RULE 070.00.01-005 - 08-02-0001 thru 08-02-0008 - List I Chemicals

RULE 070.00.01-005. 08-02-0001 thru 08-02-0008 - List I Chemicals

08-02 -WHOLESALE DISTRIBUTOR OF LIST I CHEMICALS

08-02-0001 -DEFINITIONS

As used in this Regulation, unless the context otherwise requires

1. Board means the Arkansas State Board of Pharmacy;

2. Person includes individual, general or limited partnership, corporation, business firm, limited liability company, and association;

3. List I Chemical means ephedrine, pseudoephedrine, or phenylpropanolamine, or their salts, optical isomers and salts of optical isomers, alone or in a mixture.

4. Manufacturer means anyone who is engaged in manufacturing, preparing, propagating, compounding, processing, packaging, repackaging, or labeling of a List I Chemical;

5. Wholesale Distribution means the distribution of List 1 Chemicals to persons other than consumers or patients, but does not include entities exempt by Arkansas Code Annotated ยง 5-64-1006 as amended by Act 1209 of 2001.

6. Wholesale Distributor means any person engaged in wholesale distribution of List I Chemicals; including but not limited to manufacturers; repackers; own-label distributors; private label distributors; jobbers; brokers; warehouses-including manufacturers' and distributors' warehouses, chain drug warehouses, and wholesale drug warehouses; independent wholesale drug traders; List I Chemical repackagers; physicians; dentists, veterinarians; clinics; individuals; hospitals; nursing homes and their providers; and retail and hospital pharmacies that conduct wholesale distributions. A wholesale distributor shall not include any for-hire carrier or person or entity hired solely to transport List I Chemicals.

08-02-0002 -WHOLESALE DISTRIBUTOR OF LIST I CHEMICALS-PERMIT REQUIRED.

1. Every wholesale distributor who shall engage in the wholesale distribution of List I Chemicals to include without limitation, manufacturing in this state, shipping in or into this state, or selling or offering to sell in this state, if not exempt by Act 1209 of 2001, shall register annually with the Arkansas State Board of Pharmacy by application for a permit on a form furnished by the Board and accompanied by a fee as defined in Regulation 01-00-0007. The Board may require a separate permit for each facility directly or indirectly owned or operated by the same business entity or for a parent entity with divisions, subdivision, subsidiaries, and/or affiliate companies when operations are conducted at more than one location and there exists joint ownership and control among all the entities.

2. The permit shall be renewed as defined in Regulation 01-00-0007.

3. All permits issued under this section shall expire as defined in Regulation 01-00-0007.

4. A change of ownership of a wholesale distributor of List I Chemicals occurs under, but is not limited to, the following circumstances:

A. A change of ownership of a wholesale distributor of List I Chemicals owned by a SOLE PROPRIETOR, is deemed to have occurred when:

a. The business is sold and the sale becomes final or the new owner assumes control of the wholesale distributor - which ever occurs first.

b. The proprietor enters into a partnership with another individual or business entity.

B. A change of ownership of a wholesale distributor of List I Chemicals, owned by PARTNERSHIP, is deemed to have occurred when:

a. There is an addition or deletion of one or more partners in a partnership to which a List I Chemical wholesale distributor's permit has been issued.

b. The business is sold and the sale becomes final or the new owner assumes control of the wholesale distributor of List I Chemicals -which ever occurs first.

C. A change of ownership of a wholesale distributor, owned by a CORPORATION, is deemed to have occurred when:

a. An individual or business acquires or disposes of twenty percent (20%) of the corporation's outstanding shares of voting stock. (This shall not apply to any corporation the voting stock of which is actively traded on any securities exchange or in any over the counter market); or

b. The corporation merges with another business or corporation. (The corporation owning the wholesale distributor is required to notify the Arkansas State Board of Pharmacy if a change of ownership or merger occurs within the parent corporation of the corporation which owns the wholesale distributor); or

c. The corporation's charter expires or is forfeited.

d. The business is sold and the sale becomes final or the new owner assumes control of the wholesale distributor -- which ever occurs first.

D. A change of ownership of a wholesale distributor of List I Chemicals, owned by a Limited Liability Company, is deemed to have occurred when:

a. There is an addition or deletion of one or more members of the limited liability company to which a List I Chemical wholesale distributor's permit has been issued;

b. The assets of the limited liability company devoted to or utilized in the wholesale distribution of List I Chemicals are sold and the sale becomes final or new owner assumes control of the wholesale distribution of List I Chemicals;

c. There is dissolution of the limited liability company.

