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

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

Public Hearing Information:

June 18, 2013 - 9:15 a.m. - Department of Health Professions, Perimeter Center, 9960 Mayland Drive, Suite 201, Board Room 2, Richmond, VA

Public Comment Deadline: August 2, 2013.

Agency Contact: Caroline Juran, RPh, Executive Director, Board of Pharmacy, 9960 Mayland Drive, Suite 300, Richmond, VA 23233-1463, telephone (804) 367-4416, FAX (804) 527-4472, or email caroline.juran@dhp.virginia.gov.

Basis: Regulations are promulgated under the general authority of Chapter 24 (§ 54.1-2400 et seq.) of Title 54.1 of the Code of Virginia. Section 54.1-2400 authorizes the Board of Pharmacy to promulgate regulations in accordance with the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia) that are reasonable and necessary to administer effectively the regulatory system.

The specific statutory authority for the Board of Pharmacy to regulate the practice of pharmacy, including regulations pertaining to the safety and integrity of drugs, is found in § 54.1-3307 of the Code of Virginia.

Purpose: The Board of Pharmacy received three petitions from hospital pharmacists requesting an amendment to 18VAC110-20-490. As one of the petitioners stated, automation has been designed and updated to improve drug storage, security, and safety while streamlining work processes and increasing efficiencies. Advancements in technology can accommodate verification requirements that currently require manual processes. The board has adopted changes to the process and parameters to decrease the amount of time required to comply with monthly audits. Certain software that analyzes automated dispensing machine transactions could substitute for some of the manual reconciliation process. Hospitals report that the software reports can more quickly and efficiently identify possible diversions from the machines. Taking advantage of technology to replace some of the manual processes appears to be advisable for public health and safety because it could allow pharmacists to spend more time focused on patient care and still continue to protect against diversion and to ensure drug security.

Substance: The petitioners requested modifications to 18VAC110-20-490 to change the requirement that automated dispensing devices (ADDs) must be manually 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 proposed regulations reorganize requirements for use of ADDs in hospitals to clarify the process and also provide exceptions from certain audits for devices with technology capable of monitoring, detection, reconciliation, and analysis.

Issues: The proposed changes are a significant advantage to pharmacists and the hospitals in which they work. If pharmacists are able to substitute electronic monitoring and reporting for manual procedures, the hours spent in compliance with current regulations can be redirected to tasks associated with patient care. The board does not perceive any disadvantages or risks associated with substitution of manual audits and inspections with reconciliation software that can detect possible diversion.

There are no advantages or disadvantages to the agency; pharmacy inspections will continue to include records required for automated dispensing devices.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As a result of several petitions for rulemaking, the Board of Pharmacy (Board) proposes to amend its regulations to make requirements for verification of storage, location, expiration dates, drug security and access codes for automated dispensing devices (ADD) less burdensome. Specifically, the Board proposes to:

1) Re-organize the regulations so the rules for using ADDs are clear;

2) Make a distinction between audits and reviews (these words are used interchangeably in the current regulations) so that it is clear to pharmacies when they must take each action;

3) Allow pharmacies whose ADDs have the capacity to perpetually monitor schedule II-V drugs to limit their required monthly audit so that they are just auditing discrepancies or exceptions identified through the ADDs perpetual monitoring systems and

4) Provide an exception to the rules that require monthly inspection of ADDs to check proper storage, location of drugs, expiration dates and security of drugs within the ADD as well as the validity of access codes to dispense those drugs. Under these proposed regulations, pharmacies may forgo most parts of this monthly inspection so long as the ADD is capable of performing self-inspections that meet criteria set by the Board.

Result of Analysis. Benefits likely outweigh costs for implementing these proposed changes.

Estimated Economic Impact. Among the changes that the Board proposes for these regulations is a reorganization of the requirements for use of automated dispensing devises (ADD). These changes have no costs attached for any affected entities because no requirements are changing. Affected entities may, however, benefit from these changes as they make the requirements for ADD use easier to find or understand.

Currently, Board staff reports, these regulations use the terms audit and review interchangeably. As this can lead to confusion, the Board proposes to separate usage of these terms in the regulatory text so that affected entities clearly know when they need to perform an audit and when they need to perform a review. Again, these changes will not impose any extra burden on any regulated entity so these entities will likely not incur any extra costs. To the extent that the current text is opaque as to what is required of affected entities, they will get the benefit of additional clarity from the changes that the Board now proposes.

Current regulations require a monthly audit to review distribution and administration of Schedule II through V drugs from any ADD. The Board proposes to allow pharmacies whose ADDs have perpetual inventory management software to only audit dispensing discrepancies and exceptions that are identified by the ADDs. Further, the Board proposes an exemption to monthly administration audits so long as the ADD reconciliation software provides a statistical analysis based on peer-to-peer comparisons of use for the ADD unit or department and the software provides monitoring of overrides and discrepancies. If suspicious activity is identified by the monthly reports generated through these statistical analyses, that activity would then be subject to a focused audit. Hospital pharmacies that have ADDs with software that would allow them to just audit discrepancies and suspicious behavior will likely benefit from staff time saved from having to perform monthly audits.

