# Title 43 — Occupations and Professions

## Chapter 43-15.3 — Wholesale Drug Pedigree

### § 43-15.3-01. Definitions.

As used in this chapter, unless the context otherwise requires:
1. "Authentication" means to affirmatively verify before any wholesale distribution of a
prescription drug occurs that each transaction listed on the pedigree has occurred.
2. "Authorized distributor of record" means a wholesale distributor or a third-party
logistics provider with whom a manufacturer has established an ongoing relationship
to distribute the manufacturer's prescription drug. An ongoing relationship is deemed to
exist between the third-party logistics provider and the manufacturer or between the
wholesale distributor and a manufacturer when the third-party logistics provider or the
wholesale distributor, including any affiliated group of the wholesale distributor as
defined in section 1504 of the Internal Revenue Code [26 U.S.C. 1504], complies with
the following:
a. The wholesale distributor or a third-party logistics provider has a written
agreement currently in effect with the manufacturer evidencing the ongoing
relationship; and
b. The wholesale distributor or a third-party logistics provider is listed on the
manufacturer's current list of authorized distributors of record, which is updated
by the manufacturer on no less than a monthly basis.
3. "Board" means the state board of pharmacy.
4. "Broker" means a party that mediates between a buyer and a seller the sale or
shipment of prescription drugs, medical gases, or medical equipment.
5. "Chain pharmacy warehouse" means a physical location for prescription drugs,
medical gases, or medical equipment which acts as a central warehouse and performs
intracompany sales or transfers of the drugs, gases, or equipment to a group of chain
pharmacies that have the same common ownership and control.
6. "Colicensed product" means a prescription drug, medical gas, or medical equipment in
which two or more parties have the right to engage in the manufacturing or marketing
or in the manufacturing and marketing of the drug, gas, or equipment.
7. "Device" means an instrument, apparatus, implement, machine, contrivance, implant,
in vitro reagent, or other similar or related article, including any component, part, or
accessory which:
a. Is recognized in the United States pharmacopeia or the official national formulary
is intended for use in the diagnosis of disease or other conditions or in the cure,
mitigation, treatment, or prevention of disease, in humans or other animals, or is
intended to affect the structure or any function of the body of humans or other
animals;
b. Does not achieve its primary intended purposes through chemical action within or
on the body of a human or other animal; and
c. Is not dependent upon being metabolized for the achievement of its primary
intended purposes.
8. "Drop shipment" means the sale of a prescription drug, medical gas, or medical
equipment to a wholesale distributor by the manufacturer of the prescription drug,
medical gas, or medical equipment or to that manufacturer's colicensed product
partner, that manufacturer's third-party logistics provider, or that manufacturer's
exclusive distributor, under the terms of which the wholesale distributor or chain
pharmacy warehouse takes title but not physical possession of the prescription drug,
medical gas, or medical equipment and the wholesale distributor invoices the
pharmacy or chain pharmacy warehouse, or other person authorized by law to
dispense or administer the drug, gas, or equipment to a patient, and the pharmacy or
chain pharmacy warehouse or other authorized person receives delivery of the
prescription drug, medical gas, or medical equipment directly from the manufacturer,
or that manufacturer's third-party logistics provider, or that manufacturer's exclusive
distributor.

9. "Durable medical equipment" means medical devices, equipment, or supplies that may
be used in a residence, including oxygen and oxygen delivery systems and supplies,
ventilators, respiratory disease management devices, continuous positive airway
pressure (CPAP) devices, electronic and computerized wheelchairs and seating
systems, apnea monitors, transcutaneous medical nerve stimulator (TENS) units, low
air cutaneous pressure management devices, sequential compression devices,
feeding pumps, home phototherapy devices, infusion delivery devices, distribution of
medical gases to end users for human consumption, hospital beds, nebulizers, and
other similar equipment as may be determined by the board by rule.
10. "Facility" means a facility of a wholesale distributor where prescription drugs, medical
gases, or medical equipment are stored, handled, repackaged, or offered for sale.
11. "Manufacturer" means a person licensed or approved by the federal food and drug
administration to engage in the manufacture of drugs, medical gases, or devices by
manufacturing the drugs, gases, or devices at the person's own facility or by
contracting for the manufacturing by others.
12. "Manufacturer's exclusive distributor" means any person that contracts with a
manufacturer to provide or coordinate warehousing, distribution, or other services on
behalf of a manufacturer and which takes title to that manufacturer's prescription drug,
medical gases, or medical equipment but which does not have general responsibility to
direct the sale or disposition of the manufacturer's prescription drug, medical gas, or
medical equipment. The manufacturer's exclusive distributor must be licensed as a
wholesale distributor under this chapter, and to be considered part of the normal
distribution channel also must be an authorized distributor of record.
13. "Medical device" means a product or equipment used to diagnose a disease or other
condition in order to cure, treat, or prevent disease.
14. "Medical equipment" means equipment prescribed or distributed by a practitioner used
in the course of treatment of home care.
15. "Medical gas” means any gaseous substance that meets medical purity standards and
has application in a medical environment.
16. "Normal distribution channel" means a chain of custody for a prescription drug which
goes, directly or by drop shipment, from a manufacturer of the prescription drug, from
that manufacturer to that manufacturer's colicensed partner, from that manufacturer to
that manufacturer's third-party logistics provider, or from that manufacturer to that
manufacturer's exclusive distributor to:
a. A pharmacy, to a patient or other designated person authorized by law to
dispense or administer the drug to a patient;
b. A wholesale distributor, to a pharmacy, to a patient or other designated person
authorized by law to dispense or administer the drug to a patient;
c. A wholesale distributor, to a chain pharmacy warehouse, to that chain pharmacy
warehouse's intracompany pharmacy, to a patient or other designated person
authorized by law to dispense or administer the drug to a patient; or
d. A chain pharmacy warehouse, to the chain pharmacy warehouse's intracompany
pharmacy, to a patient or other designated person authorized by law to dispense
or administer the drug to a patient.
17. "Outsourcing facility" means a facility at one geographic location or address which is
engaged in anticipatory compounding of sterile drugs and complies with section 503(b)
of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 353(b)].
18. "Pedigree" means a document or an electronic file containing information that records
each distribution of any given prescription drug.
19. "Pharmacy distributor” means any pharmacy or hospital pharmacy licensed in this
state which is engaged in the delivery or distribution of prescription drugs, medical
gases, or medical equipment to any other pharmacy licensed in this state or to any
other person, including a wholesale drug distributor, engaged in the delivery or
distribution of prescription drugs, medical gases, or medical equipment and involved in
the actual, constructive, or attempted transfer of a drug, gas, or equipment in this state
to other than the ultimate consumer, when the financial value of the drugs, gases, or

