TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING

BOARD OF PHARMACY

Proposed Regulation

Title of Regulation: 18VAC110-20. Regulations Governing the Practice of Pharmacy (amending 18VAC110-20-460, 18VAC110-20-490).

Statutory Authority: §§ 54.1-2400 and 54.1-3307 of the Code of Virginia.

Public Hearing Information:

March 28, 2024 - 9:07 a.m. - Department of Health Professions, Board Room 4, 9960 Mayland Drive, Suite 201, Henrico, Virginia 23233

Public Comment Deadline: June 7, 2024.

Agency Contact: Caroline Juran, RPh, Executive Director, Board of Pharmacy, 9960 Mayland Drive, Suite 300, Richmond, VA 23233-1463, telephone (804) 367-4456, FAX (804) 527-4472, or email caroline.juran@dhp.virginia.gov.

Basis: Regulations of the Board of Pharmacy are promulgated under the general authority of § 54.1-2400 of the Code of Virginia. Regulations governing the distribution and dispensing of drugs are promulgated under the authority of § 54.1-3307 of the Code of Virginia.

Purpose: The purpose of this regulatory action is to update regulations for utilization of newer technologies in the practice of pharmacy in a hospital system and to facilitate time for pharmacists to be more involved in direct patient care. A pilot for remote verification involving more than a dozen facilities has been approved by the board and has been shown to protect the health and safety of the drug supply and patients in hospitals.

Substance: Amendments (i) allow a pharmacist at a warehouser or wholesale distributor to verify Schedule VI drugs to be placed in specific automated dispensing devices prior to delivery of the drugs to a hospital; (ii) remove the requirement of the hospital pharmacist to verify Schedule VI drugs in these circumstances and remove the requirement that the hospital pharmacist initial the delivery record; (iii) require the warehouser or wholesale distributor to maintain a record of distributed Schedule VI drugs; and (iv) require the hospital to maintain records regarding the barcode scanning rate, the bedside scanning rate, and any errors in drug product received from the warehouser or wholesale distributor. A pharmacist or pharmacy technician may load the Schedule VI drugs specified in the delivery order.

Issues: The advantage to the public will be use of newer technologies in the practice of pharmacy in a hospital system and more availability of hospital pharmacists to be involved in direct patient care. A pilot program in more than a dozen facilities has utilized this technology, which has been shown to protect the health and safety of the public. There are no primary advantages or disadvantages to the agency or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. In response to a petition for rulemaking, the Board of Pharmacy (board) proposes to incorporate certain allowances into the regulation that have been piloted and shown to be safe and effective. Specifically, the proposed amendments would allow (i) a pharmacist at a central distribution company to verify the Schedule VI drugs² that will be placed into an automated dispensing device (ADD) at a hospital, prior to delivery of the drugs to the receiving hospital, and (ii) pharmacy technicians at the receiving hospital to load the drugs directly into the ADD without further verification by a pharmacist at the hospital.

Background. In May 2021, the board received a petition to amend 18VAC110-20-460 and 18VAC110-20-490 so as to allow a pharmacist at a central distribution company to verify the Schedule VI drugs to be placed in an ADD prior to delivery of the drugs to the receiving hospital, and pharmacy technicians at the receiving hospital to load the drugs directly into the ADD without further verification by a pharmacist at the hospital.³ The petition received 40 comments, representing a number of Virginia hospitals, all in favor of the request. Commenters specifically cited the increased efficiency of using a centralized distribution model and the resulting time savings for pharmacists and pharmacy technicians at the hospitals as their primary rationale in supporting the petition. Subsequently, the board voted unanimously to accept the petition and initiate rulemaking regarding the two sections.⁴

18VAC110-20-460 currently requires all Schedule II-VI drugs delivered to a hospital unit as floor-stock to be checked by a pharmacist before the drugs leave the hospital pharmacy. 18VAC110-20-490, which contains general provisions for the use of ADDs at hospital pharmacies, currently requires pharmacist verification for all drugs removed from the pharmacy to be placed in an ADD. The board proposes to amend 18VAC110-20-490 to add a subsection addressing the Distribution of drugs from a central warehouser or wholesale distributor specifically for use in ADDs and to amend 18VAC110-20-460 by adding an exception for drugs covered by this new subsection.

