BILL NUMBER:S5127

TITLE OF BILL:

An act to amend the education law, in relation to unlawful transactions
of prescription drugs

PURPOSE:

To provide penalties in connection with the sale of counterfeit
prescription drugs and the sale of prescription drugs to unlicensed
wholesalers.

SUMMARY OF PROVISIONS:

Section one amends the education law by adding a new section 6810-a to
provide that it shall be unlawful for any person to: (a) knowingly pack-
age, sell, deliver for sale, hold for sale or offer for sale, purchase,
deliver for purchase, hold for purchase or offer for purchase (i) any
prescription drug that he or she knows is adulterated, misbranded, coun-
terfeit or has otherwise been rendered unfit for distribution or (ii)
any drug not approved by the United States food and drug administration
or successor thereto for sale, other than a drug compounded by a pharma-
cist pursuant to a valid prescription from an authorized prescriber; or
(b) intentionally sell, transfer, distribute or deliver a prescription
drug to any wholesaler who is not licensed or registered pursuant to
              

this article. The section provides what a compounded drug means for
purposes of this section. The section further provides that a person who
violates this section shall be guilty of a class D felony. Any drug
packaged, sold, transferred, distributed or delivered in violation of
this section shall be contraband and subject to seizure by the depart-
ment, the department of health or any law enforcement officer of the
state.

Section two 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). In some countries, between 30 to 50% of drugs
to treat serious diseases are counterfeit.  Remarks of Margaret A.
Hamburg, Commissioner of the Food and Drugs Partnership for Safe Medi-
cines Interchange October 8, 2010. 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% of drugs in
North America being counterfeit.  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.

Although the federal Drug Quality and Security Act ("DQSA") was enacted
in November 2013 to create a new federal system to trace prescription
drugs and to establish uniform national licensing standards for whole-
sale distributors and third party logistics providers, anticounterfeit-
ing laws will not solve the problem alone; the laws must be enforced.
Without enforcement tools, as WHO has stated, "crime is perpetuated as
criminals are not afraid of being arrested and prosecuted. Lenient
punishments for offenses tend to encourage criminal activities,"

To better secure the drug supply system, we must adopt at the state
level a multi-layered strategy that adds to establishing pedigree
requirements and strengthening the licensing requirements of wholesalers
set forth in the DQSA and increase penalties for those who violate the
law. The DQSA does not preempt the states' ability to enact laws that
provide for penalties in connection with the counterfeiting of
prescription drugs.

LEGISLATIVE HISTORY:

A.8966-A, 2014 amended and recommitted to higher education.

FISCAL IMPLICATIONS:

None to the State.

EFFECTIVE DATE:

This act shall take effect on the one hundred eightieth day after it
shall have become a law.