equipment is equivalent to at least five percent of the total gross sales of the pharmacy
distributor.
20. "Prescription drug" means 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 section 503(b) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C.
353(b)].
21. "Repackage" means repackaging or otherwise changing the container, wrapper, or
labeling to further the distribution of a prescription drug. The term does not include
actions completed by the pharmacists responsible for dispensing product to the
patient.
22. "Repackager" means a person that repackages.
23. "Third-party logistics provider" means a person that contracts with a wholesale
distributor or a prescription drug, medical gas, or medical equipment manufacturer to
provide or coordinate warehousing, wholesale distribution, or other services on behalf
of a manufacturer, but does not take title to the prescription drug, medical gas, or
medical equipment or have general responsibility to direct the prescription drug's,
medical gas's, or medical equipment's sale or disposition. The third-party logistics
provider must be licensed independently under this chapter and to be considered part
of the normal distribution channel must also be an authorized distributor of record.
24. "Trace" means the capability to identify the historical locations, the records of
ownership, and the packaging hierarchy for a particular traceable item. "Trace"
answers questions such as where has the item been, who previously owned the item,
and in what packaging hierarchy did the product exist at various locations.
25. "Track" means the capability to identify the current, and at the time of shipment the
intended future, location, ownership, and packaging hierarchy of a traceable item
through the supply chain as the traceable item moves between parties. "Track"
addresses both forward and reverse logistics operations. "Track" answers questions
such as where is the item currently, who is the next intended recipient, and what is the
current packaging hierarchy of the item.
26. "Virtual distributor" means a person that arranges for the distribution of a drug or
device and which may or may not take actual possession of the drug or device but
contracts with others for the distribution, purchase, and sale.
27. "Virtual manufacturer" means a person that owns the new drug application or
abbreviated new drug application for a drug or device and which contracts with others
for the actual manufacturing of the drug or device.
28. "Wholesale distribution" means distribution of prescription drugs, medical gases, or
medical equipment to persons other than a consumer or patient. The term does not
include:
a. Intracompany sales of prescription drugs, medical gases, or medical equipment,
meaning any transaction or transfer between any division, subsidiary, parent or
affiliated or related company under common ownership and control of a corporate
entity, or any transaction or transfer between colicensees of a colicensed product.
b. The sale, purchase, distribution, trade, or transfer of a prescription drug, medical
gas, or medical equipment or the offer to sell, purchase, distribute, trade, or
transfer a prescription drug, medical gas, or medical equipment for emergency
medical reasons.
c. 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, gas, or equipment for the
hospital's or health care entity's own use from the group purchasing organization
or from other hospitals or health care entities that are members of such
organizations.
d. The sale, purchase, or trade of a drug, gas, or equipment or an offer to sell,
purchase, or trade a drug, gas, or equipment by a charitable organization

described in section 501(c)(3) of the Internal Revenue Code of 1954 to a
nonprofit affiliate of the organization to the extent otherwise permitted by law.
e. The sale, purchase, or trade of a drug, gas, or equipment or an offer to sell,
purchase, or trade a drug, gas, or equipment among hospitals or other health
care entities that are under common control.
f. The distribution of prescription drug samples by manufacturers' representatives.
g. Drug returns, when conducted by a hospital, health care entity, or charitable
institution in accordance with title 21, Code of Federal Regulations, section
203.23.
h. The sale of minimal quantities of prescription drugs, medical gases, or medical
equipment by retail pharmacies to licensed practitioners for office use.
i. The sale, purchase, or trade of a drug, gas, or equipment; an offer to sell,
purchase, or trade a drug, gas, or equipment; or the dispensing of a drug, gas, or
equipment pursuant to a prescription.
j. 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.
k. The sale, purchase, distribution, trade, or transfer of a prescription drug, medical
gas, or medical equipment from one authorized distributor of record to one
additional authorized distributor of record when the manufacturer has stated in
writing to the receiving authorized distributor of record that the manufacturer is
unable to supply such prescription drug, medical gas, or medical equipment and
the supplying authorized distributor of record states in writing that the prescription
drug, medical gas, or medical equipment being supplied had until that time been
exclusively in the normal distribution channel.
l. The delivery of, or offer to deliver, a prescription drug, medical gas, or medical
equipment by a common carrier solely in the common carrier's usual course of
business of transporting prescription drugs, medical gases, or medical equipment
and the common carrier does not store, warehouse, or take legal ownership of
the prescription drug, medical gas, or medical equipment.
m. The sale or transfer from a retail pharmacy or chain pharmacy warehouse of
expired, damaged, returned, or recalled prescription drugs, medical gases, or
medical equipment to the original manufacturer or to a third-party returns
processor.
29. "Wholesale distributor" means anyone engaged in the wholesale distribution of
prescription drugs, medical gases, or medical equipment, including manufacturers;
virtual manufacturers; repackagers; own-label distributors; private-label distributors;
jobbers; brokers; virtual distributors and warehouses, including manufacturers' and
distributors' warehouses; manufacturers' exclusive distributors; authorized distributors
of record; drug, gas, or equipment wholesalers or distributors; independent wholesale
drug, gas, or equipment traders; specialty wholesale distributors; retail pharmacies
that conduct wholesale distribution; and chain pharmacy warehouses that conduct
wholesale distribution. To be considered part of the normal distribution channel, such
wholesale distributor must also be an authorized distributor of record.
### § 43-15.3-02. Rulemaking authority.

