201 KAR 2:320. Permit requirements for manufacturers.
RELATES TO: KRS 315.020(2), 315.036, and
STATUTORY AUTHORITY: KRS 315.020(2), 315.036,
NECESSITY, FUNCTION, AND CONFORMITY: KRS 315.036
and 315.191(1) authorizes the board to promulgate administrative regulations to
regulate the manufacturers of drugs. KRS 315.036 authorizes the board to
promulgate administrative regulations regarding manufacturer permits and the
maintenance and reporting of accurate records of all drugs manufactured, received
and sold. KRS 315.020(2) authorizes the Board to promulgate administrative regulations
regarding the pharmacist-in-charge. This administrative regulation establishes
the requirements for a manufacturer permit and for functioning as a manufacturer.
Section 1. Requirements. (1) A
manufacturer shall apply for a permit from the board in accordance with KRS
315.036 and this administrative regulation.
(2) A separate permit shall be required
for each facility within the Commonwealth regardless of whether joint ownership
or control exists.
(3) An agent or employee of a permit
holder shall not be required to obtain a permit under this section when the
agent or employee is acting in the usual course of business or employment.
(4) A permit shall not be issued or
renewed unless the applicant or its officers demonstrates or continues to demonstrate
acceptable operational procedures, including:
(a) Adequate maintenance and storage
conditions to ensure proper lighting, ventilation, temperature and humidity
control, sanitation, space, and security as per label requirements or current
year United States Pharmacopoeia (USP) compendium requirements. Appropriate
manual, electromechanical, or electronic temperature and humidity recording
equipment, devices, or logs shall be utilized to document proper storage of prescription
(b) Physical separation and quarantine of
deteriorated, damaged, outdated, misbranded, adulterated, or otherwise recalled
merchandise until they are destroyed or returned;
(c) Providing accurate and precise
records of all goods shipped or received including source or recipient, date,
quantity, itemized description, and any other information pertinent to the
(d) Providing proof of registration with
the state controlled substance authority, and with the U.S. Drug Enforcement Administration
and compliance with all DEA regulations.
Section 2. Qualifications for Permit. (1)(a)
The Kentucky Board of Pharmacy shall consider, at a minimum, the following
factors in reviewing the qualifications of persons who engage in manufacturer
of prescription drugs within the Commonwealth:
1. Any convictions of the officers of the
applicant under any federal, state, or local laws;
2. The applicant's past experience in the
manufacture of prescription drugs, including controlled substances;
3. The furnishing by the applicant of
false or fraudulent material in any application made in connection with drug
4. Suspension or revocation by federal,
state, or local government of any license or permit currently or previously
held by the applicant or its officers for the manufacture of any drugs,
including controlled substances;
5. Compliance with the requirements under
any previously granted license or permit, if any; and
6. Compliance with requirements to
maintain or make available to the Kentucky Board of Pharmacy or to federal,
state, or local law enforcement officials those records required under this
(b) The Kentucky Board of Pharmacy shall
have the right to deny a permit to an applicant or its officers if it
determines that the granting of that permit would not be in the public interest
for any reason established in KRS 315.121.
(2) A permit shall not be issued pursuant
to this administrative regulation unless the applicant or its officers has
furnished proof satisfactory to the Board of Pharmacy:
(a) That the applicant and its officers
are in compliance with all applicable federal and state laws and regulations
relating to drugs; and
(b) That the applicant and its officers
are equipped as to land, buildings, and security to properly carry on the
business described in the application.
(3) A permitted manufacturer may sell or
distribute federal legend drugs only to the following:
(a) A currently permitted manufacturer;
(b) A currently licensed wholesale
(c) A currently permitted pharmacy;
(d) A currently licensed practitioner;
(e) A currently licensed hospital, but
only for use by or in that hospital; or
(f) A person in charge of a laboratory,
but only for use in that laboratory for scientific and medical research
(4) A permit holder may be disciplined
for failure to comply with the provisions of KRS 315.036, pursuant to KRS
315.121, or this administrative regulation.
Section 3. Application, Fees; Renewals. (1)
An application for a permit shall be submitted to the Board of Pharmacy on Application
for a Permit to Operate as a Manufacturer (KBP M 5:09).
(2) An application shall be accompanied
by the annual fee set forth in 201 KAR 2:050.
(3) An application shall include:
(a) The name, full business address, and
telephone number of the applicant;
(b) All trade or business name used by
(c) Addresses, telephone numbers, and the
names of the contact persons for the facility used by the permittee for the storage,
handling, and manufacturing of prescription drugs;
(d) The type of ownership or operation
(i.e. partnership, corporation, or sole proprietorship);
(e) The name(s) of the owner and operator
of the permittee, including;
1. If a person, the name and Social
Security number of the person;
2. If a partnership, the name and Social
Security number of each partner, and the name of the partnership;
3. If a corporation, the name, Social
Security number 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 and social security number of the sole proprietor and the name of the
business entity; and
(f) A list of all licenses and permits
issued to the applicant by any other state that authorizes the applicant to
manufacture or possess prescription drugs.
(4) All permits shall:
(a) Expire on September 30 following the
date of issuance; and
1. Renewable annually thereafter upon
proper application accompanied by the renewal fee set forth in 201 KAR 2:050;
Section 4. Standards. (1) Facilities.
