24 Del. Admin. Code § 2500-8.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 2500-8.0 - Requirements for Obtaining a Permit as a Wholesaler, Manufacturer, Outsourcing Facility or Third-Party Logistics Provider

8.1 Definitions. Words and terms defined in Title 24, Chapter 25 of the Delaware Code are applicable to these regulations. The following additional words and terms, when used within Section 8.0, shall have the following meaning unless the context clearly indicates otherwise:

"Authorized agent" means a pharmacist who is trained and qualified to inspect against the Board's standards and has been designated by the Board to conduct inspections on its behalf.

"Entity" means a wholesaler, manufacturer, outsourcing facility or third-party logistics provider, whether corporations, companies, associations, firms, partnerships, societies and joint-stock companies, but does not include individuals.

"Key personnel" includes, but is not limited to: the most senior individual or individuals responsible for facility operations, purchasing, and inventory control and the individual or individuals they report to and the pharmacists-in-charge; if the applicant is a corporation and not publicly traded on a major stock exchange, key personnel also includes: key company officers, key management, principals and key owners.

"Manufacturer" means a person engaged in the production, preparation, propagation, conversion, or processing of a drug or device, either directly or indirectly, by extraction from a substance of natural origin or independently by a chemical or biological synthesis. The term includes packaging or repackaging a substance or labeling or relabeling a container and promoting and marketing the drug or device and preparing and promoting a commercially available product from a bulk compound for resale by a person, including a pharmacy or practitioner. The term does not include compounding.

"Outsourcing facility" means a facility that is located within the United States of America at one address that is engaged in the compounding of sterile drugs and nonsterile drugs; has registered as an outsourcing facility with the federal Food and Drug Administration under Section 503B of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 353b); and is doing business within or into Delaware.

"Third-party logistics provider" means an entity that provides or coordinates warehousing or other logistics services for a dangerous drug or dangerous device in intrastate or interstate commerce on behalf of a manufacturer, wholesaler, or dispenser of the dangerous drug or dangerous device, but does not take ownership of the dangerous drug or dangerous device, nor have responsibility to direct its sale or disposition

"Wholesaler" means a person engaged in the wholesale distribution of drugs, including, but not limited to, a manufacturer's or distributor's warehouse, a chain drug warehouse or wholesale drug warehouse, an independent wholesale drug trader, and a pharmacy that engages in the wholesale distribution of drugs.

8.1.1 Clarification of Statutory Exceptions from the Definition of Wholesale Distribution.

8.1.1.1 "Common control," as used in 24 Del.C. § 2502(t)(3), 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.

8.1.1.2 "Emergency medical distributions," as provided for by 24 Del.C. § 2502(t)(4), may include, but is not limited to: transfers of a drug between a wholesale distributor and pharmacy to alleviate a temporary shortage of the drug arising from delays in or interruption of distribution schedules arranged in the ordinary course of business; or transfers of drugs by a licensed pharmacy or limited services permit holder to another licensed pharmacy or limited services permit holder. In all cases, transfers conducted pursuant to emergency medical reasons may be reviewed by the Board. Such transfers shall not exceed 5.0% of the total drug sales revenue of either the transferor or transferee pharmacy during any 12 consecutive month period.

8.2 Permit Requirements. Wholesalers, manufacturers, outsourcing facilities and third-party logistics providers that operate within this state, whether or not physically located within this state, must first be granted a permit by the Board.