Current regulations require monthly inspections of ADDs to check proper storage, location of drugs, expiration dates and security of drugs within the ADD as well as the validity of access codes to dispense those drugs. The Board proposes an exemption to most parts of these inspections for ADDs so long as the ADD software performs: 1) at least daily monitoring of temperature controlled storage, 2) automatic identification and isolation of the location of each drug within the devise, 3) electronic tracking of drug expiration dates and 4) electronic detection of when, and by whom, the devise is opened. Pharmacies that meet the criteria for this exemption will still have to perform inspections of look-alike and sound-alike drugs within matrix drawers or open access areas of each ADD. These changes will again likely benefit affected hospital pharmacies by allowing less staff time to be used performing inspections.

Businesses and Entities Affected. The Department of Health Professions (DHP) reports that these proposed regulations will affect all hospital pharmacies that dispense drugs with ADDs. DHP does not know how many pharmacies that would be because the Board does not license pharmacies by type of practice.

Localities Particularly Affected. No locality will be particularly affected by these proposed regulations.

Projected Impact on Employment. This proposed regulatory action is unlikely to have any effect on employment in the Commonwealth.

Effects on the Use and Value of Private Property. These proposed regulatory changes are unlikely to affect the use or value of private property in the Commonwealth.

Small Businesses: Costs and Other Effects. No small business is likely to incur any costs on account of this regulatory action.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No small business is likely to incur any costs on account of this regulatory action.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate. 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 Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

Agency's Response to Economic Impact Analysis: The Board of Pharmacy concurs with the analysis of the Department of Planning and Budget on proposed amended regulations for 18VAC110-20, Regulations Governing the Practice of Pharmacy, relating to regulations for automated dispensing devices.

Summary:

As a result of several petitions for rulemaking, the Board of Pharmacy proposes to (i) reorganize the regulations for using automated dispensing devices (ADDs) for clarity; (ii) distinguish "audits" from "reviews" so pharmacies understand more clearly when each action is required; (iii) limit the required monthly audit for ADDs with perpetual monitoring systems to discrepancies or exceptions identified through the ADDs; and (iv) provide an exception to the monthly inspection of ADDs if the ADD is capable of performing self-inspections that meet criteria set by the board.

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. The following conditions shall apply:

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.

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 which 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 Schedule 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 reconciliation of the discrepancy or properly reporting of a loss.

D. Distribution of drugs from the device.

3. 1. Automated dispensing devices in hospitals shall be capable of producing a hard-copy record of distribution which shall show patient name, drug name and strength, dose withdrawn, dose to be administered, 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.

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. Discrepancy reports. A discrepancy report shall be generated for each discrepancy in the count of a drug on hand in the device. Each such report shall be resolved by the PIC or his 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. Reviews and audits.

1. The PIC or his 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.

4. 2. The PIC or his designee shall conduct at least a monthly audit to review distribution and administration of Schedule II through V drugs from each automated dispensing device as follows:

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

b. A discrepancy report shall be generated for each discrepancy in the count of a drug on hand in the device. Each such report shall be resolved by the PIC or his 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 If a pharmacy has an ongoing method for perpetually monitoring drugs in Schedule 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 designee shall conduct at least a monthly audit to review administration of Schedule II through V drugs from each automated dispensing device as follows:

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

d. The audit shall include a check of medical records to ensure that a valid order exists for a random sample of doses recorded as administered.

e. The audit shall also check for compliance with written procedures for security and use of the automated dispensing devices, accuracy of distribution from the device, and proper recordkeeping.

f. 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.

5. 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.

c. The PIC or his 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, but is not limited to, 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 designee shall maintain a record of compliance with the reviews and audits in accordance with subsection H of this section.

6. G. 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 designee shall maintain documentation of the inspection in accordance with subsection H 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. Records.

7. Personnel allowed access to an automated dispensing device shall have a specific access code which records the identity of the person accessing the device.

8. 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.

9. 1. All records required by this section shall be filed in chronological order from date of issue and maintained for a period of not less than two years. Records shall be maintained at the address of the pharmacy providing services to the hospital except: a. Manual manual Schedule VI distribution records, reports auditing for indications of suspicious activity, and focused audits, all of which 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.

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

(1) 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.

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

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

c. 3. Schedule II- through V distribution and delivery records may only also be stored offsite or electronically as described in subdivisions 9 a and b of this section in compliance with requirements of subdivision 1 of this subsection and if authorized by DEA or in federal law or regulation.

d. 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.