Title of Regulation: 18VAC110-30. Regulations for Practitioners of the Healing Arts to Sell Controlled Substances (amending 18VAC110-30-15, 18VAC110-30-20, 18VAC110-30-30, 18VAC110-30-50 through 18VAC110-30-90; adding 18VAC110-30-21).

Statutory Authority: §§ 54.1-2400, 54.1-3304.1, and 54.1-3307 of the Code of Virginia.

Public Hearing Information:

December 12, 2016 - 9:05 a.m. - Department of Health Professions, Perimeter Center, 9960 Mayland Drive, Suite 201, Board Room 2, Richmond, VA 23233

Public Comment Deadline: December 16, 2016.

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

Basis: Section 54.1-2400 of the Code of Virginia authorizes health regulatory boards to promulgate regulations in accordance with the Administrative Process Act.

The specific authority to issue permits and regulate facilities in which practitioners of the healing arts dispense controlled substances is found in § 54.1-3304.1 of the Code of Virginia, which authorizes the Board of Pharmacy to license and regulate the dispensing of controlled substances by practitioners of the healing arts.

Purpose: The Board of Pharmacy licenses individual physicians to sell controlled substances to their own patients and already has regulations for security, recordkeeping, storage and other requirements relating to the facility from which physicians licensed to sell drugs dispense. Oversight of physicians selling drugs was relatively simple when there were approximately 100 licensees, but the total is now over 600 and continues to increase. The increase is due to an increasingly larger supply of drugs on the market repackaged specifically for physicians to sell, an increase in the number of urgent care centers that dispense drugs when treating patients, and an increase in drugs available to treat popular dermatological issues.

The practice of physicians selling drugs is analogous to pharmacies dispensing drugs. In regulating the practice of pharmacy, the board licenses both pharmacists and pharmacies. This level of oversight for both the individuals and the facility works well, and this proposal seeks to mirror this level of oversight for physicians selling drugs. Additionally, during inspections of facilities where multiple licensed physicians sell drugs, it is reasonable to hold the facility responsible for any possible violations and not an individual physician. This proposed process is also analogous to the inspection process currently used for pharmacies.

Failure to promulgate regulations would perpetuate the Board of Pharmacy's difficulty in overseeing a growing number of physicians who are now licensed to dispense drugs and limit the board's ability for whom it may take disciplinary action when violations are noted during routine inspections. With a facility permit, which is similar to a pharmacy permit, the board can hold the permit holder responsible and accountable for the stock of drugs. Clearer regulation and accountability will foster public protection in assuring the safety and integrity of prescription drugs.

Substance: Regulations set fees for approval of applications, renewal of permits, and reinstatement of lapsed permits. Requirements for inspections, physical standards for the facility, and notification to the board now fall to the facility permit rather than the individual licensee. For an individual license, the fee is reduced from $240 to $180, since the facility permit fee will now help cover the cost of inspections. For a facility permit, the application fee is $240, which is similar to a pharmacy application and is intended to help cover the cost of an initial inspection.

The only change in physical requirements is specificity about the availability of hot and cold water, which must be within 20 feet of the selling and storage area and not located within an examination room or restroom.

Issues: The primary advantage to the public is more accountability and consistency in the maintenance and security of controlled substances in physician practices that are selling drugs to their patients. The primary advantage to the agency is a single entity to hold accountable when there are complaints or inspection violations rather than trying to assign responsibility to a physician within a multi-practitioner group. Also, promulgation of regulations for the issuance of permits to facilities is a statutory mandate. There are no disadvantages.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As mandated by Chapter 117 of the 2015 Acts of the Assembly, the Board of Pharmacy (Board) proposes to promulgate a replacement regulation for an emergency regulation that will expire on June 6, 2017. The emergency and replacement regulations: 1) rearrange portions of the regulation so that classes of fees are grouped together, 2) clarify that required sinks with hot and cold running water must be within 20 feet of the selling and storage area of the facility and may not be in a bathroom or examination room, 3) lower fees for initial individual licensure for doctors of medicine, osteopathic medicine or podiatry¹ to sell control substances, and 4) institute permit fees for most facilities² where practitioners of the healing arts sell controlled substances.