(a) All buildings in which legend drugs
are repackaged, stored, held, sold, offered for sale, exposed for sale, or kept
for sale shall be of suitable size, construction, and location to facilitate
cleaning, maintenance, and proper operations.
(b) Buildings shall meet all applicable
federal, state, and local standards. The facility shall have a quarantine area
for storage of prescription drugs that are outdated, damaged, deteriorated, misbranded,
or adulterated, or that are in immediate or sealed secondary containers that
have been opened.
(c) A facility shall not be located in a
(a) A manufacturer shall be equipped with
an alarm system to detect entry after hours.
(b) A manufacturer shall ensure that
access from outside their premises is well-controlled and reduced to a minimum.
This includes the installation of adequate lighting at the outside perimeter of
(c) Internal security policies shall be
developed to provide reasonable protection against theft and diversion by
limiting access to areas where legend drugs are held to authorized personnel.
These policies shall provide protection against tampering with computers or
(d) A permit holder shall employ adequate
personnel with the education and experience necessary to safely and lawfully
engage in the manufacturer of prescription drugs.
(e) Lists of officers, directors,
managers and other persons in charge of distribution, storage, and handling of
prescription drugs, including a description of their duties and summary of
their qualifications, shall be maintained for purpose of review.
(a) Inventories and other records of
transactions regarding the receipt and disposition of legend drugs shall be
maintained and readily available for inspection or photocopying by authorized
law enforcement officials for a period of two (2) years following disposition
of the drugs. These records shall include:
1. The source of the drugs including the
name and principal address of the seller or transferor and the address of the
location from which the drugs were shipped;
2. The identity and quantity of the drugs
received and distributed or disposed of; and
3. The dates of receipt and distribution
or other distribution of the drugs.
(b) Records described in this section
that are kept at the inspection site or that can be immediately retrieved by
computer or other electronic means shall be readily available for authorized
inspection during the retention period. Records kept at a central location
apart from the inspection site and not electronically retrievable shall be made
available for inspection within two (2) working days of a request by an
authorized official of a federal, state, or local law enforcement agency.
(4) Written policies and procedures.
(a) A manufacturer shall establish,
maintain, and adhere to written policies and procedures for the receipt,
security, storage, inventory, and distribution of prescription drugs, including
policies and procedures for identifying, recording, and reporting losses or
thefts and to ensure that the manufacturer prepares for, protects against, and
handles crisis situations that affect the security or operation of the
facility. These crises shall include fires, floods, or other natural disasters,
and situations of local, state, or national emergency.
(b) There shall be written policies and
procedures for managing and correcting all errors or inaccuracies in
(c) There shall be written policies and
procedures to assure that any outdated stock or any stock with an expiration
date that, in the manufacturer's view, does not allow sufficient time for
repacking or resale shall be segregated from other stock and shall be prepared
for return or otherwise destroyed, and this shall be documented.
(d) There shall be written policies and
procedures by which the manufacturer exercises control over the shipping and receiving
of all stock within the operation.
(5) Returned, damaged, and outdated prescription
drugs. A manufacturer’s operation shall maintain and follow a written procedure
to assure the proper handling and disposal of returned goods. If conditions
under which a prescription drug has been returned cast doubt on the drug's
safety, identity, strength, quality, or purity, then the drug shall be
destroyed, or returned to the supplier, unless examination, testing, or other
investigation proves that the drug meets appropriate standards of safety,
identity, strength, quality, and purity. In determining whether the conditions
under which a drug has been returned cast doubt on the drug's safety, identity,
strength, quality, or purity, the manufacturer shall consider, among other
things, the conditions under which the drug 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.
(6) Handling recalls. A manufacturer
shall adopt, maintain, and follow a written policy for handling recalls and
withdrawals of products. The policy shall cover all recalls and withdrawals of
drug products due to:
(a) Any voluntary action on the part of
(b) The direction of the Food and Drug
Administration, or any other federal, state, or local government agency; and
(c) Replacement of existing merchandise
with an improved product or new package design.
(7)(a) A visual examination of all
materials received or shipped shall be made to guarantee product identity and
to reasonably guard against acceptance or delivery of damaged, contaminated, tampered,
or otherwise unfit stock.
(b) Procedures for distribution of
approved stock shall provide for a rotation whereby the first expiration inventory
is distributed first.
(c) A manufacturer shall be subject to
the provisions of any applicable federal, state, or local laws or regulations
that relate to prescription drug product salvaging or reprocessing.
Section 5. Pharmacist-in-charge. A
manufacturer shall designate a pharmacist-in-charge of the facility who shall
be responsible to the board for security and recordkeeping. The
pharmacist-in-charge shall review the security and records by conducting an
on-site inspection not less than quarterly.
Section 6. Violations. (1) A drug
manufacturer shall not distribute legend drugs directly to a consumer or a
patient or operate in a manner that endangers the public health.
(2) Violation of any of these provisions
shall be grounds for the discipline of the permit pursuant to KRS 315.121.
Section 7. Incorporation by Reference. (1)
"Application for a Permit to Operate as a Manufacturer", 6/09, is
incorporated by reference.
(2) This material may be inspected,
copied, or obtained, subject to applicable copyright law, at the Kentucky Board
of Pharmacy, Spindletop Administrative Building, Suite 302, 2624 Research Park
Drive, Lexington, Kentucky 40511, Monday through Friday, 8 a.m. through 4:30
p.m. (36 Ky.R. 618; Am. 778; eff. 10-21-09.)