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TITLE 25HEALTH SERVICES
PART 1DEPARTMENT OF STATE HEALTH SERVICES
CHAPTER 229FOOD AND DRUG
SUBCHAPTER WLICENSING OF WHOLESALE DISTRIBUTORS OF PRESCRIPTION DRUGS--INCLUDING GOOD MANUFACTURING PRACTICES
RULE §229.421Definitions

The following words and terms, when used in this subchapter, must have the following meanings, unless the context clearly indicates otherwise.

  (1) Act--The Texas Food, Drug, and Cosmetic Act, Health and Safety Code, Chapter 431.

  (2) Adulterated drug--Has the meaning specified in the Texas Food, Drug, and Cosmetic Act, Health and Safety Code, §431.111.

  (3) Authorized agent--An employee of the department who is designated by the commissioner to enforce the provisions of the Act.

  (4) Broker--A person engaged in the offering or contracting for wholesale distribution; sale and/or transfer of a prescription drug into, within, or out of Texas; and, who does not take physical possession of the prescription drug.

  (5) Change of ownership--A sole proprietor who transfers all or part of the facility's ownership to another person or persons; the removal, addition, or substitution of a person or persons as a partner in a facility owned by a partnership; a corporate sale, transfer, reorganization, or merger of the corporation which owns the facility if sale, transfer, reorganization, or merger causes a change in the facility's ownership to another person or persons; or if any other type of association, the removal, addition, or substitution of a person or persons as a principal of such association.

  (6) Co-licensed product partner--One of two or more parties that have the right to engage in the manufacturing or marketing of a prescription drug consistent with the United States Food and Drug Administration's regulations and guidances implementing the Prescription Drug Marketing Act of 1987 (Pub. L. No. 100 - 293).

  (7) Commissioner--Commissioner of the Department of State Health Services.

  (8) Department--The Department of State Health Services.

  (9) Device--An instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, that is:

    (A) recognized in the official United States Pharmacopoeia National Formulary or any supplement to it;

    (B) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease in man or other animals; or

    (C) intended to affect the structure or any function of the body of man or other animals and that does not achieve any of its principal intended purposes through chemical action within or on the body of man or other animals and is not dependent on metabolization for the achievement of any of its principal intended purposes.

  (10) Drop shipment--The sale of a prescription drug to a wholesale distributor by the manufacturer of the prescription drug, or by the manufacturer's co-licensed product partner, third-party logistics provider, or exclusive distributor, in which:

    (A) the wholesale distributor takes title but not physical possession of the prescription drug;

    (B) the wholesale distributor invoices the pharmacy, pharmacy warehouse, or other person authorized by law to dispense or administer the drug to a patient; and

    (C) the pharmacy, pharmacy warehouse, or other authorized person receives delivery of the prescription drug directly from the manufacturer or the manufacturer's third-party logistics provider or exclusive distributor.

  (11) Drug--Articles recognized in the official United States Pharmacopoeia National Formulary, or any supplement to it, articles designated or intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals, articles, other than food, intended to affect the structure or any function of the body of man or other animals, and articles intended for use as a component of any such article. The term does not include devices or their components, parts, or accessories. A food for which a claim is made in accordance with the Federal Act, §403(r), and for which the claim is approved by the U.S. Food and Drug Administration, is not a drug solely because the label or labeling contains such a claim.

  (12) Emergency medical reasons--Includes transfers of a prescription drug between a wholesale distributor or pharmacy to alleviate a temporary shortage of a prescription drug arising from delays in or interruption of regular distribution schedules; sales to nearby emergency medical services, i.e., ambulance companies and firefighting organizations in the same state or same marketing or service area, or nearby licensed practitioners of drugs for use in the treatment of acutely ill or injured persons; provision of minimal emergency supplies of drugs to nearby nursing homes for use in emergencies or during hours of the day when necessary drugs cannot be obtained; and transfers of prescription drugs by a retail pharmacy to alleviate a temporary shortage.

  (13) Federal Act--Federal Food, Drug, and Cosmetic Act, 21 United States Code (U.S.C.), §301, et seq., as amended.

  (14) Flea market--A location at which booths or similar spaces are rented or otherwise made available temporarily to two or more persons and at which the persons offer tangible personal property for sale.

  (15) Labeling--All labels and other written, printed, or graphic matter:

    (A) upon any drug or any of its containers or wrappers; or

    (B) accompanying such drug.

  (16) Manufacturer--A person who manufactures, prepares, propagates, compounds, processes, packages, or repackages prescription drugs, or a person who changes the container, wrapper, or labeling of any prescription drug package. A person licensed or approved by the United States Food and Drug Administration to engage in the manufacture of drugs or devices, consistent with the federal agency's definition of "manufacturer" under the agency's regulations and guidances implementing the Prescription Drug Marketing Act of 1987 (Pub. L. No. 100 - 293). The term does not include a pharmacist engaged in compounding that is done within the practice of pharmacy and pursuant to a prescription drug order or initiative from a practitioner for a patient or prepackaging that is done in accordance with Occupations Code, §562.154.

  (17) Manufacturer's exclusive distributor--A person who holds a wholesale distributor license under this subchapter, who contracts with a manufacturer to provide or coordinate warehousing, distribution, or other services on behalf of the manufacturer, and who takes title to, but does not have general responsibility to direct the sale or disposition of, the manufacturer's prescription drug. A manufacturer's exclusive distributor must be an authorized distributor of record to be considered part of the normal distribution channel.

  (18) Misbranded drug--Has the meaning specified in the Texas Food, Drug, and Cosmetic Act, Health and Safety Code, §431.112.

  (19) Nonprescription drug--Any drug that is not a prescription drug.