Result of Analysis. For most proposed changes, benefits likely outweigh costs. For one change, there is insufficient information to ascertain whether benefits outweigh costs for all affected entities.

Estimated Economic Impact. Many of the Board's proposed regulatory changes, including rearranging regulatory sections and expanding language outlining the requirement for a sink in the immediate vicinity of a facility's controlled substance selling and storage area, do not change current rules or practice. For instance, the Board already requires a sink within 20 feet of the selling and storage area and does not allow that sink to be in a bathroom³ or an examination room.⁴ For these changes, no entities are likely to incur any costs. Interested parties, however, will likely benefit from the additional clarity these changes bring to the regulation.

Before the emergency changes to this regulation became effective, individual practitioners of the healing arts paid $240 to be initially licensed to sell controlled substances and $90 each year to renew that license. Additionally, individuals who missed their renewal date but renewed their license within a year of its expiration date paid a $30 late renewal fee in addition to their regular renewal fee. Individuals who missed their renewal date by more than a year had to pay a $210 reinstatement fee in addition to their renewal fee. Because part of these individual fees were meant to cover inspection of the facility from which individuals would be selling controlled substances, and because the Board instituted facility permit fees that would cover the cost of those inspections instead, the Board proposes to lower half of the individual fees.

Under this proposed regulation, individual licensees will pay $180 for initial licensure to sell controlled substances, $90 to renew their licenses each year, $30 for late renewal and $150 for reinstatement after a license has lapsed for more than a year. Licensees will benefit from these fee reductions as they will either lower individual costs for licensure absolutely and will partially or completely offset new facility permit fees for individual practitioners who are in partnership private practices where partners are responsible for splitting business expenses.

The Board also proposes to institute new fees for facility permits. The fee for an initial permit is $240 and annual renewal of that permit is also $240 so long as the permit is renewed in a timely manner. If business owners renew the their facility permit after the renewal date but within one year, they will have to pay an additional $40; the reinstatement fee for renewing a facility permit more than a year after it lapsed is $240 additional to the on time renewal fee.

Both Chapter 117, and this regulation, exempt sole proprietor practitioners from paying permit fees although they still have to obtain a permit and will have to pay to be individually licensed. Because of this exemption, no sole proprietor practitioner is likely to incur any additional fees, either upon initial licensure/permitting or when they renew their licenses or permits, on account of this proposed change.

Partnership practices with two or three partners⁵ will incur net extra costs of $120⁶ and $60⁷ respectively to be initially licensed/permitted when comparing higher individual licensure fees paid before the emergency stage of this regulation to lower individual fees plus the newly required facility permit paid under this proposed regulation. Partnership practices with four partner practitioners are at a point of indifference because combined fees to be initially licensed/permitted would be the same $960 under the old regulation and under this proposed regulation.

All partnerships with more than four partners and where the business is actually owned by the partners will see cost savings on account of lower combined initial fees under the proposed regulation. Board staff reports that many practices are owned by corporations or hospitals; for those practices, all individual practitioners will see lower initial licensure costs and the corporation or hospital practice owner will incur the additional facility permit fee.

All licensed practitioners except for sole practitioners, or the businesses that they work for, will incur additional fee costs upon renewal of their facility permits because individual renewal fees remain the same but permit fees need to additionally be paid. There is insufficient information to ascertain whether the benefits of requiring facility permits will outweigh the higher costs that some individuals or businesses will accrue.

Businesses and Entities Affected. Board staff reports that there are approximately 200 facilities which are permitted to sell controlled substances in the state and that the Board licenses 624 practitioners of the healing arts to sell controlled substances. All of these licensees, all future licensees and all businesses that need facility permits are affected by this proposed regulation.