The board shall adopt rules that conform with wholesale distributor licensing guidelines
adopted by the federal food and drug administration, including rules necessary to carry out the
purposes of this chapter, that incorporate and set detailed standards for meeting each of the
license prerequisites set forth in this chapter, and that establish reasonable fees to carry out this
chapter.
### § 43-15.3-03. Wholesale distributor licensing requirement - Minimum requirements for

licensure.
1. A wholesale distributor that engages in the wholesale distribution of prescription drugs,
medical gases, or medical equipment shall pay the annual fee required by the board,

must be licensed by the board under this chapter, and must be properly licensed in
any other state in which the wholesale distributor engages in the distribution of
prescription drugs, medical gases, or medical equipment before engaging in wholesale
distributions of wholesale prescription drugs, medical gases, or medical equipment in
this state. The licensee shall operate in a manner prescribed by law and according to
rules adopted by the board. However, information and qualification requirements for
licensure beyond that required by federal law or regulation do not apply to
manufacturers distributing the manufacturers' own United States food and drug
administration-approved drugs, gases, or equipment, unless particular requirements
are deemed necessary and appropriate following rulemaking. The board may grant a
temporary license when the wholesale distributor or pharmacy distributor first applies
for a license to operate within this state. A temporary license is valid until the board
finds that the applicant meets the requirements for regular licensure.
2. A person may not engage in wholesale distributions of prescription drugs without
obtaining and maintaining accreditation or certification from the national association of
boards of pharmacy's verified accredited wholesale distributor or an accreditation body
approved by the board, obtaining and maintaining a license issued by the board, and
paying fees as may be required by the board.
3. The board shall require the following minimum information from each wholesale
distributor applying to get a license under subsection 1:
a. The name, full business address, and telephone number of the licensee.
b. All trade or business names used by the licensee.
c. Addresses, telephone numbers, and the names of contact persons for all facilities
used by the licensee for the storage, handling, and distribution of prescription
drugs.
d. The type of ownership or operation.
e. The name of every owner and operator of the licensee, including:
(1) If an individual, the name of the individual;
(2) If a partnership, the name of each partner, and the name of the partnership;
(3) If a corporation, the name and title of each corporate officer and director, the
corporate names, and the name of the state of incorporation; and
(4) If a sole proprietorship, the full name of the sole proprietor and the name of
the business entity.
f. A list of all licenses and permits issued to the applicant by any other state that
authorizes the applicant to purchase or possess prescription drugs, medical
gases, or medical equipment.
g. The name of the applicant's designated representative for the facility and for a
prescription drug wholesaler applicant, the personal information statement and
fingerprints required pursuant to subdivision h for the individual identified as the
prescription drug wholesaler applicant's designated representative for the facility.
h. Each individual identified by a prescription drug wholesaler applicant as a
designated representative for a facility and therefore required by subdivision g to
provide a personal information statement and fingerprints shall provide the
following information to the state:
(1) The individual's places of residence for the past seven years;
(2) The individual's date and place of birth;
(3) The individual's occupations, positions of employment, and offices held
during the past seven years;
(4) The principal business and address of any business, corporation, or other
organization in which each office of the individual was held or in which each
occupation or position of employment was carried on;
(5) Whether the individual has been, during the past seven years, the subject of
any proceeding for the revocation of any license or any criminal violation
and, if so, the nature of the proceeding and the disposition of the
proceeding;

(6) Whether, during the past seven years, the individual has been enjoined,
either temporarily or permanently, by a court of competent jurisdiction from
violating any federal or state law regulating the possession, control, or
distribution of prescription drugs or criminal violations, together with details
concerning any of those events;
(7) A description of any involvement by the individual with any business,
including any investments, other than the ownership of stock in a publicly
traded company or mutual fund, during the past seven years, which
manufactured, administered, prescribed, distributed, or stored
pharmaceutical products and any lawsuits in which the businesses were
named as a party;
(8) A description of any misdemeanor or felony criminal offense of which the
individual, as an adult, was found guilty, regardless of whether adjudication
of guilt was withheld or whether the individual pled guilty or nolo contendere.
If the individual indicates that a criminal conviction is under appeal and
submits a copy of the notice of appeal of that criminal offense, the applicant
must, within fifteen days after the disposition of the appeal, submit to the
state a copy of the final written order of disposition; and
(9) A photograph of the individual taken in the previous one hundred eighty
days.
4. The information required under subsection 3 must be provided under oath.
5. The board may not issue a wholesale distributor license to an applicant, unless the
board:
a. Inspects or appoints a third party recognized by the board for the purpose of
inspecting the wholesale distribution operations of the facility before initial
licensure and continues to inspect periodically thereafter in accordance with a
schedule to be determined by the board, but not less than every three years.
Manufacturing facilities are exempt from inspection by the board if the
manufacturing facilities are currently registered with the federal food and drug
administration in accordance with section 510 of the Federal Food, Drug, and
Cosmetic Act [21 U.S.C. 301]; and
b. Determines that the designated representative meets the following qualifications:
(1) Is at least twenty-one years of age;
(2) Has been employed full time for at least three years in a pharmacy or with a
wholesale distributor in a capacity related to the dispensing and distribution
of, and recordkeeping relating to, prescription drugs, medical gases, or
medical equipment;
(3) Is employed by the applicant full time in a managerial level position;
(4) Is actively involved in and aware of the actual daily operation of the
wholesale distributor;
(5) Is physically present at the facility of the applicant during regular business
hours, except when the absence of the designated representative is
authorized, including sick leave and vacation leave;
(6) Is serving in the capacity of a designated representative for only one
applicant at a time, except where more than one licensed wholesale
distributor is colocated in the same facility and the wholesale distributors are
members of an affiliated group, as defined in section 1504 of the Internal
Revenue Code [26 U.S.C. 1504];
(7) Does not have any convictions under any federal, state, or local laws
relating to wholesale or retail prescription drug, medical gas, or medical
equipment distribution or distribution of controlled substances; and
(8) Does not have any felony conviction under federal, state, or local laws.
6. The board shall submit the fingerprints provided by an individual with a license
application for a statewide and nationwide criminal history background record check.
The nationwide criminal history background record check must be conducted in the