The new subsection (18VAC110-20-490 D) would require the central warehouser or wholesale distributor to have an onsite Virginia-licensed pharmacist (i) verify the accuracy of all Schedule VI drugs to be placed in an ADD prior to delivery of the drugs to the hospital pharmacy and (ii) perform barcode linking of any drug to the related drug files in the hospital information system and automated dispensing device. In addition, the warehouser or distributor would be required to maintain a record of all Schedule VI drugs distributed to a hospital for placement in each specific ADD and to provide an invoice to each hospital pharmacy indicating the drugs delivered to the hospital to be placed in a specific ADD. The recordkeeping requirements would include the date; drug name, dosage form, and strength; quantity; hospital name; hospital unit and a unique identifier for the specific ADD receiving the drug.

The new subsection would also specifically exempt the hospital pharmacist from the current requirements in sections 18VAC110-20-460 and 18VAC110-20-490 regarding verification of and initialing for drugs leaving the pharmacy to be placed in an ADD. Pharmacists or pharmacy technicians loading the ADD would instead be required to scan the drugs as they are loaded into the ADD and initial the delivery record. Hospitals receiving drugs from the warehouser or distributor would be required to maintain a 90% barcode scanning rate for restocking ADDs.⁵ If the scanning rate for restocking ADDs is less than 90% for any quarter, the receiving pharmacy would have to immediately reinstitute a 100% pharmacist verification process until a 90% scanning rate is achieved and documented in a subsequent quarter. To implement these security measures, receiving hospital pharmacies would be required to maintain quarterly reports of the restocking barcode scanning rate, bedside barcode scanning rate, and any errors in drug product received from the warehouser or distributor.

Section 54.1-3434.02 A 5 of the Code of Virginia authorizes use of ADDs only when the pharmacist-in-charge (PIC) of a pharmacy located within the hospital, or the PIC of any outside pharmacy providing pharmacy services to the hospital, is held accountable for the drugs dispensed from the ADD.⁶ Section 54.1-3434.02 A 6 requires the filling and stocking of all drugs in ADDs to be performed under the direction of the PIC who is an employee of the provider pharmacy and for the PIC to be responsible for proper and accurate stocking and filling of the ADD. Thus, the proposed amendments aim to provide the flexibility requested in the petition by allowing verification to take place at the warehouse while ensuring that PICs meet statutory standards by requiring barcode linking and electronic inventory tracking of each drug.

Estimated Benefits and Costs. The proposed amendments would primarily benefit hospitals that use ADDs and the pharmacists and pharmacy technicians employed by those hospitals. As indicated by a number of commenters in favor of the petition, manually verifying every unit of every drug that is placed in an ADD is both time consuming and error-prone in a busy work environment where the hospital pharmacy staff may have competing demands on their time. In addition, Schedule VI drugs are the least restricted category and often the most prescribed, meaning they have to be restocked in ADDs more frequently compared to Schedules II through V drugs. Allowing a pharmacist at the warehouse to do the manual verification and barcode linking reduces the time hospital pharmacists and pharmacy technicians must spend in stocking ADDs without increasing the risk of drug loss or misuse. These changes would allow hospital pharmacists and pharmacy technicians to spend more of their time working directly with patients.

Hospitals that choose to use ADDs for Schedule VI drugs and the warehousers or wholesale distributors that supply these drugs to them would have to invest some time and effort to implement the requirements of the regulation. Specifically, warehousers or distributors would need to employ or arrange for licensed pharmacists to conduct the onsite verification and barcode linking. They would also need to implement systems for recordkeeping and invoicing as required in the proposed text. Hospitals using ADDs would have to share access to their drug inventory management system and perhaps train the pharmacist at the warehouse or distribution center to do the barcode linking accurately.

