Drug Distributor Licensing Requirements

PURPOSE: This rule defines terms and requirements for the lawful licensure of drug distributors. (1) A “wholesale drug distributor” is defined in section 338.330(3), RSMo. No wholesale drug distributor with physical facilities located in the state of Missouri shall knowingly purchase or receive legend drugs and/or drug related devices from a wholesale drug distributor or pharmacy not licensed or registered by the board. Knowledge of the licensure status of a drug distributor or pharmacy includes, but is not limited to, actual or constructive knowledge. Knowledge of the license status of a drug distributor or pharmacy shall also include, but not be limited to, notification from the board by mail or electronic transmission. (A) A wholesale drug distributor is further defined as anyone engaged in wholesale distribution of prescription drugs, 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; and retail pharmacies that conduct wholesale distributions. (B) Licensure and/or registration as a wholesale drug distributer is not required for activities described below— 1. The sale, purchase, transfer, or trade of a drug or an offer to sell, purchase, transfer, or trade a drug for emergency administration to an individual patient if a delay in therapy would negatively affect a patient outcome. The amount sold, purchased, transferred, or traded shall not exceed five percent (5%) of the pharmacy’s total gross prescription sales or, if prescriptions are not sold, five percent (5%) of the pharmacy’s total drug purchases; 2. The sale, purchase, or trade of blood and blood components intended for transfusion and any other exemptions as provided for in Chapter 338, RSMo; 3. The sale, purchase, transfer, or trade of a drug or an offer to sell, purchase, or trade a drug by a Missouri licensed pharmacy that does not exceed five percent (5%) of the pharmacy’s total gross sales. For purposes of this section, total gross sales shall be calculated based on the pharmacy’s total annual prescription drug sales or, if prescriptions are not sold, five percent (5%) of the pharmacy’s total drug purchases; 4. The sale, purchase, transfer, or trade of a drug or offer to sell, purchase, transfer, or trade a drug among hospitals or by a hospital to a healthcare entity under the same common control or ownership as the hospital. “Common control or ownership” means the power to direct or cause the direction of the management and policies of a person or an organization whether by ownership, stock, voting rights, contract, or otherwise. For purposes of this rule, a “hospital” shall be limited to a hospital as defined by Chapter 197, RSMo, or a hospital operated by the state; 5. The storage or distribution of drugs by a local, state, or federal facility that are received from the Strategic National Stockpile or the state stockpile for the purpose of providing those drugs in an emergency situation as authorized by a state or federal agency; 6. The sale, purchase, or transfer of a drug or vaccine received from or on behalf of a federal, state, or municipal entity for the purpose of treating or immunizing patients during a state or federally declared disaster or emergency; 7. The sale, purchase, or transfer of a drug or vaccine subject to an emergency use authorization issued by the United States Food and Drug Administration for a public health emergency; 8. The sale, purchase, transfer, or trade of a prescription drug to alleviate a temporary shortage of a prescription drug that is in limited supply or unavailable due to delays in or interruption of supply. Drugs sold, purchased, transferred, or traded pursuant to this section shall only be sold, purchased, transferred, or traded directly from an importer or manufacturer authorized by or registered with the United States Food and Drug Administration (FDA) to import or manufacture the drug that is unavailable or in short supply. In addition, sales, purchases, transfers, or trades shall be limited to the period of shortage and to the drug that is unavailable or in limited supply. Documentation of FDA authorization or registration shall be maintained in the licensee’s or recipient’s records; and 9. The sale, purchase, transfer, or trade of a drug between a Missouri licensed pharmacy and a non-resident pharmacy that is located in and licensed by another state or United States territory. The total amount of drug sold, purchased, transferred, or traded by the Missouri-licensed pharmacy pursuant to this subsection shall not exceed five percent (5%) of the pharmacy’s total annual prescription drug sales. Missouri pharmacies receiving drugs pursuant to this section from a non-resident pharmacy shall maintain the following records for two (2) years from the date of sale, purchase, transfer, or trade: A. Proof the non-resident pharmacy holds a current pharmacy license in the state or territory from which the drug is shipped or distributed; and B. An invoice record which documents the name and address of the non-resident pharmacy, the date of sale, purchase, transfer, or trade, and the name, strength, and quantity of the drug received. The pharmacies shall also comply with all applicable controlled substance requirements. (C) Wholesale drug distributors shall inform the board of their current FAX number, any change in FAX number, and/or the fact that the wholesale drug distributor does not have a working FAX. In the event a wholesale drug distributor notifies the board that the wholesale drug