Sen. Thomas Cullerton

Filed: 3/5/2019





10100SB1839sam001LRB101 09712 AMC 56582 a


2    AMENDMENT NO. ______. Amend Senate Bill 1839 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Wholesale Drug Distribution Licensing Act
5is amended by changing Sections 15, 57, and 200 and adding
6Section 28 as follows:
7    (225 ILCS 120/15)  (from Ch. 111, par. 8301-15)
8    (Section scheduled to be repealed on January 1, 2023)
9    Sec. 15. Definitions. As used in this Act:
10    "Authentication" means the affirmative verification,
11before any wholesale distribution of a prescription drug
12occurs, that each transaction listed on the pedigree has
14    "Authorized distributor of record" means a wholesale
15distributor with whom a manufacturer has established an ongoing
16relationship to distribute the manufacturer's prescription



10100SB1839sam001- 2 -LRB101 09712 AMC 56582 a

1drug. An ongoing relationship is deemed to exist between a
2wholesale distributor and a manufacturer when the wholesale
3distributor, including any affiliated group of the wholesale
4distributor, as defined in Section 1504 of the Internal Revenue
5Code, complies with the following:
6        (1) The wholesale distributor has a written agreement
7    currently in effect with the manufacturer evidencing the
8    ongoing relationship; and
9        (2) The wholesale distributor is listed on the
10    manufacturer's current list of authorized distributors of
11    record, which is updated by the manufacturer on no less
12    than a monthly basis.
13    "Blood" means whole blood collected from a single donor and
14processed either for transfusion or further manufacturing.
15    "Blood component" means that part of blood separated by
16physical or mechanical means.
17    "Board" means the State Board of Pharmacy of the Department
18of Professional Regulation.
19    "Chain pharmacy warehouse" means a physical location for
20prescription drugs that acts as a central warehouse and
21performs intracompany sales or transfers of the drugs to a
22group of chain or mail order pharmacies that have the same
23common ownership and control. Notwithstanding any other
24provision of this Act, a chain pharmacy warehouse shall be
25considered part of the normal distribution channel.
26    "Co-licensed partner or product" means an instance where



10100SB1839sam001- 3 -LRB101 09712 AMC 56582 a

1one or more parties have the right to engage in the
2manufacturing or marketing of a prescription drug, consistent
3with the FDA's implementation of the Prescription Drug
4Marketing Act.
5    "Department" means the Department of Financial and
6Professional Regulation.
7    "Drop shipment" means the sale of a prescription drug to a
8wholesale distributor by the manufacturer of the prescription
9drug or that manufacturer's co-licensed product partner, that
10manufacturer's third-party third party logistics provider, or
11that manufacturer's exclusive distributor or by an authorized
12distributor of record that purchased the product directly from
13the manufacturer or one of these entities whereby the wholesale
14distributor or chain pharmacy warehouse takes title but not
15physical possession of such prescription drug and the wholesale
16distributor invoices the pharmacy, chain pharmacy warehouse,
17or other person authorized by law to dispense or administer
18such drug to a patient and the pharmacy, chain pharmacy
19warehouse, or other authorized person receives delivery of the
20prescription drug directly from the manufacturer, that
21manufacturer's third-party third party logistics provider, or
22that manufacturer's exclusive distributor or from an
23authorized distributor of record that purchased the product
24directly from the manufacturer or one of these entities.
25    "Drug sample" means a unit of a prescription drug that is
26not intended to be sold and is intended to promote the sale of



