1. (a) License fee.

   1. (1) All wholesale distributors of drugs who are not manufacturers of drugs in Texas shall obtain a license annually with the Texas Department of Health (department). Except as provided for in paragraph (2) of this subsection, wholesale distributors of drugs who are not manufacturers of drugs in Texas shall pay a non-refundable licensing fee for each place of business operated as follows:

      1. (A) $250 per distributor engaged in distribution only of compressed medical gases (no transfilling operations) having gross annual drug sales of $0 - $20,000;
      2. (B) $400 per wholesale distributor having gross annual drug sales of $0 - $199,999.99;
      3. (C) $650 per wholesale distributor having gross annual drug sales of $200,000 - $19,999,999.99;
      4. (D) $850 per wholesale distributor having gross annual drug sales greater than or equal to $20 million; and
      5. (E) $0.00 per wholesale distributor engaged in the distribution of an over-the-counter drug by a charitable organization, as described in the Internal Revenue Code of 1986, §501(c)(3), to a nonprofit affiliate of the organization to the extent otherwise permitted by law.

   2. (2) A wholesale distributor of drugs who is not a manufacturer of drugs, who is required to be licensed under this section and who is also required to be licensed as a device distributor under §229.439(a)(1) of this title (relating to Licensure Fees) or as a food wholesaler under §229.182(a)(3) of this title (relating to Licensing Fee and Procedures) shall pay a combined non-refundable licensing fee for each place of business. The licensing fee shall be based on the combined gross annual sales of these regulated products (foods, drugs, and/or devices) as follows:

      1. (A) $200 for each place of business having combined gross annual sales of $0 - $199,999.99;
      2. (B) $300 for each place of business having combined gross annual sales of $200,000 - $499,999.99;
      3. (C) $400 for each place of business having combined gross annual sales of $500,000 - $999,999.99;
      4. (D) $500 for each place of business having combined gross annual sales of $1 million - $9,999,999.99; and
      5. (E) $750 for each place of business having combined gross annual sales greater than or equal to $10 million.

   3. (3) All wholesale distributors of drugs who are manufacturers of drugs in Texas shall obtain a license annually with the department and shall pay a non-refundable licensing fee for each place of business operated as follows:

      1. (A) $400 per wholesale distributor having gross annual drug sales of $0 - $199,999.99 (includes a compressed and/or liquid medical gas transfiller);
      2. (B) $650 per wholesale distributor having gross annual drug sales of $200,000 - $19,999,999.99; and
      3. (C) $850 per wholesale distributor having gross annual drug sales greater than or equal to $20 million.

   4. (4) All out-of-state wholesale distributors of drugs who distribute drugs into the State of Texas must pay an annual non-refundable license fee as follows:

      1. (A) $750 per out-of-state wholesale drug distributor; or
      2. (B) $500 per out-of-state wholesale drug distributor with gross annual sales of $20 million or less, provided an outside audited statement demonstrating gross annual sales are less than $20 million is provided to the department.
   5. (5) If the United States Food and Drug Administration (FDA) determines, with respect to a product that is a combination of a drug and a device, that the primary mode of action of the product is as a drug, a person who engages in wholesale distribution of the product is subject to licensing as described in this section.
   6. (6) For the purpose of collecting licensing fees under this section, a person that distributes both its own manufactured drugs and drugs it does not manufacture must obtain only a wholesale distributor of drugs (manufacturing) license. However, when calculating the amount of the licensing fee, the manufacturer must include the total for all drugs manufactured and distributed from the place of business. In addition, drug warehousing locations operated by a drug distributor, including locations from which drugs are held for limited periods of time for distribution, and which are totally separate from any manufacturing location, must be individually licensed as drug distributors.
   7. (7) A firm that has more than one business location may request a one-time prorating of fees when applying for a license for each new location. Upon approval by the department, the expiration date of the license for the new location will be the same as the expiration date of the firm's other licensed locations.
2. (b) License forms. Licensing forms may be obtained from the Texas Department of Health, Drugs and Medical Devices Division, 1100 West 49th Street, Austin, Texas 78756.

3. (c) License statement. The wholesale distributors' licensing statement shall be signed and verified by the owner, partner, president, or corporate designee, shall be made on the department furnished license form, and shall contain the following information:

   1. (1) the legal name under which the business is conducted;
   2. (2) the address of each place of business that is licensed;
   3. (3) if a proprietorship, the name and residence address of the proprietor; if a partnership, the names and residence addresses of all partners; if a corporation, the date and place of incorporation and name and address of its registered agent in the state; or if any other type of association, then the names of the principals of such association;
   4. (4) the names and residence addresses and valid driver's license of those individuals in an actual administrative capacity which, in the case of proprietorship, shall be the managing proprietor; partnership, the managing partner; corporation, the officers and directors; or those in a managerial capacity in any other type of association;
   5. (5) for each place of business, the residence addresses of the individuals in charge thereof; and
   6. (6) a list of categories which must be marked and adhered to in the determination and paying of the fee.
4. (d) Two or more places of business. If the wholesale distributor operates more than one place of business, the wholesale distributor shall license each place of business separately.
5. (e) Pre-licensing inspection. The applicant shall cooperate with any pre-licensing inspection by the department of the wholesale distributor's facilities. The department may accept reports from authorities in other jurisdictions to determine the extent of compliance with the minimum standards in this chapter for applicants located out-of-state.

