Relates to applicant registration for wholesalers or manufacturers of prescription drugs and unlawful transactions by manufacturers and wholesalers.

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S5286-2011 Actions

• Feb 27, 2012: PRINT NUMBER 5286A
• Feb 27, 2012: AMEND AND RECOMMIT TO HIGHER EDUCATION
• Jan 4, 2012: REFERRED TO HIGHER EDUCATION
• May 3, 2011: REFERRED TO HIGHER EDUCATION

S5286-2011 Memo

BILL NUMBER:S5286

TITLE OF BILL:
An act to amend the education law, in relation to wholesalers and
manufacturers of prescription drugs

PURPOSE:
To strengthen the requirements for
registration as a wholesaler or manufacturer and to provide penalties
for selling or distributing counterfeit drugs.

SUMMARY OF PROVISIONS:
Section one amends
subparagraph 2 of paragraph a of subdivision 4 of section 6808 of the
education law, as amended by chapter 62 of the laws of 1989, by
increasing the application fee that shall accompany the registration for
a wholesaler or manufacturer to one thousand two hundred dollars from
the current eight hundred twenty-five dollars.

Section two amends paragraphs b and d of subdivision 4 of section 6808
of the education law, paragraph b as amended by chapter 538 of the laws
of 2001 and paragraph d as amended by chapter 62 of the laws of 1989.
Paragraph b is amended by providing that the triennial registration fee
that is paid by wholesalers and manufacturers shall be increased to
eight hundred dollars, from five hundred twenty dollars, or a pro rated
portion as determined by the department of education. Paragraph d
provides that in the event that the location of a business changes, the
fee for inspection and endorsement shall be increased to three hundred
dollars from the current one hundred seventy dollars.

Section three amends subdivision 4 of section 6808 of the education law
by adding six new paragraphs e, f, g, h, i and j. Paragraph e provides
that any applicant for registration as a wholesaler or manufacturer
shall be of good moral character, as determined by the department of
education. Such requirements shall extend to all persons responsible for
the distribution of a prescription drug for the applicant as determined
by the department. Paragraph f provides that upon receipt of an
application for registration, the commissioner shall initiate a criminal
history records search of any of the persons identified in paragraph e.
Prior to conducting the criminal history records search and
fingerprinting process, the commissioner shall obtain the applicant's
consent to the criminal history records search. The commissioner shall
obtain two sets of fingerprints from each applicant and any fees
necessary to process such fingerprints. The commissioner shall promptly
transmit the fingerprints to the division of criminal justice services
which shall submit the fingerprints to the federal bureau of
investigation for a. national criminal history record check. Such
criminal history record will be considered. for the purpose of
establishing good moral character. "Criminal history record" is defined.
All such criminal history records shall be confidential. The
commissioner is authorized to charge the applicant additional fees for
the criminal history record search. Paragraph g provides additional
duties of the commissioner and the department, such as promulgating a
form to be provided to all applicants for registration purposes. The
department shall obtain the signed, informed consent of each individual
identified in this section of the applicant with regard to obtaining and


reviewing such individual's criminal history information. Specifics of
such consent form are outlined. Paragraph h provides that every
wholesaler shall submit a performance or surety bond of not less than
one hundred thousand dollars to the department to ensure compliance with
the provisions of this article. The department may waive such bond for
certain not-for-profit entities or certain other wholesalers. Paragraph
i provides that the department may promulgate rules and regulations to
exempt from the requirements of paragraphs e, f, g and h a wholesaler
that has received accreditation from a nationally recognized
accreditation body approved by the commissioner and that meets the
licensing standards under this subdivision. Paragraph j provides that
the commissioner shall exempt certain manufacturers from the
requirements of paragraphs e, f, g and h in the event that such
requirements are not required by federal law or regulation, unless the
commissioner determines that such requirements are necessary to prevent
a risk to prescription drug distribution in the state.

Section four amends the education law by adding a new section 6810-a
that provides certain acts which shall be considered unlawful if
committed by a manufacturer, wholesaler or other person: intentionally
packaging, selling, transferring, distributing or delivering any
prescription drug that he or she knows to be adulterated, misbranded,
counterfeit or has been rendered unfit for distribution; and
intentionally packaging, selling, transferring, distributing or
delivering a prescription drug to any wholesaler who is not licensed or
registered pursuant to this article. Section four further provides that
it shall be a class D felony for any person who violates this section.
Additionally, any drug packaged, sold, transferred, distributed or
delivered in violation of this section shall be contraband and subject
to seizure by the board of pharmacy, the department of health or any law
enforcement officer of this state.