10100SB1839sam001- 4 -LRB101 09712 AMC 56582 a

1the drug.
2    "Facility" means a facility of a wholesale distributor
3where prescription drugs are stored, handled, repackaged, or
4offered for sale.
5    "FDA" means the United States Food and Drug Administration.
6    "Manufacturer" means a person licensed or approved by the
7FDA to engage in the manufacture of drugs or devices,
8consistent with the definition of "manufacturer" set forth in
9the FDA's regulations and guidances implementing the
10Prescription Drug Marketing Act.
11    "Manufacturer's exclusive distributor" means anyone who
12contracts with a manufacturer to provide or coordinate
13warehousing, distribution, or other services on behalf of a
14manufacturer and who takes title to that manufacturer's
15prescription drug, but who does not have general responsibility
16to direct the sale or disposition of the manufacturer's
17prescription drug. A manufacturer's exclusive distributor must
18be licensed as a wholesale distributor under this Act and, in
19order to be considered part of the normal distribution channel,
20must also be an authorized distributor of record.
21    "Normal distribution channel" means a chain of custody for
22a prescription drug that goes, directly or by drop shipment,
23from (i) a manufacturer of the prescription drug, (ii) that
24manufacturer to that manufacturer's co-licensed partner, (iii)
25that manufacturer to that manufacturer's third-party third
26party logistics provider, or (iv) that manufacturer to that



10100SB1839sam001- 5 -LRB101 09712 AMC 56582 a

1manufacturer's exclusive distributor to:
2        (1) a pharmacy or to other designated persons
3    authorized by law to dispense or administer the drug to a
4    patient;
5        (2) a wholesale distributor to a pharmacy or other
6    designated persons authorized by law to dispense or
7    administer the drug to a patient;
8        (3) a wholesale distributor to a chain pharmacy
9    warehouse to that chain pharmacy warehouse's intracompany
10    pharmacy to a patient or other designated persons
11    authorized by law to dispense or administer the drug to a
12    patient;
13        (4) a chain pharmacy warehouse to the chain pharmacy
14    warehouse's intracompany pharmacy or other designated
15    persons authorized by law to dispense or administer the
16    drug to the patient;
17        (5) an authorized distributor of record to one other
18    authorized distributor of record to an office-based health
19    care practitioner authorized by law to dispense or
20    administer the drug to the patient; or
21        (6) an authorized distributor to a pharmacy or other
22    persons licensed to dispense or administer the drug.
23    "Pedigree" means a document or electronic file containing
24information that records each wholesale distribution of any
25given prescription drug from the point of origin to the final
26wholesale distribution point of any given prescription drug.



10100SB1839sam001- 6 -LRB101 09712 AMC 56582 a

1    "Person" means and includes a natural person, partnership,
2association, corporation, or any other legal business entity.
3    "Pharmacy distributor" means any pharmacy licensed in this
4State or hospital pharmacy that is engaged in the delivery or
5distribution of prescription drugs either to any other pharmacy
6licensed in this State or to any other person or entity
7including, but not limited to, a wholesale drug distributor
8engaged in the delivery or distribution of prescription drugs
9who is involved in the actual, constructive, or attempted
10transfer of a drug in this State to other than the ultimate
11consumer except as otherwise provided for by law.
12    "Prescription drug" means any human drug, including any
13biological product (except for blood and blood components
14intended for transfusion or biological products that are also
15medical devices), required by federal law or regulation to be
16dispensed only by a prescription, including finished dosage
17forms and bulk drug substances subject to Section 503 of the
18Federal Food, Drug and Cosmetic Act.
19    "Repackage" means repackaging or otherwise changing the
20container, wrapper, or labeling to further the distribution of
21a prescription drug, excluding that completed by the pharmacist
22responsible for dispensing the product to a patient.
23    "Secretary" means the Secretary of Financial and
24Professional Regulation.
25    "Third-party Third party logistics provider" means anyone
26who contracts with a prescription drug manufacturer to provide



10100SB1839sam001- 7 -LRB101 09712 AMC 56582 a

1or coordinate warehousing, distribution, or other services on
2behalf of a manufacturer, but does not take title to the
3prescription drug or have general responsibility to direct the
4prescription drug's sale or disposition. A third-party third
5party logistics provider must be licensed as a third-party
6logistics provider wholesale distributor under this Act and, in
7order to be considered part of the normal distribution channel,
8must also be an authorized distributor of record.
9    "Wholesale distribution" means the distribution of
10prescription drugs to persons other than a consumer or patient,
11but does not include any of the following:
12        (1) Intracompany sales of prescription drugs, meaning
13    (i) any transaction or transfer between any division,
14    subsidiary, parent, or affiliated or related company under
15    the common ownership and control of a corporate entity or
16    (ii) any transaction or transfer between co-licensees of a
17    co-licensed product.
18        (2) The sale, purchase, distribution, trade, or
19    transfer of a prescription drug or offer to sell, purchase,
20    distribute, trade, or transfer a prescription drug for
21    emergency medical reasons.
22        (3) The distribution of prescription drug samples by
23    manufacturers' representatives.
24        (4) Drug returns, when conducted by a hospital, health
25    care entity, or charitable institution in accordance with
26    federal regulation.