  (20) Normal distribution channel--A chain of custody for a prescription drug, either directly or by drop shipment, from the manufacturer of the prescription drug, the manufacturer to the manufacturer's co-licensed product partner, the manufacturer to the manufacturer's third-party logistics provider, or the manufacturer to the manufacturer's exclusive distributor, to:

    (A) a pharmacy to:

      (i) a patient; or

      (ii) another designated person authorized by law to dispense or administer the drug to a patient;

    (B) an authorized distributor of record to:

      (i) a pharmacy to a patient; or

      (ii) another designated person authorized by law to dispense or administer the drug to a patient;

    (C) an authorized distributor of record to a wholesale distributor licensed under this subchapter to another designated person authorized by law to administer the drug to a patient;

    (D) an authorized distributor of record to a pharmacy warehouse to the pharmacy warehouse's intracompany pharmacy;

    (E) a pharmacy warehouse to the pharmacy warehouse's intracompany pharmacy or another designated person authorized by law to dispense or administer the drug to a patient;

    (F) a person authorized by law to prescribe a prescription drug that by law may be administered only under the supervision of the prescriber; or

    (G) an authorized distributor of record to one other authorized distributor of record to a licensed practitioner for office use.

  (21) Person--An individual, corporation, business trust, estate, trust, partnership, association, or any other public or private legal entity.

  (22) Pharmacy warehouse--A location for which a person holds a wholesale drug distribution license under this subchapter, that serves as a central warehouse for drugs or devices, and from which intracompany sales or transfers of drugs or devices are made to a group of pharmacies under common ownership and control.

  (23) Prescription drug--Any drug (including any biological product, except for blood and blood components intended for transfusion or biological products that are also medical devices) required by Federal law (including Federal regulation) to be dispensed only by a prescription, including finished dosage forms and bulk drug substances subject to the Federal Act, §503(b).

  (24) Repackage--Repackaging or otherwise changing the container, wrapper, or labeling of a drug to further the distribution of a prescription drug. The term does not include repackaging by a pharmacist to dispense a drug to a patient or prepackaging in accordance with Occupations Code, §562.154.

  (25) Repackager--A person who engages in repackaging.

  (26) Third-party logistics provider--A person who holds a wholesale distributor license under this subchapter, who contracts with a prescription drug manufacturer to provide or coordinate warehousing, distribution, or other services on behalf of the manufacturer, and who does not take title to the prescription drug or have general responsibility to direct the prescription drug's sale or disposition. A third-party logistics provider must be an authorized distributor of record to be considered part of the normal distribution channel.

  (27) Verification--A person who is engaged in the wholesale distribution of a prescription drug, and who is in possession of a pedigree for a prescription drug shall, before distributing the prescription drug, authenticate and certify, in accordance with Texas Food, Drug, and Cosmetic Act, Health and Safety Code, §431.412 and §431.413 and §229.429(f)(3)(G) of this title, that each transaction listed on the pedigree has occurred.

  (28) Wholesale distribution--Distribution of prescription drugs to a person other than a consumer or patient. The term does not include:

    (A) intracompany sales of prescription drugs, which means transactions or transfers of prescription drugs between a division, subsidiary, parent, or affiliated or related company that is under common ownership and control or any transaction or transfer between co-license holders of a co-licensed product;

    (B) the sale, purchase, trade, or transfer of prescription drugs or the offer to sell, purchase, trade, or transfer a prescription drug for emergency medical reasons including a transfer of a prescription drug by a retail pharmacy to another retail pharmacy to alleviate a temporary shortage;

    (C) the distribution of prescription drug samples by a representative of a manufacturer;

    (D) the return of drugs by a hospital, health care entity, or charitable institution in accordance with 21 CFR, §203.23;

    (E) the sale of reasonable quantities by a retail pharmacy of a prescription drug to a licensed practitioner for office use;

    (F) the sale, purchase, or trade of a drug, an offer to sell, purchase, or trade a drug, or the dispensing of a drug under a prescription;

    (G) the sale, transfer, merger, or consolidation of all or part of the business of a pharmacy from or with another pharmacy, whether accomplished as a purchase and sale of stock or business assets;

    (H) the delivery of, or offer to deliver, a prescription drug by a common carrier solely in the common carrier's usual course of business of transporting prescription drugs, if the common carrier does not store, warehouse, or take legal ownership of the prescription drug;

    (I) the sale or transfer from a retail pharmacy or pharmacy warehouse of expired, damaged, returned, or recalled prescription drugs to the original manufacturer or to a third-party returns processor in accordance with the procedures set out in Title 21, Code of Federal Regulations, §203.23(a)(1) - (5) for other returns;

    (J) the purchase or other 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;

    (K) the sale, purchase, or trade of a drug or an offer to sell, purchase, or trade a drug by a charitable organization described in §501(c)(3) of the Internal Revenue Code of 1954 to a nonprofit affiliate of the organization to the extent otherwise permitted by law;

    (L) 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 purposes of this subchapter, 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, by contract, or otherwise; or

    (M) the sale, purchase, or trade of blood and blood components intended for transfusion.

  (29) Wholesale distributor--A person engaged in the wholesale distribution of prescription drugs, including, but not limited to, a manufacturer, repackager, own-label distributor, private-label distributor, jobber, broker, manufacturer warehouse, distributor warehouse, or other warehouse, manufacturer's exclusive distributor, authorized distributor of record, drug wholesaler or distributor, independent wholesale drug trader, specialty wholesale distributor, third-party logistics provider, retail pharmacy that conducts wholesale distribution, and pharmacy warehouse that conducts wholesale distribution.


Source Note: The provisions of this §229.421 adopted to be effective February 1, 2007, 32 TexReg 315; amended to be effective December 9, 2010, 35 TexReg 10755

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