08-02-0003 -MIINIMUM REQUIRED INFORMATION FOR OBTAINING A PERMIT

1. The Arkansas Board of Pharmacy requires the following from each wholesale drug distributor of List I Chemicals as part of the initial registration procedure and as part of any renewal of such permit:

A. The name, full business address, and telephone number of the permit holder;

B. All trade or business names used by the permit holder;

C. Addresses, telephone numbers, and the names of contact persons for the facility used by the permit for the storage, handling, and distribution of List I Chemicals;

D. The type of ownership or operation (i.e. partnership, corporation, or sole proprietorship); and

E. The name(s) of the owner and/or operator of the permit holder, including:

a. If a person, the name of the person;

b. If a partnership, the name of each partner, and the name of the partnership;

c. If a corporation, the name and title of each corporate officer and director, the corporate names, and the name of the State of incorporation, and the name of the parent company, if any;

d. If a sole proprietorship, the full name of the sole proprietor and the name of the business entity.

e. If a limited liability company, the name and state of organization of the LLC, the name of each member and manager of the LLC.

2. Where operations are conducted at more than one location, by a single wholesale distributor of List I Chemicals, each such location shall obtain a permit issued by the Arkansas State Board of Pharmacy.

3. Changes in any information on the application for licensure shall be submitted to the Arkansas State Board of Pharmacy within 30 days after such a change.

08-02-0004 -MINIMUM QUALIFICATIONS

1. The Arkansas State Board of Pharmacy will consider the following factors in determining eligibility for obtaining a permit as a Wholesale Distributor of List I Chemicals.

A. Any convictions of the applicant under any Federal, State, or local laws or regulations pertaining to wholesale or retail drug distribution of List I Chemicals, distribution of controlled substances, or distribution of prescription drugs;

B. Any felony convictions of the applicant under Federal, State, or local laws;

C. The applicant's past experience in the manufacture or distribution of List I Chemicals, prescription drugs, or controlled substances;

D. The furnishing, by the applicant, of false or fraudulent material in any application made in connection with manufacturing or distribution of List I Chemicals, prescription drugs, or controlled substances;

E. Suspension or revocation by Federal, State, or local government of any permit currently or previously held by the applicant for the manufacture or distribution of any drugs or List I Chemicals, prescription drugs, or controlled substances;

F. Compliance with registration requirements under previously granted permits, if any;

G. Compliance with the requirements to maintain and/or make available to the State Board of Pharmacy or to Federal, State, or local law enforcement officials those records required to be maintained by wholesale drug distributors of List I Chemicals;

H. Any other factors or qualifications the Arkansas Board of Pharmacy considers relevant to and consistent with the public health and safety.

2. The Arkansas Board of Pharmacy reserves the right to deny a permit to an applicant if it determines that the granting of such a permit would not be in the public interest.

08-02-0005 -PERSONNEL

The wholesale distributor of List I Chemicals that is issued a permit by the Board of Pharmacy shall employ adequate personnel with the education and experience necessary to safely and lawfully engage in the wholesale distribution of List I Chemicals.

08-02-0006 -MINIMUM REQUIREMENTS FOR THE STORAGE AND HANDLING OF LIST I CHEMICALS

The following are required for the storage and handling of List Chemicals, by wholesale drug distributors and their officers, agents, representatives, and employees.

1. Facilities. All facilities at which List I Chemicals are stored, warehoused, handled, held, offered, marketed or displayed shall:

A. Be of suitable size and construction to facilitate cleaning, maintenance, and proper operation;

B. Have storage areas designed to provide adequate lighting, ventilation, temperature, sanitation, humidity, space, equipment, and security conditions;

C. Have a designated and clearly identified area for storage of List I Chemicals that are outdated, damaged, deteriorated, misbranded, or adulterated, or that are in immediate or sealed secondary containers that have been opened;

D. Be maintained in a clean and orderly condition; and

E. Be free from infestation by insects, rodents, birds, or vermin of any kind.

2. Security.

A. All facilities used for wholesale drug distribution shall be secure from unauthorized entry.

a. Access from outside the premises shall be kept to a minimum and well controlled.

b. The outside perimeter of the premises shall be well-lighted.

c. Entry into areas where List I Chemicals are held shall be limited to authorized personnel.

B. All facilities shall be equipped with an alarm system to detect entry after hours.

C. All facilities shall be equipped with a security system that will provide suitable protection against theft and diversion. When appropriate, the security system shall provide protection against theft or diversion that is facilitated or hidden by tampering with computers or electronic records.

3. Storage. All List I Chemicals shall be stored at appropriate temperatures and under appropriate conditions in accordance with requirements, if any in the labeling of such List I Chemicals with requirement in the current edition of an official compendium.

a. If no storage requirements are established for the List I Chemicals, the chemicals may be held at "controlled" temperature, as defined in an official compendium, to help ensure that its identity, strength, quality, and purity are not adversely affected.

b. Appropriate manual, electromechanical, or electronic temperature and humidity recording equipment, devices, and/or logs shall be utilized to document proper storage of List I Chemicals.