distributor does not have a working FAX, notification from the board will be made to the wholesale drug distributor by first class mail. For the purposes of this rule, such notification by mail shall be considered effective three (3) days after mailing and shall have the same effect as notification by FAX. (D) Failure to receive notification from the board shall not be a defense to violations of section (1) of this rule when the wholesale drug distributor has failed to comply with the requirements of subsection (1)(C) of this rule. (2) All licenses for the operation of a drug distributor shall expire on the date specified by the director of the Division of Professional Registration by appropriate rule. (3) Drug distributor licenses shall be issued on the application of the owners. If the owner is a corporation, an officer of the corporation must sign the application as the applicant. If the owner is a partnership, a partner must sign the application as the applicant. If the owner is a limited liability partnership, a general partner must sign the application as the applicant. If the owner is a limited liability company, a member must sign the application as the applicant. (4) Drug distributor license applications and renewal applications shall be completed and submitted to the Board of Pharmacy along with the appropriate fees before any license is issued or renewed. Information required on the application shall include: (A) The name, full business address, electronic facsimile transmission number (FAX), and telephone number of the licensee; (B) All trade or business names used by the licensee; (C) The address, telephone number, and the name of the manager in charge for each facility used by the licensee for the storage, handling, and distribution of prescription drugs; (D) The type of ownership or operation; (E) The name(s) of the owner, operator, or both, of the licensed entity, including: 1. If a person, the name of the person; 2. If a partnership, the name of each partner and the name of the partnership; 3. If a corporation, the name of the corporate president, vice president, secretary, treasurer, chief executive officer, board of directors, and senior vice presidents or their equivalents, the corporate name(s), and the name of the state of incorporation; and 4. If a sole proprietorship, the full name of the sole proprietor and the name of the business entity; (F) The name of the manager-in-charge who meets the requirements as set forth in 20 CSR 2220-5.030(2); a complete notarized manager-in-charge affidavit of the license application; and a history of employment/occupations and offices held during the past seven (7) years; and (G) An application for a wholesale or pharmacy drug distributor license will become null and void if the applicant fails to complete the process for licensure within six (6) months of receipt of the application by the board. (5) When a drug distributor changes ownership, the original license becomes void on the effective date of the change of ownership. Before any new business entity resulting from that change opens a facility as a drug distributor, it must obtain a new license from the board. A temporary license shall be issued once a completed application and fee have been received by the board. The effective date of the temporary license shall be the date the change of ownership is listed as effective on the application. Such license shall remain in effect until a permanent license is issued or denied by the board. (A) A change of ownership of a drug distributor facility owned by a sole proprietor is deemed to have occurred when— 1. The business is sold and the sale becomes final; 2. The proprietor enters into a partnership with another individual or business entity; or 3. The proprietor dies; provided, however, that the proprietor’s estate may continue to operate the drug distributor facility for a period of no more than one (1) year and only so long as appropriate fees are paid. (B) If a corporation owns a drug distributor facility, it is not necessary to obtain a new license if the owners of the stock change. If a limited liability partnership or a limited liability company owns a drug distributor company, it is not necessary to obtain a new license if the partners or members of the company change, as long as the partnership or company is not dissolved by that change. It is necessary to file written notice with the Board of Pharmacy within thirty (30) days after a change occurs of twenty-five percent (25%) or more in the ownership of corporation stock, or in partners in a limited liability partnership, or in members of the limited liability company. This notification must be in writing and certified. However, when a corporation, limited liability partnership, or limited liability company begins ownership of a drug distributor company or ceases ownership of a drug distributor company, a new license must be obtained regardless of the relationship between the previous and subsequent owners. (6) If an individual or business entity operating a drug distributor facility changes the location of the facility either within the existing facility (structure) or to a new facility (structure), the facility shall not open for business at the new location until the board, its duly authorized agent, or the Food and Drug Administration has inspected the premises of the new location and approved it and the facility has been in compliance with all state and federal drug laws pertaining to drug distribution. Upon