18VAC110-50 Regulations Governing Wholesale Distributors, Manufacturers, and Warehousers

REGULATIONS

Vol. 32 Iss. 12 - February 08, 2016

TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING

BOARD OF PHARMACY

Chapter 50

Fast-Track Regulation

Titles of Regulations: 18VAC110-20. Regulations Governing the Practice of Pharmacy (amending 18VAC110-20-10; adding 18VAC110-20-211).

18VAC110-50. Regulations Governing Wholesale Distributors, Manufacturers, and Warehousers (amending 18VAC110-50-10; adding 18VAC110-50-51).

Statutory Authority: §§ 54.1-2400 and 54.1-3307 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: March 9, 2016.

Effective Date: March 24, 2016.

Agency Contact: Caroline Juran, RPh, Executive Director, Board of Pharmacy, 9960 Mayland Drive, Suite 300, Richmond, VA 23233-1463, telephone [phone], FAX [phone], or email [e-mail].

Basis: Section 54.1-2400 of the Code of Virginia authorizes the Board of Pharmacy to promulgate regulations that are reasonable and necessary to administer effectively the regulatory system and establish renewal schedules.

The specific authority to regulate prescription drugs in the Commonwealth is found in Chapters 33 (§ 54.1-3300 et seq.) and 34 (§ 54.1-3400 et seq.) of Title 54.1 of the Code of Virginia.

Purpose: The purpose of this regulatory action is to establish regulations that will authorize the board to inspect for and enforce standards for collection on controlled substances. If requirements for collection and destruction are not followed, there may be opportunity for diversion of donated drugs or adulteration of controlled substances when there is risk of commingling with existing stocks. Designation of authorized collection sites will facilitate the disposal of unused prescription drugs, which in turn reduces the supply of such drugs for abuse and diversion and protects public health and safety. However, the collection must be handled in a manner that protects the drugs until destruction in compliance with local, state, and federal laws.

Rationale for Using Fast-Track Process: This action was begun with a Notice of Intended Regulatory Action that was published in the Virginia Register of Regulations in Volume 31, Issue 20, on June 1, 2015, with comment until July 1, 2015. No comment was received, and no controversy is expected. The proposed regulation was unanimously recommended by the board's Regulation Committee and adopted by the board. To facilitate the authorization for collection sites, the board is promulgating the regulation as a fast-track rulemaking action under § 2.2-4012.1 of the Code of Virginia.

Substance: The new regulations will include requirements found in the federal Drug Enforcement Administration (DEA) regulations, such as registration with the DEA as an authorized collector to serve as a site for the collection of controlled substances from an ultimate user. An ultimate user is defined as a person who has lawfully obtained and who possesses a controlled substance for his own use or for the use of a member of his household or for an animal owned by him or a member of his household. Manufacturers, wholesale distributors, reverse distributors, narcotic treatment programs, hospitals with an on-site pharmacy, and retail pharmacies may become collectors by modifying their current DEA registration to be approved as authorized collectors.

Authorized collectors may maintain collection receptacles and then must dispose of collected drugs in accordance with DEA rules for destruction. Authorized collectors may conduct a mail-back program, but are not authorized to conduct take-back events. Registered collection sites may accept Schedule II through VI drugs in a single collection receptacle but may not accept illicit drugs (Schedule I, heroin, etc.). Authorized hospitals with on-site pharmacies may maintain collection receptacles at long-term care facilities at which drugs may be disposed on behalf of an ultimate user who resides or has resided at the facility.

Drugs so collected by the authorized collector must be destroyed in a matter that makes the drugs nonretrievable, meaning they cannot be transformed to a physical or chemical condition or state as a controlled substance or controlled substance analogue.

Issues: The advantage to the public is assurance that a facility that serves as an authorized collector is not commingling donated drugs intended for disposal with drug stocks and that the board has some oversight authority. There are no disadvantages. If a facility meets the DEA requirements for an authorized collector, it will be able to comply with board regulations.