4. Examination of materials.

a. Upon receipt, each outside shipping container shall be visually examined for identity and to prevent the acceptance of contaminated List I Chemicals that are otherwise unfit for distribution. This examination shall be adequate to reveal container damage that would suggest possible contamination or other damage to the contents.

b. Each outgoing shipment shall be carefully inspected for identity of the List I Chemical products and to ensure that there is no delivery of List I Chemicals that have been damaged in storage or held under improper conditions.

5. Returned, Damaged, and Outdated List I Chemicals.

a. List I Chemicals that are outdated, damaged, deteriorated, misbranded, or adulterated shall be quarantined and physically separated from other List I Chemicals until they are destroyed or returned to their supplier.

b. Any List I Chemical whose immediate or sealed outer or sealed secondary containers have been opened or used shall be identified as such, and shall be quarantined and physically separated from other List I Chemicals until they are either destroyed or returned to the supplier.

c. If the conditions under which a List I Chemical has been returned cast doubt on the product's safety, identity, strength, quality, or purity, then the product shall be destroyed, or returned to the supplier, unless examination, testing or other investigation proves that the product meets appropriate standards of safety, identity, strength, quality, and purity. In determining whether the conditions under which a List I Chemical has been returned cast doubt on the product's safety, identity, strength, quality, or purity, the wholesale distributor of List I Chemicals shall consider, among other things, the conditions under which the List I Chemical has been held, stored, or shipped before or during its return and the condition of the product and its container, carton, or labeling, as a result of storage or shipping.

08-02-0007 -INSPECTION OF PREMISES AND RECORDS.

The Board may conduct inspections upon all premises, including delivery vehicles, purporting or appearing to be used by a person maintaining a permit under this regulation. The Board, in its discretion, may accept a satisfactory inspection by a state agency of another state which the Board determines to be comparable to that made by the Arkansas State Board of Pharmacy.

08-02-0008 -SUSPICIOUS ORDERS FOR LIST 1 CHEMICALS

Wholesale Distributors of List 1 Chemicals should use their best judgment in identifying suspicious orders. The wholesalers should use the following criteria in order to identify suspicious orders:

ALL LEVELS/ALL CHEMICALS

1. New customer or unfamiliar representative or established customer who begins ordering List 1 Chemicals.

2. Customers who don't seem to know industry practice or who fail to provide reasons for an order at variance with accepted legitimate industry practice.

3. Customer whose communications are not prepared or conducted in a professional business manner.

4. Customer who provides evasive responses to any questions or is unable to supply information as to whether chemicals are for domestic use or for export.

5. Customer who has difficulty pronouncing chemical names.

6. New customers who don't seem to know Federal or state government regulations.

7. Customer whose stated use of List 1 Chemicals is incompatible with destination country's commercial activities or consignee's line of business.

8. Customers who want predominantly or only regulated chemicals.

9. Customers who want multiple regulated or surveillance list products, particularly if in contrast to customary use and practice.

10. Customer who is vague or resists providing information about the firm's address, telephone number, and reason for seeking that chemical.

11. Customer who provides false or suspicious addresses, telephone numbers, or references.

12. Customer who is vague or will not furnish references for credit purposes.

13. Customer who refuses or is reluctant to establish a credit account or provide purchase order information.

14. Customer who prefers to pay by cashiers check, postal money order, etc.

15. Customer who desires to pay cash.

16. Customer who wants to pick up the chemicals outside of normal practice in the suppliers experience.

17. Customer with little or no business background available.

18. An established customer who deviates from previous orders or ordering methods.

19. Customers who want airfreight or express delivery.

20. Customers who want chemicals shipped to post office boxes or an address other than their usual business address, (i.e. residence address)

21. Customer using a freight forwarder as ultimate consignee.

22. Customer who requests unusual methods of delivery or routes of shipment.

23. Customer who provides unusual shipping, labeling, or packaging instructions.

24. Customer who requests the use of intermediate consignees whose location or business is incompatible with the purported end users nature of business or location.

25. Above threshold hydrochloride Gas or Iodine sales to a non-commercial customer.

DISTRIBUTOR (Non-Retail) REGULATED OTC PRODUCTS

1. Customers who don't want to tell you what area they will resell into.

2. Customers who don't want to tell you in what volumes they will resell.

3. Customers who refuse to tell you who their customers are.

4. Customers who don't have limits on resales.

5. Customers who push to buy more than your sales limit.

6. customers who repeatedly buy your sales limit at the shortest interval you set.