8.2.1 The applicant for a permit shall provide information required by a Board-approved application, including but not limited to:

8.2.1.1 All trade or business names used, e.g. "doing business as" or "formerly known as." Trade or business names cannot be identical to the name used by another, unrelated entity permitted to purchase drugs in the state;

8.2.1.2 Name of the owner or owners and operator or operators and the pharmacist-in-charge of the applicant (if not the same entity), including:

8.2.1.2.1 If an individual: the full name, business address, Social Security number, and date of birth;

8.2.1.2.2 If a partnership: the full name, business address, Social Security number, and date of birth of each partner; the name of the partnership; and the partnership's federal employer identification number;

8.2.1.2.3 If a corporation not publicly traded on a major stock exchange: the full name, business address, Social Security number, date of birth, and title of corporate officers and directors; the corporate name or names; the name of the state of incorporation; the corporation's federal employer identification number; the name of the parent company, if any; and the full name, business address, and Social Security number of each shareholder owning 10% or more of the voting stock of the corporation, including over-the-counter (OTC) stock, unless the stock is traded on a major stock exchange and not OTC;

8.2.1.2.4 If a sole proprietorship: the full name, business address, Social Security number, and date of birth of the sole proprietor; and the name and federal employer identification number of the business entity;

8.2.1.3 Assurance that a copy of the applicant's written policies and procedures, required by subsection 8.6, will be available on-site for review prior to licensure and thereafter for inspection;

8.2.1.4 A list of all state and federal licenses, registrations, or permits, including the license, registration, or permit numbers, authorizing the applicant to purchase, possess, and distribute drugs;

8.2.1.5 A list of all disciplinary actions by state and federal agencies against the applicant, as well as any actions against principals, owners, directors, officers and pharmacists, including the pharmacist-in-charge;

8.2.1.6 A plan and full description of each facility and warehouse, including all locations utilized for drug storage, distribution, or both. The description should include the following:

8.2.1.6.1 square footage;

8.2.1.6.2 security and alarm system descriptions;

8.2.1.6.3 terms of lease or ownership;

8.2.1.6.4 quarantined area for damaged, outdated, deteriorated, misbranded, or adulterated drugs; and

8.2.1.6.5 temperature and humidity controls.

8.2.1.7 A copy of the deed or lease for the property on which the establishment is located. If leased, the lease must be for an original term of not less than one (1) calendar year.

8.2.2 Changes in any information required by subsection 8.2.1 shall be submitted to the Board within 30 days after such change.

8.2.3 An applicant shall submit an application fee to be determined by the Division of Professional Regulation.

8.2.4 Applicant facilities must undergo an inspection by the Board or its authorized agent prior to initial licensure and periodically thereafter in accordance with a schedule to be determined by the Board.

8.2.5 After receipt of a permit, the permittee must publicly display or have readily available all permits and the most recent inspection report administered by the Board.

8.2.6 All out-of-state permittees must comply with all rules, regulations, and laws of the state in which they are physically located and of all states in which they hold permits, including this state.

8.2.7 Information submitted to the Board or its authorized agent that is considered trade secret or proprietary information as defined under Delaware privacy, trade secret, and proprietary information laws shall be maintained accordingly and as required by law and be exempt from public disclosure.

8.3 Minimum Qualifications. The Board will consider the following factors in determining eligibility for granting a permit to applicants:

8.3.1 Any findings by the Board that the key personnel of the applicant has violated or been disciplined by a regulatory agency in any state violating Federal, State, or local laws relating to drug distribution;

8.3.2 Any criminal convictions of the key personnel of the applicant deemed substantially related to the practice of pharmacy as set forth in Section 17.0;

8.3.2.1 The Board shall consider the results of a criminal background check of the key personnel of the applicant to determine whether such individuals have been convicted of a crime substantially related to the practice of pharmacy as set forth in Section 17.0. The background check shall include all key personnel involved in the operations of the applicant. The background check will be conducted in compliance with any applicable federal, state, or local laws. The background check will be conducted at the applicant's expense and will be sufficient to include all states of residence since the individuals have been adults.

