or the offer to sell, purchase, or trade prescription drug samples; provided however, this paragraph does not apply to:

   1. (A) prescription drugs provided by a manufacturer as starter prescriptions or as replacement for such manufacturer's outdated drugs;
   2. (B) prescription drugs provided by a manufacturer in replacement for such manufacturer's drugs that were dispensed pursuant to written starter prescriptions; or

   3. (C) prescription drug samples possessed by a pharmacy of a health care entity which provides health care primarily to indigent or low income patients at no or reduced cost and if:

      1. (i) the samples are possessed in compliance with the Prescription Drug Marketing Act of 1987;
      2. (ii) the pharmacy is owned by a charitable organization described in the Internal Revenue Code of 1986, or by a city, state or county government; and
      3. (iii) the samples are for dispensing or provision at no charge to patients of such health care entity;

5. (5) the pharmacy possesses or engages in the sale, purchase, or trade or the offer to sell, purchase, or trade of prescription drugs:

   1. (A) sold for export use only;
   2. (B) purchased by a public or private hospital or other health care entity; or
   3. (C) donated or supplied at a reduced price to a charitable organization described in the Internal Revenue Code of 1986, §501(c)(3), and possessed by a pharmacy other than one owned by the charitable organization;

   4. (D) provided that subparagraphs (A)-(C) of this paragraph do not apply to:

      1. (i) the purchase or other acquisition by a hospital or other health care entity which is a member of a group purchasing organization or from other hospitals or health care entities which are members of such organization;
      2. (ii) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug by an organization described in paragraph (4)(C)(ii) of this section to a nonprofit affiliate of the organization to the extent otherwise permitted by law;
      3. (iii) the sale, purchase or trade of a drug or an offer to sell, purchase, or trade a drug among hospitals or other health care entities which are under common control;
      4. (iv) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug for emergency medical reasons including the transfer of a drug between pharmacies to alleviate temporary shortages of the drug arising from delays in or interruptions of regular distribution schedules;
      5. (v) the dispensing of a prescription drug pursuant to a valid prescription drug order to the extent otherwise permitted by law; or

6. (6) the sale, purchase, or trade or the offer to sell, purchase, or trade of:

   1. (A) misbranded prescription drugs; or
   2. (B) prescription drugs beyond the manufacturer's expiration date.

Source Note:The provisions of this §281.8 adopted to be effective December 30, 1998, 23 TexReg 13073.