7. Customers who don't know what his customers limits are on individual resales.

8. Customers who resell to non-traditional outlets for regulated OTC products, (i.e. hair salons, head shops, drug paraphernalia stores, liquor, stores, record stores, video shops.)

9. Customers who resell large volumes into "independent convenience" store: market.

10. Any customer who asks for large bottle sizes, 60 count or higher.

11. Customers who buy only the largest size available.

12. Customers that don't sell other pharmaceutical products or appear to sell those other products in token amounts.

13. Any customer that resells multiple cases that flow through to individual retail outlets.

14. New customers who want to sell regulated OTC products into California, Arizona, Nevada, Oregon, Utah, Washington, New Mexico, Texas, Kansas, Missouri, or Arkansas.

15. Any customer who wants to sell to an outlet relocated from California, Missouri, or Kansas to any of the states identified in the prior sentence.

16. Any customer who wants to export, particularly to Mexico, Canada, or Southeast Asia.

17. Customers who will not provide you with evidence of registration with DEA. (Or having applied by the following deadlines: Nov. 13, 1995 for single entity ephedrine; pseudoephedrine, and phenylpropanolamine products.)

18. Customers who will not provide you with evidence of applicable state registrations/licenses.

19. Customers who sell mal order and who don't report sales to DEA monthly. (Note they must also be registered.)

20. Nominal retail customers who sell above the Federal, "Retial," 24 GM individual sale limits.

WHOLESALE DRUG DISTRIBUTION INDICATORS

1. Individual pharmacies that intend to export.

2. Individual pharmacies or chains that won't set a voluntary limit for individual sales at some fraction of the Federal limit to qualify as retail outlet.

3. Pharmacies that stock large self volumes in stores that have repeated thefts or other sales problems.

NOTICE

On Thursday, June 21, 2000, at 10:00 a.m., the Arkansas State Board of Pharmacy will hold a public hearing at Arlington Hotel, Central Avenue at Fountain Street, Hot Springs, Arkansas. The Board will consider the adoption of the following:

01-00-0007 -Fees Charged by the Board of Pharmacy

This is an amendment to an existing regulation. The amendments address changes that were made to the Arkansas Code during the Legislative Session. The changes allow the Board of Pharmacy to go to Biennial Licensure beginning with the renewals for 2002. The regulation also eliminates the fee for Disease State Management and adds fees for the processing of permits for Wholesale Distributors of List I Chemicals.

04-00-0002 -Time Requirements for Pharmacist on Duty and 04-02-0005 -Pharmacist in Charge.

These are amendments to the two regulations that address the length of time that an owner has to hire a pharmacist in charge of a pharmacy when the pharmacist in charge resigns and is no longer working at the pharmacy. Regulation 04-00-0002 gives the Executive Director the power to make exceptions to the rule that requires a pharmacist in charge to be present at least 40 hours per week, if the Executive Director believes that the health and Welfare of the public might be in peril because of a community's limited access to pharmaceutical service if a pharmacy were forced to close. Regulation 04-02-0005 makes reference to 04-00-0002 in section D with regard to the pharmacist in charge.

07-00-0006 -Generic Substitution

During the 2001 Legislative Session, the Legislature eliminated the requirement that the Board of Pharmacy maintain a Non-Equivalent Drug Product List and said that the Board could make the determination as to which drugs are generically equivalent. It gave them authority to use a nationally recognized reference source that met the requirement of the Act. This regulation deletes the old Non Equivalent Drug Product List and replaces it with the regulation on Generic Substitution. The proposed regulation recognizes the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (The Orange Book) as the basis for the determination of generic equivalency within the limitations stipulated in the publication.

08-02 -Wholesale Distributor of List I Chemicals

Act 1209 of 2001 requires that the Board of Pharmacy issue permits to Wholesale Distributors of List I Chemicals (Ephedrine, pseudoephedrine, or phenylpropanolamine, or their salts, optical isomers and salts of optical isomers, alone or in a mixture). The Act also required the Board of Pharmacy to issue criteria for identifying suspicious orders for these chemicals. This proposed regulation lists applicable definitions, stipulates that a permit is required, outlines change of ownership requirements, outlines the minimum qualifications for a permit, requires the permit holders to have adequate personnel, identifies the minimum requirements for the storage and handling of List I Chemicals, gives the Board the authority to conduct inspections, and identifies the criteria for recognizing Suspicious Orders for List I Chemicals.

A copy of the proposed regulations can be obtained by calling (501) 682-0190, writing Arkansas State Board of Pharmacy, 101 East Capitol, Suite 218, Little Rock, AR 72201, or by e-mailing the Board of Pharmacy at sheila.castin(5),mail.state.ar.us. The regulations will also be posted on the Board of Pharmacy web site at www.state.ar.us/asbp.

(7/16/2001)

The following state regulations pages link to this page.