8.3.3 The applicant's past experience in the manufacture or distribution of drugs, including controlled substances;

8.3.4 The furnishing by the applicant of false or fraudulent material in any application made in connection with drug manufacturing or distribution;

8.3.5 Suspension, sanction or revocation by Federal, State, or local government against any license or permit currently or previously held by the applicant or any of its key personnel for violations of any Federal, State or local laws relating to drugs;

8.3.6 Compliance with the requirements of Delaware regulations under previously granted permits, if any;

8.3.7 Compliance with the requirements to maintain and/or make available to the Board authority or to Federal, State, or local law enforcement officials those records required to be maintained by wholesalers, manufacturers, outsourcing facilities and third-party logistics providers.

8.3.8 Any other factors or qualifications the Board considers relevant to and consistent with the public health and safety.

8.4 Personnel. As a condition for receiving and retaining a permit, the permittee shall:

8.4.1 Require each employee to have any combination of education, training, and experience sufficient for that individual to perform the assigned functions in such a manner as to provide assurance that the drug product quality, safety, and security will at all times be maintained as required by law;

8.4.2 Maintain records evidencing that each employee has been trained in accordance with the policy and procedure manual approved required by subsection 8.6. These records shall be kept for two (2) years from the date of separation of the employee from the company. Records on all current employees shall be available at any time for inspection;

8.4.3 Designate a registered agent in this state for service of process. Any permittee that does not so designate a registered agent shall be deemed to have designated the Secretary of State of Delaware to be its true and lawful attorney, upon whom may be served all legal processes in any action or proceeding against such permittee growing out of or arising from its activities in this state. A copy of any such service of process shall be mailed to the permittee by the Board via certified mail, return receipt requested, postage prepaid, at the address the prmittee has designated on its application for permit in Delaware. If an entity is not permitted in Delaware, service on the Secretary of State only shall be sufficient service; and

8.4.4 Ensure that all key personnel have at least an associate's degree from an accredited institution of higher education acceptable to the Board or a minimum of two (2) years of verifiable full-time managerial or supervisory experience acceptable to the Board in a licensed pharmacy or related business where the individual's responsibilities included, but were not limited to, recordkeeping, storage, and shipment of drugs.

8.5 Minimum Requirements for the Storage and Handling of Drugs and for Establishment and Maintenance of Drug Records. The following are required for the storage, handling, transport, and shipment of drugs and for the establishment and maintenance of records by permittees and their officers, agents, representatives, and employees:

8.5.1 Facilities at which drugs are received, stored, warehoused, handled, held, offered, marketed, displayed, or transported from shall:

8.5.1.1 Be of suitable construction to ensure that all drugs in the facility are maintained in accordance with each drug's product labeling or in compliance with the United States Pharmacopeia/National Formulary (USP/NF);

8.5.1.2 Be of suitable size and construction to allow for cleaning, maintenance, and proper operations;

8.5.1.3 Have adequate storage areas that provide adequate lighting, ventilation, temperature, sanitation, humidity, space, equipment, and security conditions. If no storage requirements are established for a drug, the drug may be held at "controlled" room temperature, as defined in the USP/NF, to help ensure that its identity, strength, quality, and purity are not adversely affected. Appropriate manual, electromechanical, or electronic temperature and humidity recording equipment, devices, or logs shall be utilized to document proper storage of drugs;

8.5.1.4 Have a quarantine area for storage of drugs that are: outdated; damaged; deteriorated; misbranded; adulterated; counterfeit, or suspected of being counterfeit; otherwise unfit for distribution; or are in immediate or sealed secondary containers that have been opened;

8.5.1.5 Be maintained in a clean and orderly condition;

8.5.1.6 Be free from infestation of any kind; and

8.5.1.7 Be a commercial location and not a personal dwelling or residence.

8.5.2 Wholesalers, manufacturers, outsourcing facilities and third-party logistics providers shall:

8.5.2.1 Provide for the secure and confidential storage of information with restricted access by developing and adhering to policies and procedures to protect the integrity and confidentiality of the information;

8.5.2.2 Maintain records of sources of the drugs, the identity and quantity of the drugs received and distributed or disposed of, and the date of receipt and distribution or other disposition of the drugs;

8.5.2.3 Maintain records of all personnel and their training; and

8.5.2.4 Have records available for inspection and photocopying by the authorized federal, state, or local law enforcement agency officials for a period of three (3) years following the disposition of the drugs. Records shall be kept at the inspection site or must be immediately retrievable by computer or other electronic means. Records may be kept at a central location apart from the inspection site and not electronically retrievable. Such records shall be made available for inspection within two (2) working days of a request by an authorized official of a federal, state, or local law enforcement agency.