manner provided in section 12-60-24. All costs associated with the background check
are the responsibility of the applicant.
7. The board shall require every wholesale prescription drug distributor applying for a
license to submit a bond of at least one hundred thousand dollars, or other equivalent
means of security acceptable to the state, including an irrevocable letter of credit or a
deposit in a trust account or financial institution. Obtaining and maintaining
accreditation or certification from the national association of boards of pharmacy's
verified accredited wholesale distributor satisfies this requirement. A chain pharmacy
warehouse that is engaged only in intracompany transfers is not subject to the bond
requirement. The purpose of the bond is to secure payment of any fines or penalties
imposed by the state and any fees and costs incurred by the state regarding that
license which are authorized under state law and which the licensee fails to pay thirty
days after the fines, penalties, or costs become final. The state may make a claim
against the bond or security until one year after the licensee's license ceases to be
valid. A single bond may cover all facilities operated by the applicant in the state. Any
chain pharmacy warehouse that is engaged only in intracompany transfers is exempt
from the bond requirement.
8. If a wholesale distributor distributes prescription drugs, medical gases, or medical
equipment from more than one facility, the wholesale distributor shall obtain a license
for each facility.
9. If a manufacturer manufactures prescription drugs, medical gases, or medical
equipment in more than one facility but does not engage in wholesale distribution to
North Dakota from those facilities, the manufacturer is not required to obtain a license
for each facility.
10. The board shall mail or electronic mail a notice for license renewal to each licensee
before the first day of the month in which the license expires. If application for renewal
of the license, along with the required fee, is not received by the board before the first
day of the following month, the license expires on the last day of that month. Timely
renewal is the responsibility of the licensee.
11. In accordance with each licensure renewal, the board shall make available on the
board's website for each wholesale distributor licensed under this section the
information that the wholesale distributor provided pursuant to subsection 3. Within
thirty days of receiving the notice, the wholesale distributor shall identify and state
under oath to the state licensing authority all changes or corrections to the information
that was provided under subsection 3. Changes in, or corrections to, any information in
subsection 3 must be submitted to the board as required by that authority. The board
may suspend, revoke, or refuse to renew the license of a wholesale distributor if the
board determines that the wholesale distributor no longer qualifies for the license
issued under this section.
12. The designated representative identified pursuant to subdivision g of subsection 3
must receive and complete continuing training in applicable federal and state laws
governing wholesale distribution of prescription drugs, medical gases, or medical
equipment.
13. Information provided under subdivision h of subsection 3 may not be disclosed to any
person other than a government agency that needs the information for licensing or
monitoring purposes.
### § 43-15.3-04. Requirements to distribute prescription drugs, medical gases, or medical

equipment.
1. A person may not engage in wholesale distributions of prescription drugs without
obtaining and maintaining accreditation or certification from the national association of
boards of pharmacy's verified accredited wholesale distributor or an accreditation body
approved by the board under subsection 4, obtaining and maintaining a license issued
by the board, and paying any reasonable fee required by the board.
2. The board may not issue or renew the license of a wholesale distributor that does not
comply with this chapter. The board shall require a separate license for each facility or

location where wholesale distribution operations are conducted. An agent or employee
of any licensed wholesale distributor does not need a license and may lawfully
possess pharmaceutical drugs, medical gases, or medical equipment when acting in
the usual course of business or employment. The issuance of a license under this
chapter does not affect tax liability imposed by the tax department on any wholesale
distributor.
3. An out-of-state wholesale distributor or pharmacy distributor or a principal or agent of
the distributor may not conduct business in this state unless the distributor has
obtained the necessary license from the board, paid the fee required by the board, and
registered with the secretary of state. Application for a license must be made on a form
furnished by the board and when submitted by the applicant to the board must include
a copy of the certificate of authority from the secretary of state. The issuance of a
license under this section does not affect tax liability imposed by the tax department on
any out-of-state wholesale distributor or pharmacy distributor. The board may adopt
rules that permit out-of-state wholesale distributors to obtain a license on the basis of
reciprocity if an out-of-state wholesale distributor possesses a valid license granted by
another state and the legal standards for licensure in the other state are comparable to
the standards under this chapter and the other state extends reciprocity to wholesale
drug distributors licensed in this state. However, if the requirements for licensure under
this chapter are more restrictive than the standards of the other state, the out-of-state
wholesale distributor shall comply with the additional requirements of this chapter to
obtain a license under this chapter.
4. The board may adopt rules to approve an accreditation body to evaluate a wholesale
distributor's operations to determine compliance with professional standards, this
chapter, and any other applicable law, and perform inspections of each facility and
location where wholesale distribution operations are conducted by the wholesale
distributor.
5. The board or a designee of the board may conduct inspections during normal business
hours upon all open premises purporting or appearing to be used by a wholesale
distributor or pharmacy distributor in this state. A distributor that provides adequate
documentation of the most recent satisfactory inspection less than three years old by
the United States food and drug administration is exempt from further inspection for a
period of time determined by the board. This exemption does not bar the board from
initiating an investigation pursuant to a complaint regarding a wholesale distributor or
pharmacy distributor. A wholesale distributor or pharmacy distributor may keep records
at a central location apart from the principal office of the wholesale distributor or
pharmacy distributor or the location at which the drugs are stored and from which they
were shipped, provided that the records are made available for inspection within three
business days of a request by the board. The records may be kept in any form
permissible under federal law applicable to prescription recordkeeping.
### § 43-15.3-05. Restrictions on transactions.

