1. (a) General. A person who engages in the wholesale distribution of prescription drugs in this state for use in humans is exempt from these sections if the person is exempt under:

   1. (1) the Prescription Drug Marketing Act of 1987 (Act), (21 U.S.C., §353(c)(3)(B));
   2. (2) the regulations adopted by the secretary to administer and enforce that Act;
   3. (3) the interpretations of that Act set forth in the compliance policy manual of the United States Food and Drug Administration; or
   4. (4) the Occupations Code, §562.154.

2. (b) Exemptions from licensing. Persons who engage in the following types of distribution of prescription drugs for use in humans are exempt from the licensing requirements of these sections, to the extent that it does not violate provisions of the Texas Controlled Substances Act, Health and Safety Code, Chapter 481, or the Texas Dangerous Drug Act, Health and Safety Code, Chapter 483:

   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.
3. (c) Applicability of other requirements. An exemption from the licensing requirements granted in subsection (b) of this section does not constitute an exemption from other applicable requirements for prescription drugs under these sections or under the Texas Food, Drug, and Cosmetic Act, Health and Safety Code, Chapter 431.
4. (d) Exemption from certain requirements for certain wholesale distributors. A wholesale distributor that distributes only prescription drugs that are medical gases is exempt from the requirements in §229.424(d) of this title (relating to Licensure Requirements), §229.425(c) and (d) of this title (relating to Licensing Procedures).

Source Note:The provisions of this §229.423 adopted to be effective February 1, 2007, 32 TexReg 315.