Licensure


Qualifying Wholesale Distributor shall provide information to verify that:

1. The Wholesale Distributor that provides services within a State, whether the Wholesale Distributor is located within the State or outside of the State, is licensed or registered in good standing, or eligible to become licensed or registered, to engage in wholesale drug distribution in all applicable jurisdictions.
2. The Wholesale Distributor complies with all applicable statutes and regulations governing wholesale distribution where licensed or registered, and complies with the more stringent law or regulation as determined by conflicts of law rules.
3. If the Wholesale Distributor is involved in the Distribution of controlled substances, including product that has been identified as a precursor to the manufacture or compounding of methamphetamines, it is duly registered with United States Drug Enforcement Administration (DEA) and the appropriate state controlled substance agency and in compliance with all applicable laws and rules for the storage, handling, reporting, transport, shipment, and Distribution of controlled substances and such precursor products.
4. The Wholesale Distributor maintains sufficient liability insurance coverage and secured monetary funds to ensure payment in the event damages, fines, costs, and the like are assessed against Wholesale Distributor.
5. The Wholesale Distributor has a Person to serve as the Designated Representative for the Wholesale Distributor facility who is actively involved in and aware of the actual daily operation of the Wholesale Distributor that engages in the Distribution of Drugs and Devices and, if required, shall be licensed or registered with the board of pharmacy or appropriate state regulatory agency.

Facility

Qualifying Wholesale Distributor shall provide information to verify that:

1. The facility at which Drugs and Devices are received, stored, warehoused, handled, held, offered, marketed, displayed, or transported from shall:

   
   a. Be of suitable construction to ensure that all Drugs and Devices in the facility are maintained in accordance with Labeling of such Drugs and Devices, or in compliance with official compendium standards such as the United States Pharmacopeia – National Formulary (USP-NF);

   b. Be of suitable size and construction to facilitate cleaning, maintenance, and proper Wholesale Distribution operations;

   c. Have adequate storage areas to provide adequate lighting, ventilation, temperature, sanitation, humidity, space, equipment, and security conditions:

   i. All Drugs and Devices shall be stored at appropriate temperatures and under appropriate conditions in accordance with requirements, if any, in the Labeling of such Drugs and Devices, or in accordance with requirements in the current edition of an official compendium such as the USP-NF;

   ii. If no storage requirements are established for a Drug, the Drug may be held at “controlled” room temperature, as defined in an official compendium such as USP-NF, to help ensure that its identity, strength, quality, and purity are not adversely affected; and

   iii. Appropriate manual, electromechanical, or electronic temperature and humidity recording equipment and/or logs shall be utilized to document proper storage of Drugs and Devices;

   d. Have a quarantine area for storage of Drugs and Devices that are outdated, damaged, deteriorated, Misbranded, or Adulterated, Counterfeit, or suspected of being Counterfeit, otherwise unfit for Distribution, or that are in immediate or sealed secondary containers that have been opened;

   e. Be maintained in a clean and orderly condition;

   f. Be free from infestation of any kind; and
   
   g. Not be a personal residence.

2. Appropriate inventory controls are maintained in order to detect and document any theft, Counterfeiting, or diversion of Drugs or Devices.
3. Controlled substance Drugs are isolated from non-controlled substance Drugs and stored in a secure area in accordance with DEA security requirements and standards.
4. Adequate security for the facility has been provided for:

   
   a. All facilities used for Wholesale Drug Distribution shall be secure from unauthorized entry;

   b. Access from outside the premises shall be kept to a minimum and be well controlled;

   c. The outside perimeter of the premises shall be well lighted;

   d. Entry into areas where Drugs or Devices are held shall be limited to authorized personnel;

   e. All facilities shall be equipped with an alarm system to detect entry after hours; and

   f. All facilities shall be equipped with a security system that will provide suitable protection against theft and diversion. When appropriate, the security system shall provide protection against theft or diversion that is facilitated or hidden by tampering with computers or electronic records.
   
   g. Verifying that all persons or entities who undertake, whether directly or by any other arrangement, to transport prescription drugs and devices for compensation, hereafter referred to as “common carriers”, used by the Wholesale Distributor ensures security via a verifiable security system.

Personnel

Qualifying Wholesale Distributor shall provide information to verify that:

1. The Wholesale Distributor’s Designated Representative has not been enjoined, disciplined, fined, punished, or the like for violating any federal or state laws regulating prescription Drugs or Devices.
2. The Wholesale Distributor’s Designated Representative has not been found guilty, pled guilty, or pled nolo contendere to any criminal offense.
3. The Wholesale Distributor’s Designated Representative has a sound financial history.
4. The Wholesale Distributor’s Designated Representative:

   
   a. Has a minimum of two years of verifiable full-time managerial or supervisory experience in a Pharmacy or Wholesale Distributor where the Designated Representative’s responsibilities included but were not limited to record keeping, storage, and shipment of Drugs or Devices;

   b. Serves as the Designated Representative for only one Wholesale Distributor at any one time;

   c. Is actively involved in and aware of the actual daily operations of the Wholesale Distributor;

   d. Is employed full-time in a managerial position by the Wholesale Distributor;

   e. Is physically present at the Wholesale Distributor during normal business hours, except for time periods when absent due to illness, family illness or death, scheduled vacation, or other authorized absence; and
   
   f. Is aware of, and knowledgeable about, all policies and procedures pertaining to the operations of the Wholesale Distributor.