10100SB1839sam001- 8 -LRB101 09712 AMC 56582 a

1        (5) The sale of minimal quantities of prescription
2    drugs by licensed pharmacies to licensed practitioners for
3    office use or other licensed pharmacies.
4        (6) The sale, purchase, or trade of a drug, an offer to
5    sell, purchase, or trade a drug, or the dispensing of a
6    drug pursuant to a prescription.
7        (7) The sale, transfer, merger, or consolidation of all
8    or part of the business of a pharmacy or pharmacies from or
9    with another pharmacy or pharmacies, whether accomplished
10    as a purchase and sale of stock or business assets.
11        (8) The sale, purchase, distribution, trade, or
12    transfer of a prescription drug from one authorized
13    distributor of record to one additional authorized
14    distributor of record when the manufacturer has stated in
15    writing to the receiving authorized distributor of record
16    that the manufacturer is unable to supply the prescription
17    drug and the supplying authorized distributor of record
18    states in writing that the prescription drug being supplied
19    had until that time been exclusively in the normal
20    distribution channel.
21        (9) The delivery of or the offer to deliver a
22    prescription drug by a common carrier solely in the common
23    carrier's usual course of business of transporting
24    prescription drugs when the common carrier does not store,
25    warehouse, or take legal ownership of the prescription
26    drug.



10100SB1839sam001- 9 -LRB101 09712 AMC 56582 a

1        (10) The sale or transfer from a retail pharmacy, mail
2    order pharmacy, or chain pharmacy warehouse of expired,
3    damaged, returned, or recalled prescription drugs to the
4    original manufacturer, the originating wholesale
5    distributor, or a third party returns processor.
6    "Wholesale drug distributor" means anyone engaged in the
7wholesale distribution of prescription drugs into, out of, or
8within the State, including without limitation manufacturers;
9repackers; own label distributors; jobbers; private label
10distributors; brokers; warehouses, including manufacturers'
11and distributors' warehouses; manufacturer's exclusive
12distributors; and authorized distributors of record; drug
13wholesalers or distributors; independent wholesale drug
14traders; specialty wholesale distributors; third party
15logistics providers; and retail pharmacies that conduct
16wholesale distribution; and chain pharmacy warehouses that
17conduct wholesale distribution. In order to be considered part
18of the normal distribution channel, a wholesale distributor
19must also be an authorized distributor of record.
20(Source: P.A. 97-804, eff. 1-1-13.)
21    (225 ILCS 120/28 new)
22    Sec. 28. Third-party logistics providers licensing
24    (a) Each facility of a third-party logistics provider
25located within Illinois shall be licensed by the Department



10100SB1839sam001- 10 -LRB101 09712 AMC 56582 a

1prior to shipping a prescription drug:
2        (1) within the borders of Illinois; or
3        (2) to a location outside the borders of Illinois.
4    (b) Each facility of a third-party logistics provider
5located within Illinois must provide, on a form provided by the
6Department, information that shall include, but is not limited
8        (1) the name, business address, and social security
9    number or federal tax identification number of each owner,
10    officer, and stockholder owning more than 10% of the stock
11    of the company, unless the stock of the company is publicly
12    traded;
13        (2) every trade or business name used by the applicant;
14    and
15        (3) any disciplinary action taken by any state or
16    federal authority against the applicant or any other
17    third-party logistics provider under common ownership or
18    control, or any owner, principal, or designated
19    representative of the applicant, in connection with the
20    drug laws or regulations of any state or the federal
21    government.
22    (c) Licenses issued under subsection (b) of this Section
23shall be renewed annually upon:
24        (1) completion of an application; and
25        (2) payment of a renewal fee as established by
26    administrative rules adopted by the Department.