The advantage to the Commonwealth is facilitation of authorized collector sites for disposal of unused medications to take those drugs out of circulation for abuse or diversion.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The proposed regulation will require that entities registered by the federal Drug Enforcement Administration (DEA) to collect and destroy unused drugs from consumers provide certain information to the Virginia Board of Pharmacy to help enforce compliance.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. In 2014, the DEA promulgated federal regulations to allow entities authorized to possess controlled substances to collect previously prescribed but unused drugs from a consumer (ultimate user) for appropriate disposal in a safe and effective manner consistent with controls against diversion. Authorized entities include pharmacies, manufacturers, wholesale distributors, reverse distributors, and narcotic treatment programs. Participation in the federal collection and disposal program is voluntary. Entities may choose to establish disposal programs for various reasons, including for profit, to build goodwill in the community, to attract customers, to advertise businesses, and to preserve the environment.¹ These costs and benefits are not discussed here because they cannot be attributed to this proposed state regulation. The proposed regulation merely requires that if an authorized Virginia entity participates in the DEA program it provide notification to the Virginia Board of Pharmacy (Board) of its name, address, license number, and the intended methods of collection. No additional fee is required from participants who hold a valid state controlled substances registration. However, if a narcotic treatment program without an in-house pharmacy wants to become an authorized collector, it will need a registration at a one-time cost of $90. Without the required information, the Board would not have essential information to enforce compliance and would completely rely on DEA. The Board states that DEA typically relies on state boards to conduct inspections and to regulate the safety and integrity of prescription drugs. Thus, the proposed regulation will likely enhance compliance with federal and state rules and reduce opportunities for diversion of donated drugs or adulteration of controlled substances if there is risk of co-mingling with existing stocks. In addition, the Board will be able to list names of collectors on its website to inform the public of where to take their unwanted drugs for destruction and promote collection efforts.

Businesses and Entities Affected. Currently, there are 1836 licensed pharmacies, 71 restricted manufacturers and 122 wholesale distributors. It is estimated that a very small number of those will choose to become authorized collectors.²

Localities Particularly Affected. The proposed changes apply throughout the Commonwealth.

Projected Impact on Employment. The proposed amendments are unlikely to significantly affect employment.

Effects on the Use and Value of Private Property. No significant impact on the use and value of private property is expected.

Real Estate Development Costs. No impact on real estate development costs is expected.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. The participation in collection of unused drugs is voluntary. Consequently, the proposed regulation does not impose significant costs or other effects on small businesses.

Alternative Method that Minimizes Adverse Impact. No significant adverse impact on small businesses is expected.

Adverse Impacts:

Businesses: The proposed regulation does not have a significant impact on non-small businesses.

Localities: The proposed regulation will not adversely affect localities.

Other Entities: The proposed regulation will not adversely affect other entities.

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¹The participation in the DEA collection and disposal program has certain costs and benefits associated with it.

²In a somewhat similar but essentially different program that collects donated drugs, there are only 15 voluntary participants in Virginia.

Agency's Response to Economic Impact Analysis: The Board of Pharmacy generally concurs with the analysis of the Department of Planning and Budget on proposed amended regulations for 18VAC110-20, Regulations Governing the Practice of Pharmacy. The board does not believe any entity would choose to become a collection site for unused drugs with profit as a motivation, since costs for destruction will likely be borne by the entity. Pharmacies and other authorized entities are more likely to provide the collection option as a service to the community in an effort to take unused drugs out of circulation for possible abuse.

Summary:

The amendments (i) establish standards for collection sites similar to those required by the Drug Enforcement Administration (DEA) to register as an "authorized collector" in Virginia, (ii) require notification to the board prior to establishing a collection site, and (iii) authorize the board to inspect for and enforce standards for collection. As of October 2014, DEA regulations allow entities authorized to possess controlled substances, such as pharmacies and wholesale distributors, to collect unused drugs to deliver for appropriate disposal in a safe and effective manner consistent with effective controls against diversion.

Part I
General Provisions

18VAC110-20-10. Definitions.

In addition to words and terms defined in §§ 54.1-3300 and 54.1-3401 of the Code of Virginia, the following words and terms when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise:

"ACPE" means the Accreditation Council for Pharmacy Education.

