Can a pharmacy sell to a wholesaler?

The proposed Rule proposes to codify the FDA's existing informal recognition of the 5 percent “minimum quantity” rule, which states that pharmacies can sell up to 5 percent of their total annual prescription drug sales volume to professionals licensed for office use, and such pharmacies not considered wholesalers based on those sales. O'Connor, who certainly reflects the point of view of drug wholesalers, seems to be that anyone who sells drugs in quantity is a wholesaler, including pharmacists who own retail pharmacies; and it seems that board members agree that it should be left to the board's discretion to decide who is wholesaler and license that person after considering advertising, location, method of doing business, and sales representation. A wholesaler is any person who operates a business in which he sells drugs or miscellaneous items of medicines in bulk, that is, in quantities other than the consumer, and the State Board of Pharmacy is required to license all such persons. Even though the FDA is codifying the 5 percent limit, the agency strongly asserts that a pharmacy that sells drugs to entities that are not licensed professionals will be considered a wholesaler, regardless of whether sales fall below the 5 percent minimum quantity threshold.

Similarly, the FDA says that while some states have expanded the exemption to include pharmacy sales to entities other than licensed practitioners for office use, the legal language of FDCA Section 503 (e) (E) prohibits FDA from adopting the same expansion. It shall be a violation, punishable by a fine not exceeding two hundred and fifty dollars, for a manufacturer, distributor or seller of medicines or an employee or agent thereof to distribute a free sample of any medication, other than a cosmetic not intended to be ingested, to any residential home, unless the shows that it is administered directly to a person who is, or reasonably appears to be, over 18 years of age. Despite the fact that a pharmacist who owned a pharmacy in a retail section of a community was already licensed as a pharmacist and as a pharmacy owner, the board would also be expected to require him to obtain a license as a wholesaler, where the type of business he conducts also includes a continuous sale and constant supply of such drugs and miscellaneous items of medicines in large quantities and other than to the final consumer and the board may also consider their statements and advertising. The requirements of the proposed Rule, if finalized, would apply to stakeholders beyond traditional wholesalers, such as pharmacies, drug manufacturers and other business partners of prescription drug products that maintain various types of types of business partner licenses.

Co-located pharmacies and wholesale distributors are subject to additional scrutiny, which may require additional documentation to demonstrate compliance with state and federal laws and the drug distributor accreditation criteria listed below. Regents shall appoint an executive secretary to the board on the recommendation of the commissioner and shall be a pharmacist licensed in this state for at least five years. Drug Distributor Accreditation defines virtual wholesale distributors as applicants who sell a prescription drug or device but never physically own the product. For example, pharmacies that maintain pharmacy distribution centers may also be licensed as wholesalers and will be subject to the proposed rule.

Rachel Celli
Rachel Celli

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