Section five amends section 6824 of the education law, as added by
chapter 987 of the laws of 1971, by adding a violation of any provision
of section sixty-eight hundred ten-a of this article to the list of
violations for which the secretary is authorized to apply to a court for
an injunction.

Section six provides the effective date.

JUSTIFICATION:
The marketing of counterfeit drugs has
become prevalent throughout the United States as well as around the
world. The World Health Organization (WHO) estimates that counterfeit
drugs make up 10% of all drugs sold worldwide, with the percentage much
higher in developing countries. January 2009 Report by the American
Council on Science and Health, "Counterfeit Drugs: Coming to a Pharmacy
Near You with an Update for 2009" (ACSH 2009 Report). According to the
National Association of Boards of Pharmacy (NABP), counterfeit drug
sales accounted for $75 billion in global sales in 2010, with an
estimated 1 to 2 percent of drugs in North America being counterfeit.
Moreover, counterfeit drugs have contributed to the increasing drug
resistance of the most deadly infectious diseases such as HIV/AIDS,
tuberculosis and malaria.

Despite the view that the U.S. drug supply is among the most secure in
the world, the growing size and sophistication of counterfeit, drug


rings have allowed them to penetrate the legitimate drug supplies of the
United States. In the last five years, counterfeit drug investigations
by the Office of Criminal Investigations of the Food and Drug
Administration (FDA) increased almost ten-fold, from 6 in 2000 to 59 in
2004.

If we accept the NABP's estimate that 1-2% of drugs sold in North
America are counterfeit (compared to a WHO estimate of 5% to 7% in the
United States), the odds are, conservatively, 1 in 100 that the drug a
consumer receives at a pharmacy in the U.S. is counterfeit and that out
of the approximately 3.7 billion prescriptions filled in the U.S. this
year, as many as 37 million may have been filled with counterfeit
versions. There is, however, no way to know the true degree to which
counterfeit drugs have contaminated our drug supply. Most of the
incidents go undetected since the evidence is usually destroyed when the
drug is consumed and the results of taking the counterfeit drug are
blamed on other causes, such as incorrect diagnosis, or in the case of
HIV/AIDS further complications and death are expected. Recently, two
highly publicized examples of counterfeit drugs come to mind: Lipitor
tablets used to lower cholesterol, where in 2005 in New York State
alone, New Yorkers received an estimated 100,000 dosage units of
counterfeit Lipitor; and Procrit, an injectable drug used to stimulate
red blood cell growth to treat severe anemia and anemia related to
treatment for HIV/AIDS. There have been cases of counterfeits of other
well-known brands as well as drugs used to. treat critically-ill
patients in the U.S. in the last few years to hundreds of thousands of
unwitting patients, including:

* Combivir, used to prolong the life of HIV/AIDS patients by preventing
the virus from reproducing--replaced with another HIV medication that
can cause fatal allergic reactions

* Serostim, a human growth hormone used to prevent HIV/AIDS patients
from wasting-replaced with dangerous levels of a fertility drug

* Celebrex, used to treat arthritis--replaced with vitamins

* Viagra, used to treat impotence--over 700,000 counterfeit pills were
manufactured

* Zyprexa, used to help prevent hallucinations and delusions in
schizophrenic and bipolar patients--replaced with aspirin

* Neupogen, an injectable used to boost the immune system of cancer
patients-replaced with saline

ACSH 2009 Report. In addition; there have been multiple incidents
involving counterfeit versions of Tamiflu, used to treat seasonal or
avian flu. Aside from the obvious direct result of receiving the
counterfeit medicine, treatment from counterfeit versions may also
increase the risk of causing the virus to develop a resistance to the
Tamiflu drug.

The nature of the drug supply system in the U.S. makes our drugs ripe
for diversion and counterfeiting. The path of a drug from manufacturer
to distributor to pharmacy more often than not is not a single or linear


one; in fact, a substantial portion of our drugs flow through a complex
network of distributors, intermediaries and secondary wholesalers.