"Acquisition" of an existing entity permitted, registered or licensed by the board means (i) the purchase or transfer of all or substantially all of the assets of the entity or of any corporation that owns or controls the entity; (ii) the creation of a partnership by a sole proprietor or change in partnership composition; (iii) the acquiring of 50% or more of the outstanding shares of voting stock of a corporation owning the entity or of the parent corporation of a wholly owned subsidiary owning the entity, except that 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 (iv) the merger of a corporation owning the entity, or of the parent corporation of a wholly owned subsidiary owning the entity, with another business or corporation.

"Actively reports" means reporting all dispensing errors and analyses of such errors to a patient safety organization as soon as practical or at least within 30 days of identifying the error.

"Alternate delivery site" means a location authorized in 18VAC110-20-275 to receive dispensed prescriptions on behalf of and for further delivery or administration to a patient.

"Analysis" means a review of the findings collected and documented on each dispensing error, assessment of the cause and any factors contributing to the dispensing error, and any recommendation for remedial action to improve pharmacy systems and workflow processes to prevent or reduce future errors.

"Authorized collector" means a narcotic treatment program, hospital, or clinic with an on-site pharmacy, or pharmacy that is authorized by the U.S. Drug Enforcement Administration to receive drugs from an ultimate user, a person lawfully entitled to dispose of an ultimate user decedent's property, or a long-term care facility on behalf of an ultimate user who resides or has resided at that facility for the purpose of destruction.

"Beyond-use date" means the date beyond which the integrity of a compounded, repackaged, or dispensed drug can no longer be assured and as such is deemed to be adulterated or misbranded as defined in §§ 54.1-3461 and 54.1-3462 of the Code of Virginia.

"Board" means the Virginia Board of Pharmacy.

"CE" means continuing education as required for renewal of licensure by the Board of Pharmacy.

"CEU" means a continuing education unit awarded for credit as the equivalent of 10 contact hours.

"Chart order" means a lawful order for a drug or device entered on the chart or in a medical record of a patient by a prescriber or his designated agent.

"Compliance packaging" means packaging for dispensed drugs that is comprised of a series of containers for solid oral dosage forms and designed to assist the user in administering or self-administering the drugs in accordance with directions for use.

"Contact hour" means the amount of credit awarded for 60 minutes of participation in and successful completion of a continuing education program.

"Correctional facility" means any prison, penitentiary, penal facility, jail, detention unit, or other facility in which persons are incarcerated by government officials.

"DEA" means the United States U.S. Drug Enforcement Administration.

"Dispensing error" means one or more of the following discovered after the final verification by the pharmacist, regardless of whether the patient received the drug:

1. Variation from the prescriber's prescription drug order, including but not limited to:

a. Incorrect drug;

b. Incorrect drug strength;

c. Incorrect dosage form;

d. Incorrect patient; or

e. Inadequate or incorrect packaging, labeling, or directions.

2. Failure to exercise professional judgment in identifying and managing:

a. Known therapeutic duplication;

b. Known drug-disease contraindications;

c. Known drug-drug interactions;

d. Incorrect drug dosage or duration of drug treatment;

e. Known drug-allergy interactions;

f. A clinically significant, avoidable delay in therapy; or

g. Any other significant, actual, or potential problem with a patient's drug therapy.

3. Delivery of a drug to the incorrect patient.

4. Variation in bulk repackaging or filling of automated devices, including but not limited to:

a. Incorrect drug;

b. Incorrect drug strength;

c. Incorrect dosage form; or

d. Inadequate or incorrect packaging or labeling.

"Drug donation site" means a permitted pharmacy that specifically registers with the board for the purpose of receiving or redispensing eligible donated prescription drugs pursuant to § 54.1-3411.1 of the Code of Virginia.

"Electronic prescription" means a written prescription that is generated on an electronic application in accordance with 21 CFR Part 1300 and is transmitted to a pharmacy as an electronic data file.

"EMS" means emergency medical services.

"Expiration date" means that date placed on a drug package by the manufacturer or repacker beyond which the product may not be dispensed or used.

"Facsimile (FAX) prescription" means a written prescription or order which is transmitted by an electronic device over telephone lines which sends the exact image to the receiver (pharmacy) in a hard copy form.