10100SB1839sam001- 11 -LRB101 09712 AMC 56582 a

1    (d) A third-party logistics provider license shall be valid
2only for the name, ownership, and location listed on the
4    The Department may require a criminal history and financial
5background check of each principal, owner, or officer of the
6applicant prior to initial registration and prior to any
7renewal unless the applicant is publicly traded. Any such
8checks shall be at the applicant's expense.
9    Changes of name, ownership, or location shall require a new
10third-party logistics provider license.
11    Changes in information required for licensure shall be
12reported to the Department, in writing, within 45 days after
13the change.
14    (e) A third-party logistics provider that provides
15services in respect to controlled substances as defined in the
16Illinois Controlled Substances Act must also complete and
17submit the controlled substance registration form provided by
18the Department, with the appropriate fee.
19    (f) Each third-party logistics provider must designate an
20individual representative who shall serve as the contact person
21for the Department.
22    (g) An agent or employee of any licensed third-party
23logistics provider does not need a license and may lawfully
24possess pharmaceutical drugs when acting in the usual course of
25business or employment.
26    (h) A third-party logistics provider shall not operate from



10100SB1839sam001- 12 -LRB101 09712 AMC 56582 a

1a place of residence.
2    A third-party logistics provider facility shall be located
3apart and separate from any retail pharmacy licensed by the
5    The Department may require a physical inspection of each
6facility prior to initial registration and prior to any
8    (i) A third-party logistics provider shall publicly
9display all licenses and have the most recent State and federal
10inspection reports readily available.
11    (j) The Department shall adopt rules establishing
12requirements for a third-party logistics provider license,
13licensure fees, and other relevant matters.
14    (k) The Department may waive any requirement of this
15Section if, in the Board's judgment, a waiver will further
16public health or safety. A waiver granted under this Section
17shall only be effective when issued in writing.
18    (l) The Department may deny, suspend, or revoke a
19third-party logistics provider license or otherwise discipline
20a third-party logistics provider for failure to meet the
21applicable standards or for a violation of the laws of this
22State, another state, or the United States or for a violation
23of this Act or a rule of the Department.
24    (225 ILCS 120/57)
25    (Section scheduled to be repealed on January 1, 2023)



10100SB1839sam001- 13 -LRB101 09712 AMC 56582 a

1    Sec. 57. Pedigree.
2    (a) Each person who is engaged in the wholesale
3distribution of prescription drugs, including repackagers, but
4excluding the original manufacturer of the finished form of the
5prescription drug, that leave or have ever left the normal
6distribution channel shall, before each wholesale distribution
7of the drug, provide a pedigree to the person who receives the
8drug. A retail pharmacy, mail order pharmacy, or chain pharmacy
9warehouse must comply with the requirements of this Section
10only if the pharmacy or chain pharmacy warehouse engages in the
11wholesale distribution of prescription drugs. On or before July
121, 2009, the Department shall determine a targeted
13implementation date for electronic track and trace pedigree
14technology. This targeted implementation date shall not be
15sooner than July 1, 2010. Beginning on the date established by
16the Department, pedigrees may be implemented through an
17approved and readily available system that electronically
18tracks and traces the wholesale distribution of each
19prescription drug starting with the sale by the manufacturer
20through acquisition and sale by any wholesale distributor and
21until final sale to a pharmacy or other authorized person
22administering or dispensing the prescription drug. This
23electronic tracking system shall be deemed to be readily
24available only upon there being available a standardized system
25originating with the manufacturers and capable of being used on
26a wide scale across the entire pharmaceutical chain, including



