Assigned to HHS FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
FACT SHEET FOR S.B. 1234
pharmacy board; virtual manufacturers
Purpose
Outlines requirements for a virtual manufacturer of prescription drugs or devices when
contracting with a physical manufacturer and defines the term virtual manufacturer.
Background
The U.S. Food and Drug Administration (FDA) regulates the quality of drug products by
monitoring drug manufacturers' compliance with Current Good Manufacturing Practice (CGMP)
regulations. The CGMP regulations for drugs contain minimum requirements for the methods,
facilities and controls used in manufacturing, processing and packaging a drug product. The
approval process for new and generic drug marketing applications includes a review of the
manufacturer's compliance with the CGMP. FDA assessors and investigators determine whether
an applicant has the necessary facilities, equipment and ability to manufacture the drug it intends
to market (FDA).
Virtual manufacturer means an entity that contracts for the manufacture of a drug or device
for which the entity: 1) owns the new drug application or abbreviated new drug application
number, as defined by the FDA, for a drug; 2) owns the unique device identification number, as
defined by the FDA, for a prescription device; 3) is not involved in the physical manufacture of
the drug or device; and 4) contracts with an Arizona-permitted manufacturing entity for the
physical manufacture of the drug or device. If the contracted manufacturing entity is located in a
different country, the virtual manufacturer must ensure the facility is inspected every time the
virtual manufacturer submits an initial or renewal application and determine the contracted
manufacturing entity complies with CGMP regulations. Virtual manufacturer includes an entity
that may be identified as an own-label distributor, which contracts with a manufacturer to produce
a drug or device and with another entity to package and label the drug or device (A.A.C. R4-23-
110).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Requires a virtual manufacturer located in Arizona, or that is responsible for shipping
prescription drugs or devices into Arizona, to make reasonable efforts to ensure that the
contracted, physical manufacturer of the prescription drug or device complies with CGMP
regulations. FACT SHEET
S.B. 1234
Page 2
2. Requires a virtual manufacturer of prescription drugs to contract with a physical drug
manufacturer that is permitted by the State of Arizona, unless the manufacturer is located in a
different country.
3. Defines virtual manufacturer as an entity that contracts for the manufacture of a drug or device,
including a private label distributor, and that meets the following conditions:
a) owns either the new drug application or abbreviated drug application number assigned by
the FDA for a drug or the unique identification number assigned by the FDA for a
prescription device;
b) is not involved with the physical manufacture of the drug or device; and
c) contracts with a manufacturing entity that is registered with the FDA for the physical
manufacture of the drug or device.
4) Makes conforming changes.
5) Becomes effective on the general effective date.
Prepared by Senate Research
February 2, 2024
MM/KS/slp