Recognizing the need to assure the safe and effective distribution of
prescription drugs, Congress enacted more than 20 years ago the
Prescription Drug Manufacturing Act (PDMA) which, among other things,
imposed a requirement on wholesale distributors to maintain either a
paper or electronic pedigree of prescription drugs. Pending development
of appropriate technology to facilitate the establishment of an
electronic pedigree for prescription drugs, and thereby allow us to
track and trade prescription drugs through the supply chain, the FDA has
stated that all levels of government, in addition to the private sector,
should take responsibility for ensuring the safety and security of the
U.S. drug distribution system. Counterfeit Drug Task Report February
2004 Update, 2009. At the State level, the Update noted that it would be
beneficial for states to strengthen their provisions governing wholesale
distribution. The Update further reported that the FDA planned to pursue
increased criminal penalties for counterfeiting in the United States
Sentencing Commissions sentencing guidelines. To date, thirty six states
have strengthened licensure requirements of wholesalers through
legislation and/or regulations.

To better secure the drug supply system pending implementation of
federal law, we must adopt at the state level a multi-layered strategy
that combines strengthening the licensing requirements of wholesalers
and increasing penalties for those who violate the law so that our
regulatory and enforcement agencies have the authority to carry out the
law. Ensuring that all persons and entities involved in the wholesale
distribution of drug products meet stringent licensing criteria and
maintain high ethical and business standards is critical.

This bill toughens the licensing requirements of manufacturers and
wholesalers by, among other things, carrying out criminal background
checks of responsible individuals and requiring significant surety
bonds, decreasing the likelihood that corrupt, "fly-by-night" operations
will be able to infiltrate the supply chain and adulterate or taint the
prescription drugs.

Without enacting legislation at the state level to address the
weaknesses inherent in our drug supply system, we will continue to leave
the public vulnerable to individuals who are willing to harm, and even
kill, people for profit.

LEGISLATIVE HISTORY:
Similar to A.6546-A, 2009 and
2010 referred to higher education. Similar to A.7810-C, 2007 and 2008
referred to higher education. Same as S.5290-C, 2007 and 2008 referred
to health. Similar to A.2957-A, 2005 and 2006 referred to higher
education. Same as S.3278-A, 2005 passed senate and 2006 referred to
higher education.

FISCAL. IMPLICATIONS:
None to the state.

EFFECTIVE DATE:
This act shall take effect on the one
hundred and eightieth day after it shall have become law.

S5286-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    5286

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 May 3, 2011
                                 ___________

  Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
    printed to be committed to the Committee on Higher Education

  AN ACT to amend the  education  law,  in  relation  to  wholesalers  and
    manufacturers of prescription drugs

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1.  Subparagraph 2 of paragraph a of subdivision 4 of  section
  6808 of the education law, as amended by chapter 62 of the laws of 1989,
  is amended to read as follows:

    (2)  The  application  shall be accompanied by a fee of [eight hundred
  twenty-five] TWELVE HUNDRED dollars.
    S 2. Paragraphs b and d of subdivision 4 of section 6808 of the educa-
  tion law, paragraph b as amended by chapter 538 of the laws of 2001  and
  paragraph d as amended by chapter 62 of the laws of 1989, are amended to
  read as follows:

    b. Renewal of registration. All wholesalers' and manufacturers' regis-
  trations  shall be renewed on dates set by the department. The triennial
  registration fee shall be [five hundred twenty] EIGHT HUNDRED dollars or
  a pro rated portion thereof as determined by the department.
    d. Change of location. In the event that the location of such place of
  business shall be changed, the owner shall apply to the  department  for
  inspection  of  the new location and endorsement of the registration for
  the new location. The fee for inspection and endorsement shall  be  [one
  hundred  seventy] THREE HUNDRED dollars, unless it appears to the satis-
  faction of the department that the change in location is of a  temporary
  nature due to fire, flood or other disaster.
    S  3. Subdivision 4 of section 6808 of the education law is amended by
  adding six new paragraphs e, f, g, h, i and j to read as follows:

    E. APPLICANT REGISTRATION. ANY APPLICANT FOR REGISTRATION AS A  WHOLE-
  SALER OR MANUFACTURER SHALL BE OF GOOD MORAL CHARACTER, AS DETERMINED BY
  THE  DEPARTMENT.  THE REQUIREMENTS SHALL EXTEND TO ALL PERSONS RESPONSI-