8.5.3 Permittees involved in the distribution of controlled substances shall be duly registered with Drug Enforcement Administration (DEA) and the appropriate state agency and in compliance with all applicable laws and rules for the storage, handling, transport, shipment, and distribution of controlled substances.

8.6 Written Policies and Procedures. Permittees shall establish, maintain, and adhere to written policies and procedures for the receipt, security, storage, inventory, transport, shipping, and distribution of drugs. Permittees shall also establish, maintain, and adhere to written policies and procedures for: identifying, recording, and reporting losses or thefts; for correcting all errors and inaccuracies in inventories; and implementing and maintaining a continuous quality improvement system. Written policies and procedures shall include the following:

8.6.1 A procedure to be followed for handling recalls and withdrawals of drugs. Such procedure shall be adequate to deal with recalls and withdrawals due to:

8.6.1.1 Any action initiated at the request of FDA or any other federal, state, local law enforcement, or other government agency including the Board; or

8.6.1.2 Any volunteer action by the manufacturer to remove defective or potentially defective drugs from the market.

8.6.2 A procedure to prepare for, protect against, and handle any crisis that affects security or operation of any facility in the event of a strike, fire, flood, other natural disaster, or other situations of local, state, or national emergency.

8.6.3 A procedure to ensure that any outdated drugs shall be segregated from other drugs and either returned to the manufacturer or destroyed in accordance with federal, state, or local laws, including all necessary documentation and the appropriate witnessing. This procedure shall provide for written documentation of the disposition of outdated drugs. This documentation shall be maintained for three (3) years after disposition of the outdated drugs.

8.6.4 A procedure for reporting criminal or suspected criminal activities involving the inventory of a drug or drugs to the Board, FDA, and, if applicable, DEA and the Office of Narcotics and Dangerous Drugs (ONDD) within three (3) business days.

8.7 Salvaging and Reprocessing. Permittees shall be subject to the provisions of any applicable Federal, State, or local laws or rules that relate to drug product salvaging or reprocessing.

8.8 Security and Anti-Counterfeiting. All facilities.

8.8.1 Shall be secure from unauthorized entry:

8.8.1.1 Access from outside the premises shall be kept to a minimum and be well-controlled,

8.8.1.2 The outside perimeter of the premises shall be well-lighted, and

8.8.1.3 Entry into areas where drugs are held shall be limited to authorized personnel.

8.8.2 Shall be equipped with a security system that will provide suitable protection against theft and diversion. Appropriateness of security systems is subject to approval by the Board or its authorized agent. When appropriate, the security system shall provide protection against theft or diversion that is facilitated or hidden by tampering with computers or electronic records.

8.8.3 Shall be equipped with inventory management and control systems that protect against, detect, and document any instances of theft, diversion, or counterfeiting;

8.8.4 Shall be equipped with security systems to protect the integrity and confidentiality of data and documents and make such data and documents readily available to the Board and other federal, state, or local law enforcement officials; and

8.8.5 May possess and maintain, in good working order, technology and equipment to authenticate, track, and trace drugs. The technology and equipment shall satisfy standards set by the Board and shall only be used to conduct tracking, tracing, and authentication of drugs. Permittees shall employ, train, and document the training of personnel in the proper use of such technology and equipment.

24 Del. Admin. Code § 2500-8.0

10 DE Reg. 1628 (04/01/07)
21 DE Reg. 989 (6/1/2018) (Final)