"FDA" means the United States U.S. Food and Drug Administration.

"Floor stock" means a supply of drugs that have been distributed for the purpose of general administration by a prescriber or other authorized person pursuant to a valid order of a prescriber.

"Foreign school of pharmacy" means a school outside the United States and its territories offering a course of study in basic sciences, pharmacology, and pharmacy of at least four years in duration resulting in a degree that qualifies a person to practice pharmacy in that country.

"Forgery" means a prescription that was falsely created, falsely signed, or altered.

"FPGEC certificate" means the certificate given by the Foreign Pharmacy Equivalency Committee of NABP that certifies that the holder of such certificate has passed the Foreign Pharmacy Equivalency Examination and a credential review of foreign training to establish educational equivalency to board approved schools of pharmacy, and has passed approved examinations establishing proficiency in English.

"Generic drug name" means the nonproprietary name listed in the United States Pharmacopeia-National Formulary (USP-NF) or in the United States Adopted Names (USAN) and the USP Dictionary of Drug Names.

"Hospital" or "nursing home" means those facilities as defined in Title 32.1 of the Code of Virginia or as defined in regulations by the Virginia Department of Health.

"Inactive license" means a license that is registered with the Commonwealth but does not entitle the licensee to practice, the holder of which is not required to submit documentation of CE necessary to hold an active license.

"Long-term care facility" means a nursing home, retirement care, mental care, or other facility or institution that provides extended health care to resident patients.

"NABP" means the National Association of Boards of Pharmacy.

"Nuclear pharmacy" means a pharmacy providing radiopharmaceutical services.

"On duty" means that a pharmacist is on the premises at the address of the permitted pharmacy and is available as needed.

"On-hold prescription" means a valid prescription that is received and maintained at the pharmacy for initial dispensing on a future date.

"Patient safety organization" means an organization that has as its primary mission continuous quality improvement under the Patient Safety and Quality Improvement Act of 2005 (Pub. L. 109-41) and is credentialed by the Agency for Healthcare Research and Quality.

"Permitted physician" means a physician who is licensed pursuant to § 54.1-3304 of the Code of Virginia to dispense drugs to persons to whom or for whom pharmacy services are not reasonably available.

"Perpetual inventory" means an ongoing system for recording quantities of drugs received, dispensed, or otherwise distributed by a pharmacy.

"Personal supervision" means the pharmacist must be physically present and render direct, personal control over the entire service being rendered or act being performed. Neither prior nor future instructions shall be sufficient nor, shall supervision rendered by telephone, written instructions, or by any mechanical or electronic methods be sufficient.

"Pharmacy closing" means that the permitted pharmacy ceases pharmacy services or fails to provide for continuity of pharmacy services or lawful access to patient prescription records or other required patient records for the purpose of continued pharmacy services to patients.

"Pharmacy technician trainee" means a person who is currently enrolled in an approved pharmacy technician training program and is performing duties restricted to pharmacy technicians for the purpose of obtaining practical experience in accordance with § 54.1-3321 D of the Code of Virginia.

"PIC" means the pharmacist-in-charge of a permitted pharmacy.

"Practice location" means any location in which a prescriber evaluates or treats a patient.

"Prescription department" means any contiguous or noncontiguous areas used for the compounding, dispensing and storage of all Schedule II through VI drugs and devices and any Schedule I investigational drugs.

"PTCB" means the Pharmacy Technician Certification Board, co-founded by the American Pharmaceutical Association and the American Society of Health System Pharmacists, as the national organization for voluntary examination and certification of pharmacy technicians.

"Quality assurance plan" means a plan approved by the board for ongoing monitoring, measuring, evaluating, and, if necessary, improving the performance of a pharmacy function or system.

"Radiopharmaceutical" means any drug that exhibits spontaneous disintegration of unstable nuclei with the emission of nuclear particles or photons and includes any nonradioactive reagent kit or radionuclide generator that is intended to be used in the preparation of any such substance, but does not include drugs such as carbon-containing compounds or potassium-containing salts that include trace quantities of naturally occurring radionuclides. The term also includes any biological product that is labeled with a radionuclide or intended solely to be labeled with a radionuclide.

