Senate Bill sb0874c2
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Florida Senate - 2005 CS for CS for SB 874
By the Committees on Health and Human Services Appropriations;
Health Care; and Senator Peaden
603-2224-05
1 A bill to be entitled
2 An act relating to the sale and distribution of
3 prescription drugs; amending s. 499.003, F.S.;
4 redefining the term "pedigree paper"; amending
5 s. 499.012, F.S.; providing an exemption from
6 wholesale distribution for the transfer of
7 prescription drugs due to a change in the
8 ownership of a pharmacy; amending s. 499.0121,
9 F.S.; abrogating the expiration of
10 recordkeeping provisions for pedigree papers
11 which relate to chain drug entities that are
12 part of an affiliated group; prohibiting the
13 Agency for Health Care Administration from
14 reviewing or using certain violations relating
15 to recordkeeping for prescription drugs to deny
16 or withhold Medicaid payments to pharmacies or
17 to audit the records of such pharmacies;
18 providing an effective date.
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20 Be It Enacted by the Legislature of the State of Florida:
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22 Section 1. Subsection (31) of section 499.003, Florida
23 Statutes, is amended to read:
24 499.003 Definitions of terms used in ss.
25 499.001-499.081.--As used in ss. 499.001-499.081, the term:
26 (31) "Pedigree paper" means:
27 (a) A document required pursuant to s. 499.0121(6)(d)
28 or (e); or
29 (b) Effective July 1, 2006, a document or electronic
30 in a form approved by the Department of Health and containing
31 information that records each distribution of any given legend
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1 drug, from sale by a pharmaceutical manufacturer, through
2 acquisition and sale by any wholesaler or repackager, until
3 final sale to a pharmacy or other person administering or
4 dispensing the drug. The information required to be included
5 on a legend drug's pedigree paper must at least detail the
6 amount of the legend drug;, its dosage form and strength;, its
7 lot numbers;, the name and address of each owner of the legend
8 drug and his or her signature;, its shipping information,
9 including the name and address of each person certifying
10 delivery or receipt of the legend drug; an invoice number, a
11 shipping document number, or another number uniquely
12 identifying the transaction;, and a certification that the
13 recipient wholesaler has authenticated the pedigree papers. If
14 the manufacturer or repackager has uniquely serialized the
15 individual legend drug unit, that identifier must also be
16 included on the pedigree. It must also include the name,
17 address, telephone number and, if available, e-mail contact
18 information of each wholesaler involved in the chain of the
19 legend drug's custody. The department shall adopt rules and a
20 form relating to the requirements of this paragraph no later
21 than 90 days after the effective date of this act.
22 Section 2. Paragraph (a) of subsection (1) of section
23 499.012, Florida Statutes, is amended to read:
24 499.012 Wholesale distribution; definitions; permits;
25 applications; general requirements.--
26 (1) As used in this section, the term:
27 (a) "Wholesale distribution" means distribution of
28 prescription drugs to persons other than a consumer or
29 patient, but does not include:
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1 1. Any of the following activities, which is not a
2 violation of s. 499.005(21) if such activity is conducted in
3 accordance with s. 499.014:
4 a. The purchase or other acquisition by a hospital or
5 other health care entity that is a member of a group
6 purchasing organization of a prescription drug for its own use
7 from the group purchasing organization or from other hospitals
8 or health care entities that are members of that organization.
9 b. The sale, purchase, or trade of a prescription drug
10 or an offer to sell, purchase, or trade a prescription drug by
11 a charitable organization described in s. 501(c)(3) of the
12 Internal Revenue Code of 1986, as amended and revised, to a
13 nonprofit affiliate of the organization to the extent
14 otherwise permitted by law.
15 c. The sale, purchase, or trade of a prescription drug
16 or an offer to sell, purchase, or trade a prescription drug
17 among hospitals or other health care entities that are under
18 common control. For purposes of this section, "common control"
19 means the power to direct or cause the direction of the
20 management and policies of a person or an organization,
21 whether by ownership of stock, by voting rights, by contract,
22 or otherwise.
23 d. The sale, purchase, trade, or other transfer of a
24 prescription drug from or for any federal, state, or local
25 government agency or any entity eligible to purchase
26 prescription drugs at public health services prices pursuant
27 to Pub. L. No. 102-585, s. 602 to a contract provider or its
28 subcontractor for eligible patients of the agency or entity
29 under the following conditions:
30 (I) The agency or entity must obtain written
31 authorization for the sale, purchase, trade, or other transfer
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1 of a prescription drug under this sub-subparagraph from the
2 Secretary of Health or his or her designee.
3 (II) The contract provider or subcontractor must be
4 authorized by law to administer or dispense prescription
5 drugs.