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD06282-01-1

 S. 5286                             2

  BLE FOR THE DISTRIBUTION OF A PRESCRIPTION DRUG FOR  THE  APPLICANT,  AS
  DETERMINED  BY THE DEPARTMENT. SUBJECT TO THE PROVISIONS OF PARAGRAPHS F
  AND G OF THIS SUBDIVISION, THE  DEPARTMENT  SHALL  REQUIRE  PHOTOGRAPHS,
  CRIMINAL HISTORY RECORDS SEARCH AND FINGERPRINTS.
    F. CRIMINAL HISTORY RECORDS SEARCH. (1) UPON RECEIPT OF AN APPLICATION
  FOR  REGISTRATION  PURSUANT TO THIS SUBDIVISION, THE COMMISSIONER SHALL,
  SUBJECT TO THE RULES AND REGULATIONS OF THE DIVISION OF CRIMINAL JUSTICE
  SERVICES, INITIATE A CRIMINAL HISTORY  RECORDS  SEARCH  OF  THE  PERSONS
  IDENTIFIED  IN PARAGRAPH E OF THIS SUBDIVISION.  PRIOR TO INITIATING THE
  BACKGROUND CHECKS AND FINGERPRINTING  PROCESS,  THE  COMMISSIONER  SHALL
  FURNISH  THE  APPLICANT  WITH  THE FORM DESCRIBED IN PARAGRAPH G OF THIS
  SUBDIVISION AND SHALL OBTAIN THE APPLICANT'S   CONSENT TO  THE  CRIMINAL
  HISTORY  RECORDS  SEARCH. THE COMMISSIONER SHALL OBTAIN FROM EACH APPLI-
  CANT  TWO SETS OF FINGERPRINTS AND  THE  DIVISION  OF  CRIMINAL  JUSTICE
  SERVICES  PROCESSING  FEE  IMPOSED  PURSUANT  TO  SUBDIVISION EIGHT-A OF
  SECTION EIGHT HUNDRED THIRTY-SEVEN OF THE  EXECUTIVE  LAW  AND  ANY  FEE
  IMPOSED  BY  THE FEDERAL BUREAU OF INVESTIGATION FOR A NATIONAL CRIMINAL
  HISTORY RECORD CHECK. THE  COMMISSIONER  SHALL  PROMPTLY  TRANSMIT  SUCH
  FINGERPRINTS  AND  FEES TO THE DIVISION OF CRIMINAL JUSTICE SERVICES FOR
  ITS FULL SEARCH AND RETAIN PROCESSING. THE DIVISION OF CRIMINAL  JUSTICE
  SERVICES  IS  AUTHORIZED  TO SUBMIT THE FINGERPRINTS AND THE APPROPRIATE
  FEE TO THE FEDERAL BUREAU  OF  INVESTIGATION  FOR  A  NATIONAL  CRIMINAL
  HISTORY  RECORD CHECK. THE DIVISION OF CRIMINAL JUSTICE SERVICES AND THE
  FEDERAL BUREAU OF INVESTIGATION  SHALL  FORWARD  SUCH  CRIMINAL  HISTORY
  RECORD TO THE COMMISSIONER IN A TIMELY MANNER. THE RELEASE OF SUCH CRIM-
  INAL  HISTORY  RECORD BY THE DIVISION OF CRIMINAL JUSTICE SERVICES SHALL
  BE SUBJECT TO THE PROVISIONS  OF  SUBDIVISION  SIXTEEN  OF  SECTION  TWO
  HUNDRED NINETY-SIX OF THE EXECUTIVE LAW. THE COMMISSIONER SHALL CONSIDER
  SUCH  CRIMINAL  HISTORY  RECORD  IN  ACCORDANCE WITH THE REQUIREMENTS OF
  ARTICLE TWENTY-THREE-A OF THE CORRECTION LAW, FOR THE PURPOSE OF  ESTAB-
  LISHING  THE  GOOD MORAL CHARACTER OF AN INDIVIDUAL AS REQUIRED IN PARA-
  GRAPH E OF THIS SUBDIVISION.
    (2) FOR THE PURPOSES  OF  THIS  SECTION  THE  TERM  "CRIMINAL  HISTORY
  RECORD" SHALL MEAN A RECORD OF ALL CONVICTIONS OF CRIMES AND ANY PENDING
  CRIMINAL CHARGES MAINTAINED ON AN INDIVIDUAL BY THE DIVISION OF CRIMINAL
  JUSTICE SERVICES AND THE FEDERAL BUREAU OF INVESTIGATION.
    FURTHERMORE,  UPON  NOTIFICATION  THAT  SUCH APPLICANT HAS BEEN REGIS-
  TERED, THE DIVISION OF CRIMINAL JUSTICE SERVICES SHALL HAVE THE AUTHORI-
  TY TO PROVIDE SUBSEQUENT CRIMINAL HISTORY NOTIFICATIONS DIRECTLY TO  THE
  COMMISSIONER.  ALL  SUCH  CRIMINAL  HISTORY  RECORDS  PROCESSED AND SENT
  PURSUANT TO THIS SUBDIVISION  SHALL  BE  CONFIDENTIAL  PURSUANT  TO  THE
  APPLICABLE  FEDERAL AND STATE LAWS, RULES AND REGULATIONS, AND SHALL NOT
  BE PUBLISHED OR IN ANY WAY DISCLOSED TO PERSONS OTHER THAN  THE  COMMIS-
  SIONER, UNLESS OTHERWISE AUTHORIZED BY LAW.
    (3)  NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW TO THE CONTRARY, THE
  COMMISSIONER IS AUTHORIZED TO CHARGE ADDITIONAL FEES TO  APPLICANTS  FOR
  REGISTRATION  IN AN AMOUNT EQUAL TO THE FEES ESTABLISHED PURSUANT TO LAW
  BY THE DIVISION OF CRIMINAL JUSTICE SERVICES AND THE FEDERAL  BUREAU  OF
  INVESTIGATION  FOR THE CRIMINAL HISTORY RECORD SEARCHES MANDATED BY THIS
  SUBDIVISION.
    G. ADDITIONAL DUTIES OF  THE  COMMISSIONER  AND  DEPARTMENT.  (1)  THE
  COMMISSIONER,  IN  COOPERATION  WITH  THE  DIVISION  OF CRIMINAL JUSTICE
  SERVICES AND IN ACCORDANCE WITH ALL APPLICABLE PROVISIONS OF LAW,  SHALL
  PROMULGATE  RULES  AND  REGULATIONS TO REQUIRE THE FINGERPRINTING OF THE
  INDIVIDUALS IDENTIFIED IN PARAGRAPH E OF THIS SUBDIVISION, AND  FOR  THE
  USE  OF INFORMATION DERIVED FROM SEARCHES OF THE RECORDS OF THE DIVISION