"Repackaged drug" means any drug removed from the manufacturer's original package and placed in different packaging.

"Robotic pharmacy system" means a mechanical system controlled by a computer that performs operations or activities relative to the storage, packaging, labeling, dispensing, or distribution of medications, and collects, controls, and maintains all transaction information.

"Safety closure container" means a container that meets the requirements of the federal Poison Prevention Packaging Act of 1970 (15 USC §§ 1471-1476), that is, in testing such containers, that 85% of a test group of 200 children of ages 41-52 months are unable to open the container in a five-minute period and that 80% fail in another five minutes after a demonstration of how to open it and that 90% of a test group of 100 adults must be able to open and close the container.

"Satellite pharmacy" means a pharmacy that is noncontiguous to the centrally permitted pharmacy of a hospital but at the location designated on the pharmacy permit.

"Special packaging" means packaging that is designed or constructed to be significantly difficult for children younger than five years of age to open to obtain a toxic or harmful amount of the drug contained therein within a reasonable time and not difficult for normal adults to use properly, but does not mean packaging that all such children cannot open or obtain a toxic or harmful amount within a reasonable time.

"Special use permit" means a permit issued to conduct a pharmacy of a special scope of service that varies in any way from the provisions of any board regulation.

"Storage temperature" means those specific directions stated in some monographs with respect to the temperatures at which pharmaceutical articles shall be stored, where it is considered that storage at a lower or higher temperature may produce undesirable results. The conditions are defined by the following terms:

1. "Cold" means any temperature not exceeding 8°C (46°F). A refrigerator is a cold place in which temperature is maintained thermostatically between 2° and 8°C (36° and 46°F). A freezer is a cold place in which the temperature is maintained thermostatically between -20° and -10°C (-4° and 14°F).

2. "Room temperature" means the temperature prevailing in a working area.

3. "Controlled room temperature" means a temperature maintained thermostatically that encompasses the usual and customary working environment of 20° to 25°C (68° to 77°F); that results in a mean kinetic temperature calculated to be not more than 25°C; and that allows for excursions between 15° and 30°C (59° and 86°F) that are experienced in pharmacies, hospitals, and warehouses.

4. "Warm" means any temperature between 30° and 40°C (86° and 104°F).

5. "Excessive heat" means any temperature above 40°C (104°F).

6. "Protection from freezing" means where, in addition to the risk of breakage of the container, freezing subjects a product to loss of strength or potency, or to the destructive alteration of its characteristics, the container label bears an appropriate instruction to protect the product from freezing.

7. "Cool" means any temperature between 8° and 15°C (46° and 59°F).

"Terminally ill" means a patient with a terminal condition as defined in § 54.1-2982 of the Code of Virginia.

"Ultimate user" means a person who has lawfully obtained, and who possesses, a controlled substance for his own use or for the use of a member of his household or for an animal owned by him or a member of his household.

"Unit dose container" means a container that is a single-unit container, as defined in United States Pharmacopeia-National Formulary, for articles intended for administration by other than the parenteral route as a single dose, direct from the container.

"Unit dose package" means a container that contains a particular dose ordered for a patient.

"Unit dose system" means a system in which multiple drugs in unit dose packaging are dispensed in a single container, such as a medication drawer or bin, labeled only with patient name and location. Directions for administration are not provided by the pharmacy on the drug packaging or container but are obtained by the person administering directly from a prescriber's order or medication administration record.

"USP-NF" means the United States Pharmacopeia-National Formulary.

"Well-closed container" means a container that protects the contents from extraneous solids and from loss of the drug under the ordinary or customary conditions of handling, shipment, storage, and distribution.

18VAC110-20-211. Disposal of drugs by authorized collectors.

Any narcotic treatment program, hospital, or clinic with an on-site pharmacy, or pharmacy wishing to accept for return a previously dispensed drug for the purpose of destruction from an ultimate user, a person lawfully entitled to dispose of an ultimate user decedent's property, or a long-term care facility on behalf of an ultimate user who resides or has resided at that facility shall first be authorized by the DEA as a collector. The process used to collect and destroy drugs, along with any required recordkeeping, shall comply with applicable federal and state law.

