March 2005                        return to newsletter contents page

Analysis of Maryland HB 835

by Bonnie Basham, Capital Ideas

This bill is patterned after the Florida law we are trying to amend. However, much broader discretion is given to the Health Occupation Licensing Board and its staff than we allowed in the Florida law.

The bill is poorly worded, but it appears there will be a specified list of drugs which will require pedigree until 2010. However, this list will be created at a national level by the FDA and not at the state level as Florida’s list was.

The Board is charged with creating an electronic tracking system by the year 2010 which is a better solution than what is in the Florida bill.

In fact, the 2010 date could work to our advantage as we could argue the Florida 2006 date is too early.

Here are my specific comments regarding the bill as proposed.

Analysis of Maryland HB 835 -- Pedigree Papers Requirements

Health Occupation Licensing Board is controlling agency – I’m not certain what its relationship to the Department of Health is.

Board given broad rule making authority over all aspects of distribution, designated representative, all aspects of the enforcement of this bill. Authority should be “tightened down” with more specifics laid out in the bill.

Full pedigree does not begin until 2010 and not until state has created a tracking system that links with other national systems.

Specific Issues which should be addressed either by amendment to exclude animal health industry wholesalers, or expanded to include all drugs sold to all types of veterinarians.

Page 3 at line 27 includes veterinarians in the definition of health practitioner/authorized prescriber.

Page 4 at line 7 includes veterinary/animal health wholesalers in the general definition of wholesaler.

Page 7 & 8 beginning on line 28 excludes drugs used for farm animals – (interesting distinction).

Pages 10 – 12 creates the Authorized Distributor of Record; defines wholesaler. No exclusion for animal health wholesalers selling vet-use only meds.

 Animal health wholesalers will not be able to meet the requirements unless they (1) are on a list of the manufacturer and have line of credit with a manufacturer and (2) sell 5,000 units of the manufacturer’s product in a 12 month period.

Specified Drug is any drug appearing on a national list of such drugs, not a state-created drug list as is the case in Florida.

Wholesale distribution does not include returns from a customer – this could present problems because the wholesaler will not be able to verify that the specific unit of the drug being returned is the exact unit which they sold to the pharmacist. Returns will be handled within the contract between the pharmacy and the wholesaler and shall not be considered a wholesale transaction.

Pages 13 – 20

• New application process begins January 1, 2007.

• Contains all application requirements found in Florida License section, however level of insurance is not mandated; but $100,000 surety bond is required.

• Information is held as proprietary and therefore not in the public domain.

• Information regarding size of building is required.

• Fees set for licensure shall “cover the cost of licensing the industry.”

• Drug Advisory Council created and funded by wholesalers – in license fee. No animal health wholesaler is a member.

• Designated representative created/test is required. 

Page 20 at line 23

Wholesaler who is not and ADR shall pass pedigree starting with last ADR and coming forward in time. Note: this appears to apply only to specified drugs, but the language is not clear.

Pedigree shall contain name of drug; dosage; container size; number of containers the business name/address of all entities identified in the pedigree paper

Page 21 at line 9

Wholesaler distributing a specified drug which was not purchased directly from a manufacturer shall pass pedigree with the following information included:

 Name of drug, dosage, container size, number of containers, business name/address of all entities identified in the statement of record.

Page 21 at line 22

Board is responsible for creating an electronic tracking system by 2010. System must be part of national system.

Beginning in 2007, Board reports to the Governor about the progress of the creation of this system.

Page 22 at line 7

Due diligence of wholesalers is required. Wholesalers must determine whether the wholesalers with whom they do business are currently licensed; names and information of all corporate officers; determine whether company has had disciplinary actions taken against them by a regulatory agency; the method by which the selling wholesalers makes these determinations about those wholesalers from whom they purchase drugs; a written statement of ADR status with each manufacturer; the locations from which the selling wholesaler does business; the process the selling wholesaler uses to notify authorities of illegal activities by another wholesaler.