this approval and receipt of a change of location fee, the board shall issue a license authorizing operation of a facility at the new location and the license shall bear the same number as the previous license. However, the license remains valid if the facility address changes, but not the location, and an amended license will be issued without charge under these circumstances. (7) Separate licenses shall be required for each drug distribution site owned or operated by a drug distributor as defined in section 338.330, RSMo. (8) The Board of Pharmacy may grant a temporary license to a wholesale or pharmacy drug distributor to allow for the conduct of business within the state until a determination by the board is made on the issuance of a permanent license. (A) Temporary licenses shall remain valid until a time the board shall find that the applicant meets or fails to meet the requirements for regular licensure or one (1) year, whichever is less. 1. The board will consider, at a minimum, the following factors in reviewing the qualifications of persons who apply or renew as a drug distributor: A. Any convictions of the applicant under any federal, state, or local laws relating to drug samples, wholesale or retail drug distribution, or distribution of controlled substances; B. The person has been finally adjudicated and found guilty, or entered a plea of guilty or nolo contendere, in a criminal prosecution under the laws of any state or of the United States, for any offense reasonably related to the qualifications, functions, or duties of any profession licensed or regulated under this chapter, for any offense an essential element of which is fraud, dishonesty, or an act of violence, or for any offense involving moral turpitude, whether or not sentence is imposed; C. The applicant’s past experience in the manufacture or distribution of prescription drugs, including controlled substances; D. The applicant furnishing false or fraudulent material in any application made in connection with drug manufacturing or distribution; E. Suspension, revocation, or probation by federal, state, or local government of any license or registration currently or previously held by the applicant for the manufacture or distribution of any drugs, including controlled substances; F. Compliance with licensing requirements under previously granted licenses, if any; and G. Requirements to maintain or make available, or both, to the board or the federal, state, or local law enforcement officials those records required under this section are followed. 2. If an applicant for a license in any way fails to provide information as requested by the board or does not cooperate with requests and inquiries made by the board or provides false or misleading information to the board and the temporary license expires or is denied, all fees paid by the applicant shall be forfeited. 3. During the period of time that a temporary license is in effect, the applicant may conduct business in this state as a drug distributor as long as all state and federal laws governing drug distribution are followed and no action that results in professional misconduct as outlined in section 338.055, RSMo is documented. 4. If it is determined by the board that a permanent license is to be denied to an applicant, a denial notification letter shall be sent to the applicant. The temporary license will be considered invalid ten (10) days after notification is sent to the applicant by certified mail. (B) A license must be posted in a conspicuous place in the facility to which it is issued. (9) Each licensed corporate wholesale distributor located outside of this state that distributes drugs in this state shall designate a registered agent in this state for service of process. Any licensed corporate wholesale distributor that does not designate a registered agent shall be deemed to have designated the secretary of state of this state to be its true and lawful attorney, upon who may be served all legal process in any action or proceeding against any licensed corporate wholesale distributor growing out of or arising from such distribution. Service of process shall be accomplished as authorized by law. AUTHORITY: sections 338.335 and 338.350, RSMo 2016, and sections 338.140.1, 338.315, 338.330, 338.333, 338.337, and 338.340, RSMo Supp. 2020.* This rule originally filed as 4 CSR 220-5.020. Original rule filed Feb. 4, 1991, effective June 10, 1991. Amended: Filed April 28, 1992, effective Feb. 26, 1993. Amended: Filed Jan. 27, 1995, effective Sept. 30, 1995. Amended: Filed March 15, 2000, effective Sept. 30, 2000. Amended: Filed Nov. 1, 2000, effective June 30, 2001. Amended: Filed April 6, 2001, effective Nov. 30, 2001. Amended: Filed June 16, 2003, effective Jan. 30, 2004. Amended: Filed June 15, 2005, effective Jan. 30, 2006. Moved to 20 CSR 2220-5.020, effective Aug. 28, 2006. Amended: Filed Aug. 21, 2006, effective April 30, 2007. Amended: Filed Oct. 27, 2014, effective May 30, 2015. Emergency amendment filed Oct. 29, 2020, effective Nov. 13, 2020, expired May 11, 2021. Amended: Filed Oct. 29, 2020, effective April 30, 2021. *Original authority: 338.140, RSMo 1939, amended 1981, 1989, 1997, 2011, 2019; 338.315, RSMo 1989, amended 2011, 2012, 2014, 2018; 338.330, RSMo 1989, amended 1993, 1998, 2011, 2018; 338.333, RSMo 1989, amended 2010, 2012, 2018; 338.335, RSMo 1998, amended 2010; 338.337, RSMo 1989, amended 2009, 2010, 2018; 338.340, RSMo 1989, amended 2018; and 338.350, RSMo 1989, amended 1993, 1995.