SUBCHAPTER N.  WHOLESALE DISTRIBUTORS OF PRESCRIPTION DRUGS

Sec. 431.401.  DEFINITIONS.  In this subchapter:
(1)  "Authentication" means to affirmatively verify before any wholesale distribution of a prescription drug occurs that each transaction listed on the pedigree for the drug has occurred.
(2)  "Authorized distributor of record" means a distributor with whom a manufacturer has established an ongoing relationship to distribute the manufacturer's products in accordance with Section 431.4011.
(3)  "Pharmacy warehouse" means 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.
(3-a)  "Co-licensed product partner" means 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).
(3-b)  "Drop shipment" means 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.
(4)  "Logistics provider" means a person that receives prescription drugs only from the original manufacturer, delivers the prescription drugs at the direction of that manufacturer, and does not purchase, sell, trade, or take title to any prescription drug.
(4-a)  "Manufacturer" means 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 Section 562.154, Occupations Code.
(4-b)  "Manufacturer's exclusive distributor" means 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.
(5)  "Normal distribution channel" means 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 chapter 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.
(6)  "Pedigree" means a document or electronic file containing information that records each wholesale distribution of a prescription drug, from sale by a manufacturer, through acquisition and sale by any wholesale distributor or repackager, until final sale to a pharmacy or other person dispensing or administering the prescription drug.
(7)  "Place of business" means each location at which a drug for wholesale distribution is located.
(8)  "Prescription drug" has the meaning assigned by 21 C.F.R. Section 203.3.
(9)  "Repackage" means 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.
(10)  "Repackager" means a person who engages in repackaging.
(10-a)  "Third-party logistics provider" means 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.
(11)  "Wholesale distribution" means 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, distribution, trade, or transfer of prescription drugs or the offer to sell, purchase, distribute, trade, or transfer a prescription drug for emergency medical reasons;
(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 C.F.R. Section 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 sale, purchase, or trade of a drug, or the offer to sell, purchase, or trade a 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;
(I)  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; or
(J)  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.
(12)  "Wholesale distributor" means a person engaged in the wholesale distribution of prescription drugs, including 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.
Added by Acts 2005, 79th Leg., Ch. 282 (H.B. 164), Sec. 3(g), eff. March 1, 2006.
Amended by: 
Acts 2007, 80th Leg., R.S., Ch. 980 (S.B. 943), Sec. 3, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch. 1384 (S.B. 1645), Sec. 3, eff. June 19, 2009.