S2352

An Act concerning counterfeit drugs and medical devices and amending P.L.2019, c.339.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.2019, c.339 (C.2C:35-11.1) is amended to read as follows:

1. a. A person who knowingly creates, distributes, dispenses. administers, installs, implants, possesses, or has under the person's control with intent to distribute a counterfeit drug or medical device, adulterated drug or medical device, or misbranded drug or medical device:

(1) in an amount of four or fewer dosage units; one container or labeling of a counterfeit drug, adulterated drug, or misbranded drug is guilty of a crime of the fourth degree;

(2) in an amount of at least five but fewer than 100 dosage units; at least two but fewer than five containers or labelings of a counterfeit drug, adulterated drug, or misbranded drug; or one counterfeit medical device, adulterated medical device, or misbranded medical device is guilty of a crime of the third degree;

[and]

(3) in an amount of 100 or more dosage units; five or more containers or labelings of a counterfeit drug, adulterated drug, or misbranded drug; or two or more counterfeit medical devices, adulterated medical devices, or misbranded medical devices is guilty of a crime of the second degree ; and

(4) in any amount of dosage units; any number of containers or labelings of a counterfeit drug, adulterated drug, or misbranded drug; or any number of counterfeit medical devices, adulterated medical devices, or misbranded medical devices, is guilty of a crime of the second degree if the act occurs during a declared state of emergency;

b. In addition to penalties that may be imposed under subsection a. of this section or N.J.S.2C:35-15, a violation of this section shall be punishable by a penalty of not less than $1,000 and not more than $10,000 for each violation. For the purposes of paragraph (4) of subsection a. and subsection d. of this section, the penalty shall be imposed for each dosage unit, container, or labeling of a counterfeit, adulterated, or misbranded drug, or each counterfeit, adulterated, or misbranded medical device involved in the commission of the crime.

c. Notwithstanding the definitions set forth in N.J.S.2C:35-2, as used in this section:

"Adulterated" means a drug or medical device that is adulterated pursuant to R.S.24:5-10.

“Agent” means an authorized person who acts on behalf of or at the direction of another person or entity.

“Broker” means any person engaged in the business of soliciting or negotiating the sale, resale, exchange, or shipment of drugs or medical devices.

"Container" means vial, bottle, can, jar, tube, package, or any other receptacle.

"Counterfeit" means a drug or medical device or the container or labeling of a drug or medical device that, without authorization, bears the trademark, trade name, or other identifying mark, imprint, or device or any likeness thereof of a drug or medical device manufacturer, processor, packer, or distributor other than the person who in fact manufactured, processed, packed, or distributed the medical device and that falsely purports or is represented to be the product of, or to have been packed or distributed by, the drug or medical device manufacturer, processor, packer, or distributor whose trademark, trade name, or other identifying mark, imprint, or device or likeness thereof appears on the drug or medical device or its container or labeling.

"Drug" means any medication approved by the federal Food and Drug Administration.

"Label" means a display of written, printed, or graphic matter upon the immediate container of any drug.

"Labeling" means all labels and other written, printed or graphic matter (1) upon a drug or any of its containers or wrappers, or (2) accompanying such drug or container.

"Medical device" means any device approved by the federal Food and Drug Administration.

"Misbranded" means a drug or medical device with respect to which the label is: false or misleading in any particular; does not bear the name and address of the manufacturer, packer, or distributor and does not have an accurate statement of the quantities of the active ingredients; or does not show an accurate monograph for legend drugs; or is misbranded based upon other considerations as provided in the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. s.301 et seq.

d. A person, including but not limited to an agent or a broker, who derives a pecuniary benefit from a violation of paragraph (4) of subsection a. of this section is guilty of a crime of the second degree.

(cf: P.L.2019, c.339, s.1)

2. This act shall take effect immediately.

STATEMENT

This bill enhances penalties related to the distribution of counterfeit, adulterated, or misbranded drugs or medical devices during a declared state of emergency.

Under current law, a person who knowingly creates, distributes, dispenses, administers, installs, implants, possesses, or has under the person's control with intent to distribute a counterfeit, adulterated, or misbranded drug or medical device commits a crime. The degree of the crime can be second, third, or fourth degree, depending on the number of: (1) dosage units of drugs; (2) containers or labelings of drugs; or (3) the number of medical devices involved in the commission of the crime.

Under the provisions of this bill, during a declared state of emergency, an offense would be a second degree crime, irrespective of the number of units or items involved. The bill also specifies that during a declared state of emergency, any person, including an agent or a broker, who derives a pecuniary benefit from a violation of the provisions of this bill would be guilty of a crime of the second degree. The bill defines an “agent” as an authorized person who acts on behalf of or at the direction of another person or entity; and a “broker” as any person engaged in the business of soliciting or negotiating the sale, resale, exchange, or shipment of drugs or medical devices. A crime of the second degree is punishable by a term of imprisonment of five to 10 years, a fine of up to $150,000, or both.

Additionally, current law provides a penalty of not less than $1,000 and not more than $10,000 for each violation. The provisions of the bill specify that the penalty will be assessed for each dosage unit, container, or labeling of a counterfeit, adulterated, or misbranded drug or each counterfeit, adulterated, or misbranded medical device involved in the commission of the crime during a declared state of emergency. These penalty monies are deposited into the “Drug Enforcement and Demand Reduction Fund,” established pursuant to subsection c. of N.J.S.2C:35-15.