5. Additional key personnel engaged in the operation and handling of Drugs or Devices who are employed by the Wholesale Distributor have met the following qualifications:

   
   a. Appropriate criminal background checks; and
   
   b. Appropriate education and experience necessary to safely and lawfully engage in the Wholesale Distribution of Drugs.

6. The Wholesale Distributor maintains and enforces policies and procedures requiring documentation of responsible persons and persons in charge, including such persons’ titles, duties, and qualifications.
7. The Wholesale Distributor maintains and enforces policies and procedures that ensure suitable background checks are conducted and documented on the owner(s) and/or chief executive officer and key personnel, management, and officers who actively engage in or supervise the operation and handling of Drugs or Devices, prior to their association, employment, or contracting and regularly thereafter.
8. Qualifying Wholesale Distributors shall provide information to verify that, prior to the initial wholesale distribution or acquisition of prescription drugs to or from any Wholesale Distributor, the distributing or acquiring Wholesale Distributor requires all Common Carriers contracted with or utilized by the Wholesale Distributor to require its employees whose responsibilities include the handling of prescription drugs to undergo criminal background checks, initial and random toxicology screening, and security training.

Record Keeping


Qualifying Wholesale Distributor shall provide information to verify that:

1. The Wholesale Distributor is establishing and maintaining inventories and records of all transactions regarding the receipt and Distribution or other disposition of all Drugs and Devices. These records shall include:

   
   a. Pedigrees for Drugs distributed that are included on the National Specified List of Susceptible Products, if Wholesale Distributor is an Authorized Distributor;

   b. Pedigrees for all Drugs that are distributed, if Wholesale Distributor is not an Authorized Distributor; and
   
   c. Appropriate information and data to identify the source of the product and type of product being received or distributed.

2. Inventories and records shall be made available for inspection and photocopying by any authorized official of any state, federal, or local government agency for a period of three (3) years following their creation date, or as otherwise required by law.
3. A Pedigree is provided for the Wholesale Distribution of Drugs at the time of the transaction to another Wholesale Distributor, unless otherwise required by law.
4. Records described in this section are kept at the inspection site and readily available for inspection during the retention period. Records kept at a central location must be available for inspection within two working days of a request.
5. An ongoing list of Persons with whom the Wholesale Distributor conducts business is maintained.
6. The Wholesale Distributor is establishing and maintaining a system for the mandatory reporting of prescription drug and devices shortages or losses that exceeds a reasonable level established by like persons to the board of pharmacy or appropriate state regulatory agency and Food and Drug Administration (FDA) where it is known or suspected that diversion is occurring.
7. Drug and Device records, data, and documents are securely stored and access is restricted, and that policies and procedures have been implemented to protect the integrity of such records, data, and documents.

Authentication and Verification


Qualifying Wholesale Distributor shall maintain and enforce policies and procedures that:

1. Assure the integrity, legitimacy, and authenticity of prescription Drug and Device purchase orders and/or requests.
2. Assure the regular verification of the identity, legitimacy, and proper operation of entities seeking to sell or purchase prescription Drug and Device products.
3. Assure For Cause Authentications are conducted when the VAWD-accredited Wholesale Distributor that purchases Drugs or Devices from another Wholesale Distributor has reason to believe, based on the totality of the facts and circumstances, that any Drug or Device purchased from the Wholesale Distributor is Counterfeit, suspected of being Counterfeit, Misbranded, or Adulterated. Examining factors shall include but are not limited to:

   
   a. Date of purchase;

   b. Lot number;

   c. Sales invoice number; and
   
   d. Contact information including name, address, telephone number, and e-mail address (if available) for the Wholesale Distributor that sold the Drug or Device for which Distribution is being Authenticated.

4. Assure that upon receipt, each shipping container shall be visually examined for identity and to determine if it may contain contaminated, Contraband, Counterfeit, suspected of being Counterfeit, or damaged Drugs or Devices, or Drugs or Devices that are otherwise unfit for Distribution. This examination shall be adequate to reveal container damage that would suggest possible contamination, Adulteration, Misbranding, Counterfeiting, suspicion of being Counterfeit, or other damage to the contents.
5. Assure that the Drugs or Devices found to be unacceptable under these criteria are quarantined from the rest of stock until it is determined that the Drugs and Devices are not outdated, damaged, deteriorated, Misbranded, Counterfeited, or Adulterated and they are further determined to be fit for human use.
6. Assure that each outgoing shipment shall be carefully inspected for identity of the Drugs or Devices and to ensure that there is no Delivery of Drugs or Devices that have been damaged in storage or held under improper conditions.