 S. 5286                             3

  OF CRIMINAL JUSTICE SERVICES AND THE  FEDERAL  BUREAU  OF  INVESTIGATION
  BASED  ON  THE  USE  OF SUCH FINGERPRINTS, AS PROVIDED IN PARAGRAPH F OF
  THIS SUBDIVISION.
    (2)  THE  COMMISSIONER,  IN  COOPERATION WITH THE DIVISION OF CRIMINAL
  JUSTICE SERVICES, SHALL PROMULGATE A FORM TO BE PROVIDED TO  ALL  APPLI-
  CANTS FOR REGISTRATION PURSUANT TO THIS SUBDIVISION THAT SHALL:

    (I) INFORM THE PROSPECTIVE APPLICANT THAT THE COMMISSIONER IS REQUIRED
  TO  REQUEST HIS OR HER CRIMINAL HISTORY INFORMATION FROM THE DIVISION OF
  CRIMINAL JUSTICE SERVICES AND THE FEDERAL BUREAU  OF  INVESTIGATION  AND
  REVIEW  SUCH  INFORMATION  PURSUANT  TO  THIS  SECTION,  AND  PROVIDE  A
  DESCRIPTION OF THE MANNER IN WHICH HIS OR HER FINGERPRINT CARDS WILL  BE
  USED UPON SUBMISSION TO THE DIVISION OF CRIMINAL JUSTICE SERVICES; AND
    (II)  INFORM THE PROSPECTIVE APPLICANT THAT HE OR SHE HAS THE RIGHT TO
  OBTAIN, REVIEW AND SEEK CORRECTION OF HIS OR HER CRIMINAL HISTORY INFOR-
  MATION PURSUANT TO REGULATIONS AND PROCEDURES ESTABLISHED BY  THE  DIVI-
  SION OF CRIMINAL JUSTICE SERVICES.
    (3)  THE  DEPARTMENT SHALL OBTAIN THE SIGNED, INFORMED CONSENT OF EACH
  INDIVIDUAL IDENTIFIED IN PARAGRAPH E OF THIS SUBDIVISION, ON  SUCH  FORM
  SUPPLIED BY THE COMMISSIONER, WHICH INDICATES THAT SUCH PERSON HAS:

    (I)  BEEN  INFORMED  OF THE RIGHTS AND PROCEDURES NECESSARY TO OBTAIN,
  REVIEW AND SEEK CORRECTION OF HIS OR HER CRIMINAL HISTORY INFORMATION;
    (II) BEEN INFORMED OF THE REASON FOR THE REQUEST FOR HIS OR HER CRIMI-
  NAL HISTORY INFORMATION;
    (III) CONSENTED TO SUCH REQUEST FOR A REPORT;
    (IV) SUPPLIED ON THE FORM A CURRENT MAILING OR HOME ADDRESS  FOR  SUCH
  INDIVIDUAL;
    (V)  BEEN  INFORMED  THAT  HE  OR SHE MAY WITHDRAW HIS OR HER CONSENT,
  REGARDLESS OF WHETHER THE  DEPARTMENT  HAS  REVIEWED  SUCH  INDIVIDUAL'S
  CRIMINAL HISTORY INFORMATION;
    (VI)  BEEN  INFORMED THAT IN THE EVENT THE WHOLESALER'S OR MANUFACTUR-
  ER'S REGISTRATION PURSUANT TO THIS SUBDIVISION HAS EXPIRED OR  OTHERWISE
  TERMINATED,  THE  COMMISSIONER  SHALL  NOTIFY  THE  DIVISION OF CRIMINAL
  JUSTICE SERVICES OF SUCH EXPIRATION OR TERMINATION, AND THE DIVISION  OF
  CRIMINAL JUSTICE SERVICES SHALL DESTROY THE FINGERPRINTS OF THE INDIVID-
  UAL  OR  INDIVIDUALS ASSOCIATED WITH SUCH WHOLESALER'S OR MANUFACTURER'S
  REGISTRATION; AND
    (VII) BEEN INFORMED OF THE MANNER IN WHICH HE OR SHE MAY SUBMIT TO THE
  COMMISSIONER ANY INFORMATION THAT MAY BE RELEVANT TO  THE  CONSIDERATION
  OF THE APPLICANT'S REGISTRATION INCLUDING, WHERE APPLICABLE, INFORMATION
  IN SUPPORT OF HIS OR HER GOOD MORAL CHARACTER OR REHABILITATION THEREOF.
    H.  PERFORMANCE  OR  SURETY  BOND.  EVERY  WHOLESALER  SHALL  SUBMIT A
  PERFORMANCE OR SURETY BOND OF NOT LESS THAN ONE HUNDRED THOUSAND DOLLARS
  TO THE DEPARTMENT TO ENSURE COMPLIANCE WITH THE PROVISIONS OF THIS ARTI-
  CLE, EXCEPT  THAT  THE  DEPARTMENT  MAY  WAIVE  SUCH  BOND  FOR  CERTAIN
  NOT-FOR-PROFIT  ENTITIES  SUCH  AS HOSPITALS AND CORRECTIONAL FACILITIES
  THAT LIMIT DISTRIBUTION TO THEIR OWN FACILITIES AND DO NOT  RETURN  SUCH
  MEDICATIONS  TO  OTHER ENTITIES. SUCH WAIVER SHALL BE MADE ON THE RECOM-
  MENDATION OF THE STATE BOARD OF PHARMACY. THE DEPARTMENT MAY ALSO EXEMPT
  A WHOLESALER FROM THE SURETY BOND REQUIREMENT WHEN  SUCH  WHOLESALER  IS
  OWNED  AND  OPERATED BY A FACILITY, SUBJECT TO THE PROVISIONS OF ARTICLE
  TWENTY-EIGHT OF THE PUBLIC HEALTH LAW AND OTHER FACILITIES GOVERNED BY A
  STATE AGENCY THAT LIMITS  ITS  DISTRIBUTION  OF  PRESCRIPTION  DRUGS  TO
  FACILITIES  AND PRACTITIONERS WITHIN THE INSTITUTION'S NETWORK AND OPER-
  ATIONS AND DOES NOT SELL OR RETURN SUCH MEDICATIONS TO MANUFACTURERS  OR
  TO OTHER WHOLESALERS.