6. (f) Issuance of license. The department may license a wholesale distributor of drugs who meets the requirements of this section and §229.253 of this title (relating to Minimum Standards for Licensing).

   1. (1) The initial license shall be valid for one year from the start date of the regulated business activity which becomes the anniversary date.
   2. (2) The renewal license shall be valid for one year from the anniversary date.

7. (g) Renewal of license.

   1. (1) Each year, the wholesale distributor of drugs shall renew its license following the requirements of this section and §229.253 of this title.
   2. (2) A person who holds a license issued by the department under the Health and Safety Code shall renew the license by filing an application for renewal on a form prescribed by the department, accompanied by the appropriate licensure fee. A licensee must file for renewal before the expiration date of the current license. A person who files a renewal application after the expiration date must pay an additional $100 as a delinquency fee.

   3. (3) Failure to submit the renewal annually may subject the wholesale distributor of drugs to the enforcement provisions under Health and Safety Code, Chapter 431, and to the provisions of §229.254 of this title (relating to Refusal, Revocation, or Suspension of License).

      1. (A) Amendment of license. A license that is amended, including a change of name, ownership, or a notification of a change in the location of a licensed place of business required under the Health and Safety Code, §431.206, will require submission of fees as outlined in subsection (a) of this section.
      2. (B) Notification of change of location of place of business. Not fewer than 30 days in advance of the change, the licensee shall notify the commissioner of health (commissioner) or the commissioner's designee in writing of the licensee's intent to change the location of a licensed place of business. The notice shall include the address of the new location, and the name and residence address of the individual in charge of the business at the new location. Not more than 10 days after the completion of the change of location, the licensee shall notify the commissioner or the commissioner's designee in writing to verify the change of location, the address of the new location, and the name and residence address of the individual in charge of the business at the new address. Notice will be deemed adequate if the licensee provides the intent and verification notices to the commissioner or the commissioner's designee by certified mail, return receipt requested, mailed to the Texas Department of Health, 1100 West 49th Street, Austin.

8. (h) Exemption from licensing. Persons who engage in wholesale distribution of prescription drugs for use in humans are exempt from the licensing requirements of this subchapter, to the extent that it does not violate provisions of the Texas Dangerous Drug Act or the Texas Controlled Substances Act, the Health and Safety Code. The exemptions are:

   1. (1) intracompany sales;
   2. (2) the purchase or acquisition by a hospital or other health care entity that is a member of a group purchasing organization of a drug for its own use from the group purchasing organization or from other hospitals or health care entities that are members of such organizations;
   3. (3) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug by a charitable organization, as described in the Internal Revenue Code of 1986, §501(c)(3), to a nonprofit affiliate of the organization to the extent otherwise permitted by law;
   4. (4) 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 that are under common control. For the purpose of this subsection, "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, voting rights, contract, or otherwise;
   5. (5) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug for emergency medical reasons. For purposes of this section, "emergency medical reasons" includes transfers of prescription drugs by a retail pharmacy to another retail pharmacy to alleviate a temporary shortage;
   6. (6) the sale, purchase, or trade of a drug, an offer to sell, purchase, or trade a drug, or the dispensing of a drug pursuant to a prescription;
   7. (7) the distribution of drug samples by manufacturers' representatives or distributors' representatives; or
   8. (8) the sale, purchase, or trade of blood and blood components intended for transfusion.
9. (i) Sale of food, drugs, or devices. The provisions of this section regarding the sale of food, drugs, or devices shall be considered to include the manufacture, production, processing, packaging, exposure, offer, possession, and holding of any such article for sale; and the sale, dispensing, and giving of any such article, and the supplying or applying of any such articles in the conduct of any food, drug or device place of business.

Source Note:The provisions of this §229.252 adopted to be effective January 31, 1986, 11 TexReg 289; amended to be effective May 8, 1992, 17 TexReg 2997; amended to be effective February 15, 1993, 18 TexReg 661; amended to be effective July 20, 1993, 18 TexReg 4395; amended to be effective January 4, 1995, 19 TexReg 10234; amended to be effective March 12, 1997, 22 TexReg 2435; amended to be effective March 19, 2000, 25 TexReg 2071; amended to be effective July 7, 2002, 27 TexReg 5792.