1. A wholesale distributor shall receive prescription drug returns or exchanges from a
pharmacy or chain pharmacy warehouse under the terms and conditions of the
agreement between the wholesale distributor and the pharmacy or between the
wholesale distributor and the chain pharmacy warehouse, including the returns of
expired, damaged, and recalled pharmaceutical product to either the original
manufacturer or a third-party returns processor, and the returns or exchanges are not
subject to the pedigree requirement of section 43-15.3-06 if they are exempt from
pedigree under the federal food and drug administration's currently applicable
guidance for the federal Prescription Drug Marketing Act of 1987 [Pub. L. 100-293;
102 Stat. 95]. Wholesale distributors and pharmacies must ensure that the aspects of
this operation are secure and do not permit the entry of adulterated and counterfeit
product.
2. A manufacturer or wholesale distributor shall furnish prescription drugs only to a
person licensed by the appropriate state licensing authorities. Before furnishing

prescription drugs to a person not known to the manufacturer or wholesale distributor,
the manufacturer or wholesale distributor shall affirmatively verify that the person is
legally authorized to receive the prescription drugs by contacting the appropriate state
licensing authorities.
3. Prescription drugs furnished by a manufacturer or wholesale distributor may be
delivered only to the premises listed on the license. The manufacturer or wholesale
distributor may furnish prescription drugs to an individual or agent of that individual at
the premises of the manufacturer or wholesale distributor if:
a. The identity and authorization of the recipient are properly established; and
b. This method of receipt is employed only to meet the immediate needs of a
particular patient of the authorized individual.
4. Prescription drugs may be furnished to a hospital pharmacy receiving area if a
pharmacist or authorized receiving personnel signs, at the time of delivery, a receipt
showing the type and quantity of the prescription drug so received. Any discrepancy
between receipt and the type and quantity of the prescription drug actually received
must be reported to the delivering manufacturer or wholesale distributor by the next
business day after the delivery to the pharmacy receiving area.
5. A manufacturer or wholesale distributor may not accept payment for or allow the use of
a person's credit to establish an account for the purchase of prescription drugs from
any individual other than the owner of record, the chief executive officer, or the chief
financial officer listed on the license of an individual legally authorized to receive
prescription drugs. Any account established for the purchase of prescription drugs
must bear the name of the licensee.
### § 43-15.3-06. Pedigree.

1. Each person who is engaged in wholesale distribution of prescription drugs, including
repackagers but excluding the original manufacturer of the finished form of the
prescription drug which leave or have ever left the normal distribution channel, before
each wholesale distribution of the drug, must provide a pedigree to the person who
receives the drug.
a. A retail pharmacy or chain pharmacy warehouse must comply with the
requirements of this section only if the pharmacy or chain pharmacy warehouse
engages in wholesale distribution of prescription drugs.
b. The board shall determine by July 1, 2009, a targeted implementation date for
electronic track and trace pedigree technology. The determination must be based
on consultation with manufacturers, distributors, and pharmacies responsible for
the sale and distribution of prescription drug products in this state. After
consultation with interested stakeholders and before implementation of the
electronic track and trace pedigree technology, the board must determine that the
technology is universally available across the entire prescription pharmaceutical
supply chain. The implementation date for the mandated electronic track and
trace pedigree technology may not be before July 1, 2010, and may be extended
by the board in one-year increments if it appears the technology is not universally
available across the entire prescription pharmaceutical supply chain.
2. Each person engaged in the wholesale distribution of a prescription drug, including a
repackager but excluding the original manufacturer of the finished form of the
prescription drug, that is provided a pedigree for a prescription drug and attempts to
further distribute that prescription drug shall verify affirmatively before any distribution
of a prescription drug occurs that each transaction listed on the pedigree has occurred.
3. The pedigree must:
a. Include all necessary identifying information concerning each sale in the chain of
distribution of the product from the manufacturer, or the manufacturer's third-party
logistics provider, colicensed product partner, or manufacturer's exclusive
distributor, through acquisition and sale by any wholesale distributor or
repackager, until final sale to a pharmacy or other person dispensing or

administering the drug. At minimum, the necessary chain of distribution
information must include:
(1) The name, address, telephone number, and if available, the electronic mail
address, of each owner of the prescription drug, and each wholesale
distributor of the prescription drug;
(2) The name and address of each location from which the product was
shipped, if different from the owner's;
(3) The transaction dates; and
(4) A certification that each recipient has authenticated the pedigree.
b. At minimum, the pedigree must also include the:
(1) Name of the prescription drug;
(2) Dosage form and strength of the prescription drug;
(3) Size of the container;
(4) Number of containers;
(5) Lot number of the prescription drug;
(6) Name of the manufacturer of the finished dosage form; and
(7) National drug code (NDC) number.
4. Each pedigree or electronic file must be:
a. Maintained by the purchaser and the wholesale distributor for three years from
the date of sale or transfer; and
b. Available for inspection or use within five business days upon a request of an
authorized officer of the law or the board.
5. The board shall adopt rules and a form relating to the requirements of this section.
### § 43-15.3-07. Order to cease distribution.