1. Prior to collecting drugs, an authorized collector shall submit in writing to the board:

a. The name, address, and license number, if applicable, of the facility;

b. The intended method or methods of collection (i.e., collection receptacle or mail-back program); and

c. Signature of PIC or medical director of a narcotic treatment program.

2. If an authorized collector chooses to cease acting as a collector, the PIC or medical director shall notify the board within 30 days.

3. A narcotic treatment program that does not have an in-house pharmacy shall obtain a controlled substance registration.

Part I
General Provisions

18VAC110-50-10. Definitions.

In addition to words and terms defined in §§ 54.1-3300 and 54.1-3401 of the Code of Virginia, the following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Authorized collector" means a registered manufacturer, wholesale distributor, or reverse distributor that is authorized by the U.S. Drug Enforcement Administration to receive drugs from an ultimate user, a person lawfully entitled to dispose of an ultimate user decedent's property, or a long-term care facility on behalf of an ultimate user who resides or has resided at that facility for the purpose of destruction.

"Authorized distributor of record" means a wholesale distributor with whom a manufacturer has entered into a written agreement under which such wholesale distributor is either authorized to distribute all of that manufacturer's prescription drug products, or only those products listed in the agreement, for such a period of time or number of shipments as specified in the agreement.

"Control number" means the unique identifying customer number assigned by the Virginia Department of Motor Vehicles to an individual when issuing a driver's license, learner's permit, or official identification card. This number is displayed on the driver's license or ID card in lieu of the social security number.

"DEA" means the United States U.S. Drug Enforcement Administration.

"Drop shipment" means the sale and distribution of a prescription drug in which a manufacturer, third party third-party logistics provider, or the manufacturer's exclusive distributor directly ships the prescription drug to a pharmacy, chain drug warehouse, or other person authorized to dispense or administer the prescription drug, and the pharmacy, chain drug warehouse or other authorized person is invoiced by a wholesale distributor that took title to the prescription drug during the shipping, but did not take physical possession of the prescription drug.

"Expiration date" means that date placed on a drug package by the manufacturer or repacker beyond which the product may not be dispensed or used.

"FDA" means the United States U.S. Food and Drug Administration.

"Manufacturer's exclusive distributor" means a distributor licensed by the board as a wholesale distributor or registered as a nonresident wholesale distributor who contracts with a manufacturer to provide or coordinate warehousing, distribution or other services on behalf of a manufacturer for a prescription drug and who takes title to that manufacturer's prescription drug, but who does not have general responsibility to direct the sale or disposition of the prescription drug.

"Third-party logistics provider" means an entity licensed by the board as a wholesale distributor or registered as a nonresident wholesale distributor who that contracts with a manufacturer to provide or coordinate warehousing, distribution, or other services on behalf of a manufacturer for a prescription drug, but does not take title to the prescription drug and who that only sells, distributes, or otherwise disposes of the prescription drug at the direction of the manufacturer.

"Ultimate user" means a person who has lawfully obtained, and who possesses, a controlled substance for his own use or for the use of a member of his household or for an animal owned by him or a member of his household.

"USP-NF" means the United States Pharmacopeia-National Formulary.

18VAC110-50-51. Disposal of drugs by authorized collectors.

Any manufacturer, wholesale distributor, or reverse distributor wishing to accept for return a previously dispensed drug in Schedules II through V for the purpose of destruction from an ultimate user, or a person lawfully entitled to dispose of an ultimate user decedent’s property, shall first be authorized by the DEA as a collector. The process used to collect and destroy drugs, along with any required recordkeeping, shall comply with federal and state law.

1. Prior to collecting drugs, an authorized collector shall submit in writing to the board:

a. The name, address, and license number, if applicable, of the facility;

b. The intended method or methods of collection (i.e., collection receptacle or mail-back program); and

c. Signature of the responsible party.

2. If an authorized collector chooses to cease acting as a collector, the responsible party shall notify the board within 30 days.

VA.R. Doc. No. R15-4325; Filed January 11, 2016, 2:46 p.m.