It should be noted that the regulation does not require warehousers or wholesale distributors of Schedule VI drugs to take any action unless they supply to a hospital that wants to take advantage of these allowances, in which case any compliance costs would likely be passed on to that hospital. Large hospital chains may run their own warehouse and thus pay for the compliance costs directly. Smaller hospitals that use ADDs may contract with warehouses that are either run by these larger hospital chains or by large pharmacies and would pay for the warehouser's compliance costs indirectly. In either case, the cost of implementing these requirements for the warehouse would either directly or indirectly be incurred by hospitals using ADDs, and those hospitals would choose to make this investment based on the expected time savings for their pharmacy staff.

Businesses and Other Entities Affected. The Department of Health Professions (DHP) reports that there are roughly 100 hospitals in Virginia, and that a large hospital may have as many as 75 to 100 ADDs.⁷ 26 hospitals have already participated in a pilot program to test these requirements and have reported 99% barcode scanning rates for restocking and at the bedside.⁸ There are 121 licensed warehousers and 61 wholesale distributors. However, DHP reports that many warehousers may not possess drugs that lend themselves to this purpose and many only possess medical gases. It is unclear how many of the wholesale distributors would be affected by the proposed changes.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁹ An adverse impact is indicated if there is any increase in net cost or reduction in net revenue for any entity, even if the benefits exceed the costs for all entities combined. As noted, the proposed amendments do not create any new costs for central warehousers or wholesale distributors that could not be directly recouped from hospitals. Additionally, participation is voluntary. Thus, an adverse impact is not indicated.

Small Businesses¹⁰ Affected.¹¹ The proposed amendments could affect some hospitals, central warehousers, or wholesale distributors that may be small businesses if they use ADDs and elect to implement a centralized warehouse-based system for verification of Schedule VI drugs to stock ADDs.¹² However, since the proposed amendments do not create new costs for small businesses unless they choose to enter into an arrangement where Schedule VI drugs for ADDs are verified at a warehouse, an adverse economic impact is not indicated for small businesses.

Localities¹³ Affected.¹⁴ The proposed amendments do not appear to disproportionately affect any particular localities or introduce costs for local governments. Accordingly, an adverse economic impact is not indicated.

Projected Impact on Employment. The proposed amendments do not appear to affect total employment in the short run. Comments in favor of the petition state that these changes would free pharmacists from routine restocking tasks and thereby enable them to spend more time engaging with patients directly and providing clinical services. The magnitude of time savings for hospitals is unlikely to be large enough to result in layoffs for pharmacists or pharmacy technicians.

Effects on the Use and Value of Private Property. The proposed amendments could modestly increase the value of hospitals using ADDs by lowering pharmacy operation costs. The proposed amendments could also increase the value of some wholesalers or distributors based on their compensation for providing on-site verification and recordkeeping as value-adding services for supplying Schedule VI drugs to hospitals that use ADDs. The proposed amendments do not affect real estate development costs.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² Schedule VI drugs are the least restricted category of scheduled drugs. They represent the lowest potential for abuse while still requiring a prescription. See https://law.lis.virginia.gov/vacode/title54.1/chapter34/section54.1-3455/.

³ See https://townhall.virginia.gov/L/viewpetition.cfm?petitionid=344.

⁴ Minutes of the Board September 24, 2021 meeting: https://townhall.virginia.gov/L/ GetFile.cfm?File=Meeting\30\33096\Minutes_DHP_33096_v2.pdf.

⁵ This threshold and the measures to be followed if the threshold is not maintained were included in the pilot program and would be replicated as is in the regulation. See, for example, https://townhall.virginia.gov/L/GetFile.cfm?File=meeting\30\22759\Minutes_DHP_22759_v2.pdf for details about the pilot.

⁶ See https://law.lis.virginia.gov/vacode/title54.1/chapter34/section54.1-3434.02/.

⁷ Agency Background Document (ABD) p. 58.

⁸ Email from DHP dated August 9, 2022. The pilot involved multiple hospitals under shared ownership that had their own central warehouse.

⁹Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

¹⁰Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

¹¹If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

¹² Hospitals may operate as a non-profit rather than a traditional business, but would otherwise meet the criteria for small businesses as defined in footnote 8.