1. The board shall issue an order requiring the appropriate person, including the
distributors or retailers of the drug, gas, or equipment to immediately cease distribution
of the drug, gas, or equipment within the state if the board finds there is a reasonable
probability:
a. A wholesale distributor, other than a manufacturer, has violated a provision in this
chapter or falsified a pedigree or sold, distributed, transferred, manufactured,
repackaged, handled, or held a counterfeit prescription drug, medical gas, or
medical equipment intended for human use;
b. The prescription drug, medical gas, or medical equipment at issue as a result of a
violation in subdivision a could cause serious, adverse health consequences or
death; and
c. Other procedures would result in unreasonable delay.
2. An order under subsection 1 must provide the individual subject to the order with an
opportunity for an informal hearing, to be held not later than ten days after the date of
the issuance of the order, on the actions required by the order. If, after providing an
opportunity for such a hearing, the board determines that inadequate grounds exist to
support the actions required by the order, the board shall vacate the order.
### § 43-15.3-08. Prohibited acts - Penalty.

1. Except as otherwise provided under section 43-15.3-09, it is a class B misdemeanor
for a person to perform or cause the performance of or aid and abet any of the
following acts in this state:
a. Failing to obtain a license under this chapter or operating without a valid license
when a license is required by this chapter.
b. If the requirements of subsection 1 of section 43-15.3-05 are applicable and are
not met, purchasing or otherwise receiving a prescription drug, medical gas, or
medical equipment from a pharmacy.
c. If a state license is required under subsection 2 of section 43-15.3-05, selling,
distributing, or transferring a prescription drug, medical gas, or medical
equipment to a person that is not authorized under the law of the jurisdiction in

which the person receives the prescription drug, medical gas, or medical
equipment to receive the prescription drug, medical gas, or medical equipment.
d. Failing to deliver prescription drugs, medical gases, or medical equipment to
specified premises, as required by subsection 3 of section 43-15.3-05.
e. Accepting payment or credit for the sale of prescription drugs, medical gases, or
medical equipment in violation of subsection 5 of section 43-15.3-05.
f. Failing to maintain or provide pedigrees as required by this chapter.
g. Failing to obtain, pass, or authenticate a pedigree, as required by this chapter.
h. Providing the board or any of the board's representatives or any federal official
with false or fraudulent records or making false or fraudulent statements
regarding any matter within the provisions of this chapter.
i. Obtaining or attempting to obtain a prescription drug, medical gas, or medical
equipment by fraud, deceit, misrepresentation, or engaging in misrepresentation
or fraud in the distribution of a prescription drug, medical gas, or medical
equipment.
j. Except for the wholesale distribution by manufacturers of a prescription drug,
medical gas, or medical equipment that has been delivered into commerce
pursuant to an application approved under federal law by the federal food and
drug administration, manufacturing, repacking, selling, transferring, delivering,
holding, or offering for sale any prescription drug, medical gas, or medical
equipment that is adulterated, misbranded, counterfeit, suspected of being
counterfeit, or has otherwise been rendered unfit for distribution.
k. Except for the wholesale distribution by a manufacturer of a prescription drug,
medical gas, or medical equipment that has been delivered into commerce under
an application approved under federal law by the federal food and drug
administration, adulterating, misbranding, or counterfeiting any prescription drug,
medical gas, or medical equipment.
l. Receiving any prescription drug, medical gas, or medical equipment that is
adulterated, misbranded, stolen, obtained by fraud or deceit, counterfeit, or
suspected of being counterfeit, and the delivery or proffered delivery of such
drug, gas, or equipment for pay or otherwise.
m. Altering, mutilating, destroying, obliterating, or removing the whole or any part of
the labeling of a prescription drug, medical gas, or medical equipment or the
commission of any other act with respect to a prescription drug, medical gas, or
medical equipment which results in the prescription drug, medical gas, or medical
equipment being misbranded.
2. The prohibited acts in subsection 1 do not include a prescription drug, medical gas, or
medical equipment manufacturer or agent of a prescription drug, medical gas, or
medical equipment manufacturer obtaining or attempting to obtain a prescription drug,
medical gas, or medical equipment for the sole purpose of testing the prescription
drug, medical gas, or medical equipment for authenticity.
3. a. For purposes of this subsection:
(1) "Contract pharmacy" means a pharmacy that has a contract with a covered
entity to receive and dispense drugs to the covered entity's patients on its
behalf.
(2) "Covered entity" means an entity participating or authorized to participate in
a federal drug discount program under 42 U.S.C. 256b.
(3) "Drug" means a drug purchased under reduced pricing under section 340B
of the federal Public Health Service Act [42 U.S.C. 201 et seq.] by a covered
entity.
b. Except as otherwise provided under section 43-15.3-09, it is a class B
misdemeanor for a manufacturer, an agent or affiliate of that manufacturer, virtual
manufacturer, or third-party logistics provider of a manufacturer's drugs, to:
(1) Directly or indirectly deny, restrict, prohibit, or otherwise interfere with the
acquisition of a drug by a contract pharmacy on behalf of a covered entity
unless receipt of the drug is prohibited by federal law.

(2) Prohibit a contract pharmacy from dispensing a drug by denying access to
the drug.
(3) Require a covered entity or contract pharmacy to submit any claims,
encounter, or utilization data as a condition for acquiring or receiving a drug,
unless the claims, encounter, or utilization data sharing is required by
federal law.
(4) Interfere with the ability of a covered entity or contract pharmacy to dispense
a drug to an eligible patient of the covered entity.
(5) Offer or otherwise make available a drug in the form of a rebate, unless in
the form of a discount at the time of sale and authorized under federal law.
c. This subsection does not apply to the limited distribution of a drug as required
under 21 U.S.C. 355-1.
### § 43-15.3-09. Penalties.