6 (III) In the case of a subcontractor, the agency or
7 entity must be a party to and execute the subcontract.
8 (IV) A contract provider or subcontractor must
9 maintain separate and apart from other prescription drug
10 inventory any prescription drugs of the agency or entity in
11 its possession.
12 (V) The contract provider and subcontractor must
13 maintain and produce immediately for inspection all records of
14 movement or transfer of all the prescription drugs belonging
15 to the agency or entity, including, but not limited to, the
16 records of receipt and disposition of prescription drugs. Each
17 contractor and subcontractor dispensing or administering these
18 drugs must maintain and produce records documenting the
19 dispensing or administration. Records that are required to be
20 maintained include, but are not limited to, a perpetual
21 inventory itemizing drugs received and drugs dispensed by
22 prescription number or administered by patient identifier,
23 which must be submitted to the agency or entity quarterly.
24 (VI) The contract provider or subcontractor may
25 administer or dispense the prescription drugs only to the
26 eligible patients of the agency or entity or must return the
27 prescription drugs for or to the agency or entity. The
28 contract provider or subcontractor must require proof from
29 each person seeking to fill a prescription or obtain treatment
30 that the person is an eligible patient of the agency or entity
31 and must, at a minimum, maintain a copy of this proof as part
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1 of the records of the contractor or subcontractor required
2 under sub-sub-subparagraph (V).
3 (VII) In addition to the departmental inspection
4 authority set forth in s. 499.051, the establishment of the
5 contract provider and subcontractor and all records pertaining
6 to prescription drugs subject to this sub-subparagraph shall
7 be subject to inspection by the agency or entity. All records
8 relating to prescription drugs of a manufacturer under this
9 sub-subparagraph shall be subject to audit by the manufacturer
10 of those drugs, without identifying individual patient
11 information.
12 2. Any of the following activities, which is not a
13 violation of s. 499.005(21) if such activity is conducted in
14 accordance with rules established by the department:
15 a. The sale, purchase, or trade of a prescription drug
16 among federal, state, or local government health care entities
17 that are under common control and are authorized to purchase
18 such prescription drug.
19 b. The sale, purchase, or trade of a prescription drug
20 or an offer to sell, purchase, or trade a prescription drug
21 for emergency medical reasons. For purposes of this
22 sub-subparagraph, the term "emergency medical reasons"
23 includes transfers of prescription drugs by a retail pharmacy
24 to another retail pharmacy to alleviate a temporary shortage.
25 c. The transfer of a prescription drug acquired by a
26 medical director on behalf of a licensed emergency medical
27 services provider to that emergency medical services provider
28 and its transport vehicles for use in accordance with the
29 provider's license under chapter 401.
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1 d. The revocation of a sale or the return of a
2 prescription drug to the person's prescription drug wholesale
3 supplier.
4 e. The donation of a prescription drug by a health
5 care entity to a charitable organization that has been granted
6 an exemption under s. 501(c)(3) of the Internal Revenue Code
7 of 1986, as amended, and that is authorized to possess
8 prescription drugs.
9 f. The transfer of a prescription drug by a person
10 authorized to purchase or receive prescription drugs to a
11 person licensed or permitted to handle reverse distributions
12 or destruction under the laws of the jurisdiction in which the
13 person handling the reverse distribution or destruction
14 receives the drug.
15 g. The transfer of a prescription drug by a hospital
16 or other health care entity to a person licensed under this
17 chapter to repackage prescription drugs for the purpose of
18 repackaging the prescription drug for use by that hospital, or
19 other health care entity and other health care entities that
20 are under common control, if ownership of the prescription
21 drugs remains with the hospital or other health care entity at
22 all times. In addition to the recordkeeping requirements of
23 s. 499.0121(6), the hospital or health care entity that
24 transfers prescription drugs pursuant to this sub-subparagraph
25 must reconcile all drugs transferred and returned and resolve
26 any discrepancies in a timely manner.
27 3. The distribution of prescription drug samples by
28 manufacturers' representatives or distributors'
29 representatives conducted in accordance with s. 499.028.
30 4. The sale, purchase, or trade of blood and blood
31 components intended for transfusion. As used in this
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1 subparagraph, the term "blood" means whole blood collected
2 from a single donor and processed either for transfusion or
3 further manufacturing, and the term "blood components" means
4 that part of the blood separated by physical or mechanical
5 means.
6 5. The lawful dispensing of a prescription drug in
7 accordance with chapter 465.
8 6. The sale, purchase, or trade of a prescription drug
9 between pharmacies as a result of a sale, transfer, merger, or
10 consolidation of all or part of the business of the pharmacies
11 from or with another pharmacy, whether accomplished as a
12 purchase and sale of stock or of business assets.