¹³"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

¹⁴Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The Board of Pharmacy concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

In response to a petition for rulemaking, the proposed amendments allow (i) a pharmacist at a central distribution company to verify Schedule VI drugs to be placed in an automated dispensing device prior to delivery to the receiving hospital and (ii) pharmacy technicians at the hospital to load the drugs directly into the automated dispensing device without further verification by a pharmacist at the hospital.

18VAC110-20-460. Floor stock drugs; proof of delivery; distribution records.

A. A Except as provided in 18VAC110-20-490 D, a pharmacist shall check all Schedule II-VI Schedules II through VI drugs delivered to a hospital unit as floor-stock before the drugs leave the pharmacy and shall initial or sign manually or electronically the record of distribution verifying the accuracy of the distribution.

B. A delivery receipt shall be obtained for Schedule Schedules II through V drugs supplied as floor stock. This record shall include the date, drug name and strength, quantity, hospital unit receiving the drug, and the manual or electronic signatures of the dispensing pharmacist and the receiving nurse.

C. A record of disposition/administration disposition or administration shall be used to document administration of Schedule Schedules II through V drugs when a floor stock system is used for such drugs. The record shall be returned to the pharmacy within three months of its issue. The PIC or his the PIC's designee shall:

1. Match returned records with delivery receipts to verify that all records are returned;

2. Periodically audit returned administration records for completeness as to patient's names, dose, date and time of administration, signature or initials of person administering the drug, and date the record is returned;

3. Verify that all additions to inventory are recorded, that all additions to and deductions from inventory are correctly calculated, that sums carried from one record to the next are correctly recorded, and periodically verify that doses documented on administration records are reflected in the medical record; and

4. Initial the returned record.

D. All records required by this section shall be filed chronologically by date of issue, and retained for two years from the date of return at the address of the pharmacy. Schedule VI records may be maintained in offsite storage or as an electronic image that provides an exact image of the document that is clearly legible, provided such offsite or electronic storage is retrievable and made available for inspection or audit within 48 hours of a request by the board or an authorized agent. Schedule II-V Schedules II through V records may only be stored offsite off site or electronically as described in this subsection if authorized by DEA or in federal law or regulation. The filing requirements of 18VAC110-20-240 A 1 for separation of Schedule II records shall be met for administration records if the Schedule II drugs are listed in a separate section on a page that contains other schedules of drugs.

18VAC110-20-490. Automated devices for dispensing and administration of drugs.

A. A hospital may use automated devices for the dispensing and administration of drugs pursuant to § 54.1-3301 of the Code of Virginia and §§ 54.1-3401 and 54.1-3434.02 of the Drug Control Act and in accordance with 18VAC110-20-270, 18VAC110-20-420, or 18VAC110-20-460 as applicable.

B. Policy and procedure manual; access codes.

1. Proper use of the automated dispensing devices and means of compliance with requirements shall be set forth in the pharmacy's policy and procedure manual, which shall include provisions for granting and terminating user access.

2. Personnel allowed access to an automated dispensing device shall have a specific access code that records the identity of the person accessing the device. The device may verify access codes using biometric identification or other coded identification after the initial log-on in order to eliminate sharing or theft of access codes.

C. Distribution of drugs from the pharmacy.

1. Prior to removal of drugs from the pharmacy, a delivery record shall be generated for all drugs to be placed in an automated dispensing device. The delivery record shall include the date; drug name, dosage form, and strength; quantity; hospital unit and a unique identifier for the specific device receiving the drug; initials of the person loading the automated dispensing device; and initials of the pharmacist checking the drugs to be removed from the pharmacy and the delivery record for accuracy.

2. At the time of loading any Schedules II through V drug, the person loading will verify that the count of that drug in the automated dispensing device is correct. Any discrepancy noted shall be recorded on the delivery record and immediately reported to the pharmacist in charge, who shall be responsible for ensuring reconciliation of the discrepancy or properly reporting of a loss.