1. The board may impose the following sanctions if, after a hearing under chapter 28-32,
the board finds that a person violated section 43-15.3-08:
a. Revoke, suspend, or limit the wholesale distributor's license issued under this
chapter if the person is a wholesale distributor; or
b. Assess a civil penalty against the person. A civil penalty assessed may not
exceed ten thousand dollars per violation.
2. The board, upon a showing of a violation of this chapter, may revoke, suspend, or limit
a license issued under this chapter after a proceeding under chapter 28-32. After a
proceeding under chapter 28-32, the board may assess a civil penalty against a
licensed wholesale distributor of not more than ten thousand dollars for each
occurrence. If the licensed wholesale distributor fails to pay the civil penalty within the
time specified by the board, the board may suspend the license without additional
proceedings.
3. Upon application by the board, a court may grant an injunction, a restraining order, or
other order to enjoin a person from offering to engage or engaging in the performance
of any practices for which a permit or license is required by any applicable federal or
state law including this chapter, upon a showing that the practices were or are likely to
be performed or offered to be performed without a permit or license. An action brought
under this subsection must be commenced either in the county where the conduct
occurred or is likely to occur or in the county in the state where the defendant resides.
An action brought under this subsection is in addition to any other penalty provided by
law and may be brought concurrently with other actions to enforce this chapter.
4. A person that knowingly purchases or receives a prescription drug, medical gas, or
medical equipment through any source other than a person licensed under this
chapter, including a wholesale distributor, manufacturer, pharmacy distributor, or
pharmacy commits a class A misdemeanor. A subsequent unrelated violation of this
subsection is a class C felony.
5. A person that knowingly fails to provide a duly authorized individual the right of entry
as provided in subsection 5 of section 43-15.3-04 is guilty of a class A misdemeanor
for the first conviction and a class C felony for each subsequent conviction.
6. A person that knowingly or intentionally engages in the wholesale distribution of a
prescription drug, medical gas, or medical equipment without a license issued under
this chapter commits a class C felony. A person is guilty of a class C felony if that
person engages in the wholesale distribution of a prescription drug and with intent to
defraud or deceive fails to obtain or deliver to another person a complete and accurate
required pedigree concerning a prescription drug before obtaining the prescription
drug from another person or transferring the prescription drug to another person or
falsely swears or certifies that the person has authenticated any documents to the
wholesale distribution of prescription drugs.
7. A person is guilty of a class C felony if that person engages in the wholesale
distribution of a prescription drug, medical gas, or medical equipment and knowingly or
intentionally:

a. Destroys, alters, conceals, or fails to maintain a complete and accurate required
pedigree concerning a prescription drug in the person's possession;
b. Purchases or receives prescription drugs, medical gases, or medical equipment
from a person not authorized to distribute prescription drugs, medical gases, or
medical equipment in wholesale distribution;
c. Sells, barters, brokers, or transfers a prescription drug, medical gas, or medical
equipment to a person not authorized to purchase the prescription drug, medical
gas, or medical equipment in the jurisdiction in which the person receives the
prescription drug, medical gas, or medical equipment in a wholesale distribution;
d. Forges, counterfeits, or falsely creates a pedigree;
e. Falsely represents a factual matter contained in a pedigree; or
f. Fails to record material information required to be recorded in a pedigree.
8. A person is guilty of a class C felony if that person engages in the wholesale
distribution of a prescription drug and possesses a required pedigree concerning a
prescription drug, knowingly or intentionally fails to authenticate the matters contained
in the pedigree as required, and distributes or attempts to further distribute the
prescription drug.
### § 43-15.3-10. Retail medical gas retailers - Reciprocity.

1. A person may not sell or deliver medical gases and related medical equipment directly
to a consumer unless licensed by the board as a retail medical gas retailer.
a. As a term of licensure under this section, a licensee shall employ or contract with
an in-state licensed respiratory therapist or other health care professional
authorized by that professional's practice act to prescribe or administer the
medical gases and related medical equipment. The applicant shall furnish on the
application the name and license number of the individual or licensee the
applicant employees or with which the applicant contracts. Within thirty days of a
change, a retailer shall provide the board with notice of any change in the
licensee.
b. A retail medical gas retailer may sell or deliver to a patient's home medical gases
and related equipment in accordance with a practitioner's prescription or drug
order. The retail medical gas retailer shall keep the original drug order or an
electronic copy of each drug order at the licensed location or must have available
for inspection an electronic copy of the original drug order or electronic copy of
the drug order. A prescription or drug order is not valid after one year, except a
prescription or order for maintenance equipment may be perpetual. A retail
medical gas retailer shall maintain a prescription or drug order for five years.
2. An out-of-state retail medical gas retailer or a principal or agent of the retailer may not
conduct business in this state unless the retailer is licensed by the board as a retail
medical gas retailer, paid the fee required by the board, and is registered with the
secretary of state. An applicant shall submit an application for a license on a form
furnished by the board and the application must be accompanied by a copy of the
certificate of authority from the secretary of state. The issuance of a license under this
section does not change or affect tax liability imposed by this state on an out-of-state
medical gas retailer.
3. The board may adopt rules that permit an out-of-state retail medical gas retailer to
obtain a license on the basis of reciprocity if the retailer possesses a valid license
granted by another jurisdiction and the legal standards for licensure in the other
jurisdiction are comparable to the standards under this chapter and if the other
jurisdiction extends reciprocity to retail medical gas retailers licensed in this state.
However, if the requirements for licensure under this chapter are more restrictive than
the standards of the other jurisdiction, the out-of-state retail medical gas retailer shall
comply with the additional requirements of this chapter to obtain a license under this
chapter.