Returned, Damaged, and Outdated Drugs

Qualifying Wholesale Distributor shall maintain and enforce policies and procedures that:

1. Assure that any Drug or Device that is outdated, damaged, deteriorated, Misbranded, Counterfeited, suspected of being Counterfeited, Adulterated, or otherwise deemed unfit for human use shall be quarantined and physically separated from other Drugs and Devices until it is returned to either the Manufacturer or Wholesale Distributor from which it was acquired.
2. Assure that when Drugs and Devices are Adulterated, Misbranded, Counterfeited, or suspected of being Counterfeit, notice of the Adulteration, Misbranding, Counterfeiting, or suspected Counterfeiting shall be provided to the board of pharmacy or appropriate state regulatory agency, FDA, and the Manufacturer or Wholesale Distributor from which they were acquired within three (3) business days. Any Drug or Device returned to a Manufacturer or Wholesale Distributor shall be kept under proper conditions during storage, handling, transport, and shipment, and documentation showing that proper conditions were maintained shall be provided to the Manufacturer or Wholesale Distributor to which the Drugs are returned.
3. Assure that when any Drug or Device whose immediate or sealed outer or secondary containers or Labeling are Adulterated, Misbranded, Counterfeited, or suspected of being Counterfeit, it shall be quarantined and physically separated from other Drugs or Devices until it is returned to either the Manufacturer or Wholesale Distributor from which it was acquired or destroyed. When the immediate or sealed outer or secondary containers or Labeling of any Drug or Device are Adulterated, Misbranded, Counterfeited, or suspected of being Counterfeit, notice of the Adulteration, Misbranding, Counterfeiting, or suspected Counterfeiting shall be provided to the board of pharmacy or appropriate state regulatory agency, FDA, and the Manufacturer or Wholesale Distributor from which it was acquired within three (3) business days.
4. Assure that when any Drug or Device that has been opened or used, but is not Adulterated, Misbranded, Counterfeited, or suspected of being Counterfeit, it shall be identified as such, and shall be quarantined and physically separated from other Drugs or Devices until it is returned to the Manufacturer or Wholesale Distributor from which acquired or it is destroyed.
5. Assure that if the conditions under which a Drug or Device has been returned cast doubt on the Drug’s or Device’s safety, identity, strength, quality, or purity, then the Drug or Device shall be destroyed, or returned to the supplier, unless examination, testing, or other investigation proves that the Drug or Device meets appropriate standards of safety, identity, strength, quality, and purity. In determining whether the conditions under which a Drug or Device has been returned cast doubt on the Drug’s or Device’s safety, identity, strength, quality, or purity, the Wholesale Drug Distributor shall consider, among other things, the conditions under which the Drug or Device has been held, stored, or shipped before or during its return and the condition of the Drug and its container, carton, or Labeling as a result of storage or shipping.

Policies and Procedures


Qualifying Wholesale Distributor shall maintain, enforce, and adhere to written policies and procedures, which shall be followed for:

1. The receipt, security, storage, inventory, transport, and shipping and Distribution of Drugs, including policies and procedures for identifying, recording, and reporting losses or thefts, for correcting all errors and inaccuracies in inventories, and for ensuring the oldest approved stock of a prescription Drug product is distributed first.
2. Wholesale Distributors shall include in their written policies and procedures the following:

   
   a. A procedure to be followed for handling recalls and written withdrawals of Drugs and Devices.

   b. Any volunteer action by the Manufacturer to remove defective or potentially defective Drugs or Devices from the market; or
   
   c. Any action undertaken to promote public health and safety by the replacement of existing merchandise with an improved product or new package design.

3. To prepare for, protect against, and handle any crisis that affects the security or operation of any facility in the event of a strike, fire, flood, or other natural disaster, or other situations of local, state, or national emergency.
4. To ensure that any outdated Drugs shall be segregated from other Drugs and either returned to the Manufacturer or destroyed in accordance with federal and state 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.
5. A procedure for disposing of and destroying containers, Labels, and packaging to ensure that the containers, Labels, and packaging cannot be used in Counterfeiting activities including all necessary documentation, maintained for a minimum of three (3) years, and the appropriate witnessing of the destruction of any Labels, packaging, Immediate Containers, or containers in accordance with all applicable federal and state requirements.
6. A procedure for investigating discrepancies involving Counterfeit, suspected of being Counterfeit, Contraband, or suspected of being Contraband product in the inventory and reporting such discrepancies within three (3) business days to the board of pharmacy or appropriate state regulatory agency and appropriate federal agency.
7. A procedure for reporting criminal or suspected criminal activities involving the inventory of Drug(s) and Device(s) to the board of pharmacy or appropriate state regulatory agency and appropriate federal agency within three (3) business days.
8. A procedure for verifying security provisions of Common Carriers.

History of Criteria Revisions

August 2006: VAWD Criteria updated to reflect amendments to the NABP Model Rules for the Licensure of Wholesale Distributors.

April 2009: VAWD Criteria updated to reflect amendments to the NABP Model Rules for the Licensure of Wholesale Distributors, addressing use of Common Carriers.