201 KAR 2:320. Permit requirements for manufacturers

Link to law: http://www.lrc.ky.gov/kar/201/002/320.htm
Published: 2015

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      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,



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deteriorated, damaged, outdated, misbranded, adulterated, or otherwise recalled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

the applicant;

      (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

      (b) Be:

      1. Renewable annually thereafter upon

proper application accompanied by the renewal fee set forth in 201 KAR 2:050;


      2. Nontransferable.


      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


      (2) Security.

      (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

the premises.

      (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

electronic records.

      (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.

      (3) Recordkeeping.

      (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

the manufacturer;

      (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.)