 S. 5286                             4

    I.  WHOLESALER  REGISTRATION.  THE DEPARTMENT MAY PROMULGATE RULES AND
  REGULATIONS TO EXEMPT FROM THE REQUIREMENTS OF PARAGRAPHS E, F, G AND  H
  OF  THIS SUBDIVISION A WHOLESALER THAT HAS RECEIVED ACCREDITATION FROM A
  NATIONALLY RECOGNIZED ACCREDITATION BODY APPROVED  BY  THE  COMMISSIONER
  AND THAT MEETS THE LICENSING STANDARDS UNDER THIS SUBDIVISION. THE STAN-
  DARDS SHALL BE DEFINED BY THE COMMISSIONER PURSUANT TO REGULATIONS.
    J.  MANUFACTURER  REGISTRATION.  NOTWITHSTANDING  THE REQUIREMENTS FOR
  REGISTRATION UNDER THIS SUBDIVISION, THE  COMMISSIONER  SHALL  EXEMPT  A
  MANUFACTURER  LICENSED OR APPROVED BY THE FEDERAL FOOD AND DRUG ADMINIS-
  TRATION (FDA) OR ITS SUCCESSOR AGENCY TO MANUFACTURE  DRUGS  OR  DEVICES
  WITH REGARD TO SUCH DRUGS OR DEVICES FROM THE REQUIREMENTS OF PARAGRAPHS
  E,  F,  G  AND H OF THIS SUBDIVISION IN THE EVENT THAT SUCH REQUIREMENTS
  ARE NOT REQUIRED BY FEDERAL LAW OR REGULATION  UNLESS  THE  COMMISSIONER
  DETERMINES  THAT  SUCH  REQUIREMENTS  ARE NECESSARY TO PREVENT A RISK TO
  PRESCRIPTION DRUG DISTRIBUTION IN THE STATE.
    S 4. The education law is amended by adding a new  section  6810-a  to
  read as follows:

    S  6810-A.  UNLAWFUL TRANSACTIONS BY MANUFACTURERS AND WHOLESALERS. IT
  SHALL BE UNLAWFUL FOR A MANUFACTURER, WHOLESALER OR OTHER PERSON TO:

    1. INTENTIONALLY PACKAGE, SELL, TRANSFER, DISTRIBUTE  OR  DELIVER  ANY
  PRESCRIPTION DRUG THAT HE OR SHE KNOWS IS ADULTERATED, MISBRANDED, COUN-
  TERFEIT OR HAS OTHERWISE BEEN RENDERED UNFIT FOR DISTRIBUTION.
    2.  INTENTIONALLY  PACKAGE,  SELL,  TRANSFER,  DISTRIBUTE OR DELIVER A
  PRESCRIPTION DRUG TO ANY WHOLESALER WHO IS NOT  LICENSED  OR  REGISTERED
  PURSUANT TO THIS ARTICLE.
    A  PERSON WHO VIOLATES THIS SECTION SHALL BE GUILTY OF A CLASS D FELO-
  NY.  IN ADDITION, ANY DRUG PACKAGED, SOLD, TRANSFERRED,  DISTRIBUTED  OR
  DELIVERED  IN  VIOLATION OF THIS SECTION SHALL BE CONTRABAND AND SUBJECT
  TO SEIZURE BY THE BOARD OF PHARMACY, THE DEPARTMENT OF HEALTH OR ANY LAW
  ENFORCEMENT OFFICER OF THE STATE.
    S 5. Section 6824 of the education law, as added by chapter 987 of the
  laws of 1971, is amended to read as follows:

    S 6824. Injunction proceedings. In addition to the remedies hereinaft-
  er provided, the secretary is hereby authorized to apply to the court of
  the proper venue for an injunction  to  restrain  any  person  from  (a)
  introducing or causing to be introduced into commerce any adulterated or
  misbranded  drug, device or cosmetic; or (b) from introducing or causing
  to be introduced in commerce any new drug which does not comply with the
  provisions of this article; or (c) from disseminating or causing  to  be
  disseminated  a  false  advertisement; OR (D) VIOLATING ANY PROVISION OF
  SECTION  SIXTY-EIGHT  HUNDRED  TEN-A  OF  THIS  ARTICLE,  without  being
  compelled  to  allege  or  prove that an adequate remedy at law does not
  exist.
    S 6. This act shall take effect on the one hundred eightieth day after
  it shall have become a law.