### § 43-15.3-11. Retail durable medical equipment retailers - Reciprocity.

1. A person may not sell or deliver durable medical equipment directly to a consumer
unless licensed by the board as a retail durable medical equipment retailer.
a. As a term of licensure under this section, a licensee shall employ or contract with
an in-state licensed health care professional authorized by that professional's
practice act to prescribe or administer the durable medical equipment. For
purposes of this section, a licensed health care professional may include a
respiratory therapist, physical therapist, pharmacist, registered nurse, licensed
practical nurse, advanced practice registered nurse, physician assistant, and
occupational therapist.
(1) The licensed health care professional must be on staff to oversee and
provide custom orthotics and prosthetics. The board shall establish
certification requirements for a qualified health care professional which may
include certification through the American board for certification in orthotics
and prosthetics or the board for certification in orthotics as a certified
orthotist, certified prosthetist, certified prosthetist orthotist, certified orthotic
fitter, certified mastectomy fitter, or certified pedorthist.
(2) The licensed health care professional must be on staff to oversee and
provide complex rehabilitation products and services for seating and mobility
systems. The board shall establish certification requirements for a qualified
health care professional which may include certification through the
rehabilitation engineering and assistive technology society of North America
as an assistive technology professional.
(3) The applicant shall furnish on the application the name and license number
of the individual the licensee employs or with which the applicant contracts.
Within thirty days of a change, the licensee shall provide the board with
notice of any change in the licensee.
b. A durable medical equipment retailer may sell or deliver to a patient's home
durable medical-related equipment in accordance with a practitioner's prescription
or drug order. The retail durable medical equipment retailer shall keep the original
prescription or order or an electronic copy at the licensed location or must have
available for inspection an electronic copy of the original order or electronic copy
of the order. A prescription or order is not valid after one year, except a
prescription or order for repair, maintenance, or replacement of equipment and
items designated as thirteen month capped rental items by the center of Medicare
and Medicaid services may be perpetual. A retail durable medical equipment
retailer shall maintain a prescription or order for five years. A durable medical
equipment retailer may only obtain medical equipment from a manufacturer or
wholesaler that is duly licensed by the state.
2. An out-of-state retail durable medical equipment retailer or a principal or agent of the
retailer may not conduct business in this state unless the retailer is licensed by the
board as a retail durable medical equipment retailer, paid the fee required by the
board, and is registered with the secretary of state. An applicant shall submit an
application for a license on a form furnished by the board and the applicant must be
accompanied by a copy of the certificate of authority from the secretary of state. The
issuance of a license under this section does not change or affect tax liability imposed
by this state on an out-of-state retail durable medical equipment retailer.
3. The board may adopt rules that permit an out-of-state retail durable medical
equipment retailer to obtain a license on the basis of reciprocity if the retailer
possesses a valid license granted by another jurisdiction and the legal standards for
licensure in the other jurisdiction are comparable to the standards under this chapter
and if the other jurisdiction extends reciprocity to retail durable medical equipment
retailers licensed in this state. However, if the requirements for licensure under this
chapter are more restrictive than the standards of the other jurisdiction, the out-of-state
retail durable medical equipment retailer shall comply with the additional requirements
of this chapter to obtain a license under this chapter.

### § 43-15.3-12. Fees.

The board shall charge and collect the following fees under this chapter:
Chain drug warehouse $200
Chain pharmacy warehouse $200
Durable medical equipment distributor, medical gas distributor, or both $200
Durable medical equipment retailer, medical gas retailer and distributor, or both $300
Hospital offsite warehouse $200
Jobber or broker Not to exceed $1,000
Manufacturer Not to exceed $1,000
Medical gas retailer, durable medical equipment retailer, or both $200
Medical gas durable medical equipment distributor and retailer $300
Outsourcing facility $200
Own label distributor Not to exceed $1,000
Pharmacy distributor $200
Private label distributor Not to exceed $1,000
Repackager Not to exceed $1,000
Reverse distributor $200
Third-party logistic provider Not to exceed $1,000
Veterinary-only distributor $200
Virtual manufacturer $400
Virtual wholesaler or distributor Not to exceed $1,000
Wholesaler or distributor Not to exceed $1,000
### § 43-15.3-13. Compounding provided by an outsourcing facility.

1. A facility may provide, without a patient specific prescription, a nonpatient specific
compounded drug preparation for human use only, if the following conditions apply:
a. The entity is registered with the United States food and drug administration as an
outsourcing facility pursuant to section 503(b) of the Federal Food, Drug, and
Cosmetic Act [21 U.S.C. 353(b)]; and
b. The entity is licensed under this chapter with an outsourcing facility classification,
has designated a licensed pharmacist in the state of residence as the responsible
person on the license, and the facility meets the standards for licensure set in this
chapter.
2. Within forty-eight hours of a request from the board, the facility shall make available to
the board any inspection reports, federal food and drug administration reports of
objectionable conditions issued against the facility, and lists of distribution of products
to the state.
3. The facility shall comply with all labeling and recordkeeping requirements pursuant to
section 503(b) of the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 353(b)].
4. Notwithstanding contrary provisions of this chapter, an outsourcing facility may
compound and sell in the state a compounded calcium gluconate product intended for
the emergency treatment of hydrofluoric acid exposure without obtaining a license
under this chapter.
### § 43-15.3-14. Third-party logistics providers.

1. Each third-party logistics provider shall comply with the standards for licensure;
requirements to distribute prescription drugs, medical gases, or medical equipment;
restrictions on transactions; and pedigree requirements set forward in this chapter.
2. The board shall issue a separate license to each qualified third-party logistics provider
applying for licensure.