D. Distribution of drugs from a central warehouser or wholesale distributor. Notwithstanding subdivision C 1 of this section, a central warehouser or wholesale distributor may distribute Schedule VI drugs to hospitals to be placed in specific automated dispensing devices under the following conditions:

1. A pharmacist licensed in Virginia employed by or otherwise working at the central warehouser or wholesale distributor shall verify the accuracy of all Schedule VI drugs to be placed in specific automated dispensing devices within the hospital prior to delivery of the drugs directly to the hospital pharmacy;

2. A pharmacist at the hospital pharmacy shall not be required to (i) verify the accuracy of these drugs prior to leaving the hospital pharmacy for delivery to the hospital unit as floor stock as required in 18VAC110-20-460 A or (ii) initial the delivery record as required in subdivision C 1 of this section;

3. The central warehouser or wholesale distributor shall maintain a record of all Schedule VI drugs distributed to a hospital for placement in a specific automated dispensing device. The record shall include the date; drug name, dosage form, and strength; quantity; hospital name; hospital unit and a unique identifier for the specific automated dispensing device receiving the drug; and initials of the pharmacist employed by or working at the central warehouser or wholesale distributor who is responsible for verifying the drugs for accuracy;

4. The central warehouser or wholesale distributor shall provide an invoice to each hospital pharmacy that indicates in which specific automated dispensing device the drugs delivered to the hospital are to be placed;

5. A pharmacist or pharmacy technician at each hospital shall load the drugs into the specific automated dispensing device after scanning each unit, and the hospital pharmacy shall maintain a record that consists of the initials of the person loading the automated dispensing device;

6. A pharmacist licensed in Virginia employed by or otherwise working at the warehouser or wholesale distributor shall perform barcode linking of any drug to the related drug files in the hospital information system and automated dispensing device;

7. Each hospital receiving drugs from the central warehouser or wholesale distributor shall maintain at least a 90% barcode scanning rate for restocking automated dispensing devices. If the scanning rate for restocking the automated dispensing device is less than 90% for any quarter, the pharmacy at the hospital shall immediately reinstitute a 100% pharmacist verification process at the receiving pharmacy until a 90% scanning rate for a subsequent quarter is achieved and documented; and

8. The hospital pharmacy receiving such services from a central warehouser or wholesale distributor shall maintain quarterly reports containing the hospital's restocking barcode scanning rate, bedside barcode scanning rate, and any errors in drug product received from the central warehouser or wholesale distributor.

D. E. Distribution of drugs from the device.

1. Automated dispensing devices in hospitals shall be capable of producing a hard-copy record of distribution that shall show patient name, drug name and strength, dose withdrawn, date and time of withdrawal from the device, and identity of person withdrawing the drug. The record shall be filed in chronological order from date of issue or maintained electronically.

2. If an automated dispensing device is used to obtain drugs for dispensing from an emergency room, a separate dispensing record is not required, provided the automated record distinguishes dispensing from administration and records the identity of the physician who is dispensing.

E. F. Discrepancy reports. A discrepancy report for all Schedules II through V drugs and any drugs of concern, as defined in § 54.1-3456.1 of the Code of Virginia, shall be generated for each discrepancy in the count of a drug on hand in the device. Each such report shall be initiated or resolved by the PIC or his the PIC's designee within 72 hours of the time the discrepancy was discovered or, if determined to be a theft or an unusual loss of drugs, shall be immediately reported to the board in accordance with § 54.1-3404 E of the Drug Control Act.

F. G. Reviews and audits.

1. The PIC or his the PIC's designee shall conduct at least a monthly review for compliance with written policy and procedures that are consistent with § 54.1-3434.02 A of the Drug Control Act for security and use of the automated dispensing devices, to include procedures for timely termination of access codes when applicable, accuracy of distribution from the device, and proper recordkeeping.

2. The PIC or his the PIC's designee shall conduct at least a monthly audit to review distribution of Schedules II through V drugs from each automated dispensing device as follows:

a. The audit shall reconcile records of all quantities of Schedules II through V drugs dispensed from the pharmacy with records of all quantities loaded into each device to detect whether any drug recorded as removed from the pharmacy was diverted rather than placed in the proper device.

b. If a pharmacy has an ongoing method for perpetually monitoring drugs in Schedules II through V to ensure drugs dispensed from the pharmacy have been loaded into the device and not diverted, such as with the use of perpetual inventory management software, then the audit required in this subsection may be limited to the discrepancies or exceptions as identified by the method for perpetually monitoring the drugs.