10100SB1839sam001- 14 -LRB101 09712 AMC 56582 a

1manufacturers, wholesale distributors, and pharmacies.
2Consideration must also be given to the large-scale
3implementation of this technology across the supply chain and
4the technology must be proven to have no negative impact on the
5safety and efficacy of the pharmaceutical product.
6    (b) Each person who is engaged in the wholesale
7distribution of a prescription drug who is provided a pedigree
8for a prescription drug and attempts to further distribute that
9prescription drug, including repackagers, but excluding the
10original manufacturer of the finished form of the prescription
11drug, must affirmatively verify before any distribution of a
12prescription drug occurs that each transaction listed on the
13pedigree has occurred.
14    (c) The pedigree must include all necessary identifying
15information concerning each sale in the chain of distribution
16of the product from the manufacturer or the manufacturer's
17third-party third party logistics provider, co-licensed
18product partner, or exclusive distributor through acquisition
19and sale by any wholesale distributor or repackager, until
20final sale to a pharmacy or other person dispensing or
21administering the drug. This necessary chain of distribution
22information shall include, without limitation all of the
24        (1) The name, address, telephone number and, if
25    available, the e-mail address of each owner of the
26    prescription drug and each wholesale distributor of the



10100SB1839sam001- 15 -LRB101 09712 AMC 56582 a

1    prescription drug.
2        (2) The name and address of each location from which
3    the product was shipped, if different from the owner's.
4        (3) Transaction dates.
5        (4) Certification that each recipient has
6    authenticated the pedigree.
7    (d) The pedigree must also include without limitation all
8of the following information concerning the prescription drug:
9        (1) The name and national drug code number of the
10    prescription drug.
11        (2) The dosage form and strength of the prescription
12    drug.
13        (3) The size of the container.
14        (4) The number of containers.
15        (5) The lot number of the prescription drug.
16        (6) The name of the manufacturer of the finished dosage
17    form.
18    (e) Each pedigree or electronic file shall be maintained by
19the purchaser and the wholesale distributor for at least 3
20years from the date of sale or transfer and made available for
21inspection or use within 5 business days upon a request of the
23(Source: P.A. 95-689, eff. 10-29-07.)
24    (225 ILCS 120/200)
25    (Section scheduled to be repealed on January 1, 2023)



10100SB1839sam001- 16 -LRB101 09712 AMC 56582 a

1    Sec. 200. Drugs in shortage.
2    (a) For the purpose of this Section, "drug in shortage"
3means a drug, as defined in Section 356c of the Federal Food,
4Drug, and Cosmetic Act, listed on the drug shortage list
5maintained by the U.S. Food and Drug Administration in
6accordance with Section 356e of the Federal Food, Drug, and
7Cosmetic Act.
8    (b) Any person engaged in the wholesale distribution of a
9drug in shortage in this State must be licensed by the
11    (c) It is unlawful for any person, other than a
12manufacturer, a manufacturer's exclusive distributor, a
13third-party third party logistics provider, or an authorized
14distributor of record, to purchase or receive a drug in
15shortage from any person not licensed by the Department. This
16subsection (c) does not apply to the return of drugs or the
17purchase or receipt of drugs pursuant to any of the
18distributions that are specifically excluded from the
19definition of "wholesale distribution" in Section 15 of the
20Wholesale Drug Distribution Licensing Act.
21    (d) A person found to have violated a provision of this
22Section shall be subject to administrative fines, orders for
23restitution, and orders for disgorgement.
24    (e) The Department shall create a centralized, searchable
25database of those entities licensed to engage in wholesale
26distribution, including manufacturers, wholesale distributors,



10100SB1839sam001- 17 -LRB101 09712 AMC 56582 a

1and pharmacy distributors, to enable purchasers of a drug in
2shortage to easily verify the licensing status of an entity
3offering such drugs.
4    (f) The Department shall establish a system for reporting
5the reasonable suspicion that a violation of this Act has been
6committed by a distributor of a drug in shortage. Reports made
7through this system shall be referred to the Office of the
8Attorney General and the appropriate State's Attorney's office
9for further investigation and prosecution.
10    (g) The Department shall adopt rules to carry out the
11provisions of this Section.
12    (h) Nothing in this Section prohibits one hospital pharmacy
13from purchasing or receiving a drug in shortage from another
14hospital pharmacy in the event of a medical emergency.
15(Source: P.A. 98-355, eff. 8-16-13.)
16    Section 99. Effective date. This Act takes effect upon
17becoming law.".