(a) Definitions. As used in this section: (1) “Drugs”, “devices” and “cosmetics” have the same meanings as defined in § 21a-92, “wholesaler” or “distributor” means a person, including, but not limited to, a medical device and oxygen provider, a third-party logistics provider, a virtual manufacturer or a virtual wholesale distributor, as such terms are defined in § 20-571, whether within or without the boundaries of the state of Connecticut, who supplies drugs, devices or cosmetics prepared, produced or packaged by manufacturers, to other wholesalers, manufacturers, distributors, hospitals, prescribing practitioners, as defined in subdivision (28) of § 20-571, pharmacies, federal, state or municipal agencies, clinics or any other person as permitted under subsection (h) of this section, except that: (A) A retail pharmacy or a pharmacy within a licensed hospital that supplies to another such pharmacy a quantity of a noncontrolled drug or a schedule II, III, IV or V controlled substance normally stocked by such pharmacies to provide for the immediate needs of a patient pursuant to a prescription or medication order of an authorized practitioner, (B) a pharmacy within a licensed hospital that supplies drugs to another hospital or an authorized practitioner for research purposes, (C) a retail pharmacy that supplies a limited quantity of a noncontrolled drug or of a schedule II, III, IV or V controlled substance for emergency stock to a practitioner who is a medical director of a chronic and convalescent nursing home, of a rest home with nursing supervision, of a hospice inpatient facility licensed pursuant to § 19a-491 or of a state correctional institution, and (D) a pharmacy within a licensed hospital that contains another hospital wholly within its physical structure that supplies to such contained hospital a quantity of a noncontrolled drug or a schedule II, III, IV, or V controlled substance normally stocked by such hospitals to provide for the needs of a patient, pursuant to a prescription or medication order of an authorized practitioner, receiving inpatient care on a unit that is operated by the contained hospital, or receiving outpatient care in a setting operated by the contained hospital and such drug or substance is administered on-site by the contained hospital, shall not be deemed a wholesaler under this section; (2) “manufacturer” means (A) a person, whether within or without the boundaries of the state of Connecticut, who produces, prepares, cultivates, grows, propagates, compounds, converts or processes, directly or indirectly, by extraction from substances of natural origin or by means of chemical synthesis or by a combination of extraction and chemical synthesis, or who packages, repackages, labels or relabels a container under such manufacturer’s own or any other trademark or label any drug, device or cosmetic for the purpose of selling such items, or (B) a sterile compounding pharmacy, as defined in § 20-633b, that dispenses sterile pharmaceuticals without a prescription or a patient-specific medical order; (3) “drug”, “device” and “cosmetic” have the same meanings as provided in § 21a-92; and (4) “commissioner” means the Commissioner of Consumer Protection or his or her designee.

(b) Registration of wholesalers and manufacturers of drugs required. Exceptions. Fees. Expenses. No wholesaler or manufacturer shall operate as such until he has received a certificate of registration issued by the commissioner, which certificate shall be renewed annually, provided no such certificate shall be required of a manufacturer, except a sterile compounding pharmacy, as defined in subsection (a) of § 20-633b, whose principal place of business is located outside the state, who is registered with the federal Food and Drug Administration or any successor agency and who files a copy of such registration with the commissioner. A fee of one hundred ninety dollars shall be charged for each wholesaler’s certificate and renewal thereof. A separate certificate and corresponding fee is required for each location existing in this state and for each location existing outside of this state that distributes products into this state. The fee for a manufacturer’s certificate and renewal thereof shall be two hundred eighty-five dollars for manufacturers employing not more than five licensed pharmacists or qualified chemists or both; three hundred seventy-five dollars for manufacturers employing not more than ten licensed pharmacists or qualified chemists or both; and nine hundred forty dollars for manufacturers employing more than ten licensed pharmacists or qualified chemists or both. No such certificate shall be issued to a manufacturer unless such drugs, devices or cosmetics are manufactured or compounded under the direct supervision of a licensed pharmacist or a qualified chemist. No certificate of registration shall be issued under this section until the applicant has furnished proof satisfactory to the commissioner that the applicant is equipped as to facilities and apparatus to properly carry on the business described in his application and that the applicant conforms to chapter 418 and regulations adopted thereunder.