3. The PIC or his the PIC's designee shall conduct at least a monthly audit to review the dispensing and administration records of Schedules II through V drugs from each automated dispensing device as follows:

a. The audit shall include a review of administration records for each device per month for possible diversion by fraudulent charting. The review shall include all Schedules II through V drugs administered for a time period of not less than 24 consecutive hours during the audit period.

b. The hard-copy distribution and administration records printed out and reviewed in the audit shall be initialed and dated by the person conducting the audit. If nonpharmacist personnel conduct the audit, a pharmacist shall review the record and shall initial and date the record.

c. The PIC or his the PIC's designee shall be exempt from requirements of this audit if reconciliation software that provides a statistical analysis is used to generate reports at least monthly. The statistical analysis shall be based on:

(1) Peer-to-peer comparisons of use for that unit or department; and

(2) Monitoring of overrides and unresolved discrepancies.

d. The report shall be used to identify suspicious activity, which includes usage beyond three standard deviations in peer-to-peer comparisons. A focused audit of the suspicious activity and individuals associated with the activity shall be performed whenever suspicious activity is identified from the reports.

4. The PIC or his the PIC's designee shall maintain a record of compliance with the reviews and audits in accordance with subsection H I of this section.

G. H. Inspections. Automated dispensing devices shall be inspected monthly by pharmacy personnel to verify proper storage, proper location of drugs within the device, expiration dates, the security of drugs, and validity of access codes. The PIC or his the PIC's designee shall maintain documentation of the inspection in accordance with subsection H I of this section. With the exception of a monthly physical review of look-alike and sound-alike drugs stored within matrix drawers or open access areas within the device, such monthly inspection shall not require physical inspection of the device if the device is capable of and performs the following:

1. At least daily monitoring of refrigerator or freezer storage with documented temperature ranges, variances, and resolutions;

2. Automatic identification and isolation of the location of each drug within the device using a machine readable product identifier, such as barcode technology, and generation of a report verifying the applicable settings;

3. Electronic tracking of drug expiration dates and generation of proactive reports allowing for the replacement of drugs prior to their expiration date; and

4. Electronic detection of the opening of the device, identification of the person accessing the device, automatic denial of access to the device during malfunctions and mechanical errors, and generation of reports of any malfunction and mechanical error.

H. I. Records.

1. All records required by this section shall be maintained for a period of not less than two years. Records required to be maintained by the pharmacy shall be maintained at the address of the pharmacy providing services to the hospital except manual. Records required to be maintained by the warehouser or wholesale distributor shall be maintained at the address of the applicable facility. Manual Schedule VI distribution records, reports auditing for indications of suspicious activity, and focused audits, all of which and records required to be maintained by the warehouser or wholesale distributor distributing Schedule VI drugs to specific automated dispensing devices may be maintained in offsite storage or electronically as an electronic image that provides an exact image of the document that is clearly legible, provided such offsite or electronic records are retrievable and made available for inspection or audit within 48 hours of a request by the board or an authorized agent.

2. Distribution and delivery records and required initials may be generated or maintained electronically, provided:

a. The system being used has the capability of recording an electronic signature that is a unique identifier and restricted to the individual required to initial or sign the record.

b. The records are maintained in a read-only format that cannot be altered after the information is recorded.

c. The system being used is capable of producing a hard-copy printout of the records upon request.

3. Schedules II through V distribution and delivery records may also be stored off site or electronically in compliance with requirements of subdivision 1 of this subsection and if authorized by DEA or in federal law or regulation.

4. Hard-copy distribution and administration records that are printed and reviewed in conducting required audits may be maintained at an off-site location or electronically, provided they can be readily retrieved upon request; provided they, are maintained in a read-only format that does not allow alteration of the records;, and provided a separate log is maintained for a period of two years showing dates of audit and review, the identity of the automated dispensing device being audited, the time period covered by the audit and review, and the initials of all reviewers.