13 Section 3. Paragraph (h) of subsection (6) of section
14 499.0121, Florida Statutes, is amended to read:
15 499.0121 Storage and handling of prescription drugs;
16 recordkeeping.--The department shall adopt rules to implement
17 this section as necessary to protect the public health,
18 safety, and welfare. Such rules shall include, but not be
19 limited to, requirements for the storage and handling of
20 prescription drugs and for the establishment and maintenance
21 of prescription drug distribution records.
22 (6) RECORDKEEPING.--The department shall adopt rules
23 that require keeping such records of prescription drugs as are
24 necessary for the protection of the public health.
25 (h)1. This paragraph applies only to an affiliated
26 group, as defined by s. 1504 of the Internal Revenue Code of
27 1986, as amended, which is composed of chain drug entities,
28 including at least 50 retail pharmacies, warehouses, or
29 repackagers, which are members of the same affiliated group,
30 if the affiliated group:
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1 a. Discloses to the department the names of all its
2 members; and
3 b. Agrees in writing to provide records on
4 prescription drug purchases by members of the affiliated group
5 not later than 48 hours after the department requests such
6 records, regardless of the location where the records are
7 stored.
8 2. Each warehouse within the affiliated group must
9 comply with all applicable federal and state drug wholesale
10 permit requirements and must purchase, receive, hold, and
11 distribute prescription drugs only to a retail pharmacy or
12 warehouse within the affiliated group. Such a warehouse is
13 exempt from providing a pedigree paper in accordance with
14 paragraphs (d), (e), and (f) (e) to its affiliated group
15 member warehouse or retail pharmacy, provided that:
16 a. Any affiliated group member that purchases or
17 receives a prescription drug from outside the affiliated group
18 must receive a pedigree paper if the prescription drug is
19 distributed in or into this state and a pedigree paper is
20 required under this section and must authenticate the
21 documentation as required in subsection (4), regardless of
22 whether the affiliated group member is directly subject to
23 regulation under this chapter; and
24 b. The affiliated group makes available to the
25 department on request all records related to the purchase or
26 acquisition of prescription drugs by members of the affiliated
27 group, regardless of the location where the records are
28 stored, if the prescription drugs were distributed in or into
29 this state.
30 3. If a repackager repackages prescription drugs
31 solely for distribution to its affiliated group members for
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1 the exclusive distribution to and among retail pharmacies that
2 are members of the affiliated group to which the repackager is
3 a member:
4 a. The repackager must:
5 (I) In lieu of the written statement required by
6 paragraph (d), or paragraph (e), or paragraph (f), for all
7 repackaged prescription drugs distributed in or into this
8 state, state in writing under oath with each distribution of a
9 repackaged prescription drug to an affiliated group member
10 warehouse or repackager: "All repackaged prescription drugs
11 are purchased by the affiliated group directly from the
12 manufacturer or from a prescription drug wholesaler that
13 purchased the prescription drugs directly from the
14 manufacturer.";
15 (II) Purchase all prescription drugs it repackages:
16 (A) Directly from the manufacturer; or
17 (B) From a prescription drug wholesaler that purchased
18 the prescription drugs directly from the manufacturer; and
19 (III) Maintain records in accordance with this section
20 to document that it purchased the prescription drugs directly
21 from the manufacturer or that its prescription drug wholesale
22 supplier purchased the prescription drugs directly from the
23 manufacturer.
24 b. All members of the affiliated group must provide to
25 agents of the department on request records of purchases by
26 all members of the affiliated group of prescription drugs that
27 have been repackaged, regardless of the location where the
28 records are stored or where the repackager is located.
29 4. This paragraph expires July 1, 2006.
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1 Section 4. Notwithstanding any other provisions of law
2 to the contrary, the Agency for Health Care Administration may
3 not:
4 (1) Review or use any violation or alleged violation
5 of section 499.0121(6), Florida Statutes, or any rules adopted
6 under that section, as a ground for denying or withholding any
7 payment of a Medicaid reimbursement to a pharmacy licensed
8 under chapter 465, Florida Statutes; or
9 (2) Review or use compliance with section 499.0121(6),
10 Florida Statutes, or any rules adopted under that section, as
11 the subject of any audit of Medicaid-related records held by a
12 pharmacy licensed under chapter 465, Florida Statutes.
13 Section 5. This act shall take effect upon becoming a
14 law.
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16 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
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19 Prohibits the Agency for Health Care Administration from
reviewing or using any violation or alleged violation of the
20 record keeping requirements for prescription drugs to deny or
withhold Medicaid payments to pharmacies or to audit the
21 records of a pharmacy.
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