(c) Commissioner’s right to deny certificate. The commissioner shall have the right to deny a certificate of registration if he determines that the issuance of such registration is inconsistent with the public interest. In determining the public interest, the commissioner shall consider, at a minimum, the following factors:

(1) Any convictions or regulatory actions involving the applicant under any federal, state or local law relating to drug samples, wholesale or retail drug distribution, or distribution or possession of drugs including controlled substances;

(2) Any felony convictions of the applicant under federal, state or local laws;

(3) The applicant’s past experience in the manufacture or distribution of drugs;

(4) The furnishing by the applicant of false or fraudulent material in any application made in connection with drug manufacturing or distribution;

(5) Suspension, revocation or other sanction by federal, state or local government of any license or registration currently or previously held by the applicant for the manufacture or distribution of any drugs;

(6) Compliance with licensing or registration requirements under previously granted licenses or registrations;

(7) Compliance with requirements to maintain or make available to the commissioner or to federal, state or local law enforcement officials those records required by any federal or state statute or regulation;

(8) Failure to provide adequate control against the diversion, theft and loss of drugs;

(9) Provision of required security for legend drugs and, in the case of controlled substances, compliance with security requirements for wholesalers set forth in regulations adopted under chapter 420b; and

(10) Compliance with all regulations adopted to enforce the provisions of this section.

(d) Suspension, revocation or refusal to renew registration. The commissioner may suspend, revoke or refuse to renew a registration, or may issue a letter of reprimand or place a registrant on probationary status, for sufficient cause. Any of the following shall be sufficient cause for such action:

(1) The furnishing of false or fraudulent information in any application or other document filed with the commissioner;

(2) Any criminal conviction of the registrant under any federal or state statute concerning drugs;

(3) The suspension, revocation or other restriction or penalty issued against a license or registration related to drugs;

(4) Failure to provide adequate control against the diversion, theft and loss of drugs; or

(5) A violation of any provision of any federal or state statute or regulation concerning drugs.

(e) Compliance with applicable laws. Wholesalers and manufacturers shall operate in compliance with applicable federal, state and local statutes, regulations and ordinances, including any applicable laws concerning controlled substances, drug product salvaging or reprocessing.

(f) Inspections and audits. Wholesalers and manufacturers shall permit the commissioner, or his authorized representatives, to enter and inspect their premises and delivery vehicles, and to audit their records and written operating procedures, at reasonable times and in a reasonable manner.

(g) Hearings. Before denying, suspending, revoking or refusing to renew a registration, or before issuing a letter of reprimand or placing a registrant on probationary status, the commissioner shall afford the applicant or registrant an opportunity for a hearing in accordance with the provisions of chapter 54. Notice of such hearing may be given by certified mail. The commissioner may subpoena witnesses and require the production of records, papers and documents pertinent to such hearing.

(h) Sale of drugs limited. Regulations. No wholesaler or manufacturer shall sell any drugs except to the state or any political subdivision thereof, to another manufacturer or wholesaler, to any hospital recognized by the state as a general or specialty hospital, to any institution having a full-time pharmacist who is actively engaged in the practice of pharmacy in such institution not less than thirty-five hours a week, to a chronic and convalescent nursing home having a pharmacist actively engaged in the practice of pharmacy based upon the ratio of one-tenth of one hour per patient per week but not less than twelve hours per week, to a practicing physician, podiatrist, dentist, optometrist or veterinarian, to a licensed pharmacy or a store to which a permit to sell nonlegend drugs has been issued as provided in § 20-624 or to an authorized entity that has established a medical protocol with a prescribing practitioner pursuant to § 19a-909, provided drugs sold to an authorized entity shall be limited to epinephrine cartridge injectors. The commissioner may adopt such regulations as are necessary to administer and enforce the provisions of this section.

(i) System to identify suspicious orders of controlled substances. Reports. (1) Each registered manufacturer or wholesaler of drugs shall operate a system to identify suspicious orders of controlled substances and shall immediately inform the Director of the Drug Control Division of suspicious orders. Suspicious orders include, but are not limited to, orders of unusual size, orders deviating substantially from a normal pattern and orders of unusual frequency. Each registered manufacturer or wholesaler of drugs shall also send the Drug Control Division a copy of any suspicious orders submitted to the federal Drug Enforcement Administration pursuant to 21 C.F.R. § 1301.74.

(2) Each registered manufacturer or wholesaler of drugs that, based on concerns of potential diversion, ceases or declines distribution of any schedule II, III, IV or V controlled substance to a pharmacy, as defined in § 20-594, or to a practitioner, as defined in § 21a-316, in the state of Connecticut shall report the name of the pharmacy or practitioner, location of the pharmacy or practitioner and the reasons for ceasing or declining distribution of such controlled substance in writing to the Director of the Drug Control Division, or to an electronic system designated by the Drug Control Division, not later than five business days after ceasing or declining distribution of such controlled substance.

(j) Penalty. Any person who violates any provision of this section shall be fined not more than five hundred dollars or imprisoned not more than six months, or both.