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

Projected Impact on Employment. These proposed regulatory changes are unlikely to affect employment in the Commonwealth.

Effects on the Use and Value of Private Property. The facility permit fees in this regulation will raise total fees costs very marginally for some businesses in the Commonwealth. To the extent that those small costs are not passed on to patients in the form of slightly higher cost of care, those businesses will see a very marginal decrease in value.

Real Estate Development Costs. These proposed regulatory changes are unlikely to affect real estate development costs in the Commonwealth.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, 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."

Costs and Other Effects. Small business partnerships will likely incur additional costs on account of the new facility permit fee in this proposed regulation.

Alternative Method that Minimizes Adverse Impact. There are no alternatives that would both lower costs and meet the legislative mandate for facility permits.

Adverse Impacts: 

Businesses. Physician practices will likely incur additional costs on account of the new facility permit fee in this proposed regulation.

Localities. Localities in the Commonwealth are unlikely to see any adverse impacts on account of these proposed regulatory changes.

Other Entities. No other entities are likely to be adversely affected by these proposed changes.

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¹ These entities are practitioners of the healing arts for the purposes of this regulation.

² By statute and this regulation, sole practitioners who sell controlled substances must pay individual licensure fees but are exempt from having to pay facility permit fees (although they will have to pay licensure fees).

³ Board staff reports that sinks in bathrooms are not sanitary enough for mixing medications.

⁴ Board staff reports that this is not allowed because doctors may need to access the sink when the examination room is occupied by a patient.

⁵ This math is assuming partnerships where the individual partners own the business and will split business expenses.

⁶ For a partnership with two doctors licensed to sell controlled substances, the doctors paid a $480 combined to be initially licensed ($240 for each doctor's individual license x 2)  under pre-emergency regulation and now pay $600 under the proposed regulation to be initially licensed ($180 for each doctor's individual license plus $240 for the facility license).

⁷ For partnerships with three doctors licensed to sell control substances, the doctors paid $720 combined to be initially licensed ($240 for each doctor's individual license x 3) under pre-emergency regulation and now pay $780 under the proposed regulation to be initially licensed ($180 for each doctor's individual license plus $240 for the facility license).

Agency's Response to Economic Impact Analysis: In general, the Board of Pharmacy concurs with the analysis of the Department of Planning and Budget on proposed amended regulations for 18VAC110-30, Regulations for Practitioners of the Healing Arts to Sell Controlled Substances.

The cost/benefit analysis fails to take into account the financial benefit that accrues to a facility in which practitioners are selling controlled substances to their patients. The increase in $120 and $60 per year for partnerships of two or three practitioners is an insignificant cost for a business that may resemble a small pharmacy in the number of drugs being stored and sold to patients.

The agency also disagrees with the adverse impact notification to the General Assembly. The board has acted in compliance with the second enactment clause of Chapter 117 of the 2015 Acts of the Assembly, which required the board to promulgate regulations to implement the requirement of law that practitioners of the healing arts must dispense controlled substances in permitted facilities. As a nongeneral fund agency, the board establishes a fee schedule intended to cover the cost of administering a regulatory program. Any adverse impact of such regulation was a mandate of the General Assembly and the Code of Virginia, so there should be no need for notification.

Summary:

The Board of Pharmacy is proposing amendments to its regulations to implement the requirements of Chapter 117 of the 2015 Acts of Assembly that practitioners of the healing arts must dispense controlled substances in permitted facilities. The proposed amendments (i) institute permit fees for most facilities where practitioners of the healing arts sell controlled substances; (ii) lower fees for initial individual licensure for doctors of medicine, osteopathic medicine, or podiatry to sell controlled substances; (iii) place requirements for inspections, physical standards for the facility, and notification to the board with the permitted facility rather than the individual licensee; and (iv) clarify that required sinks with hot and cold water must be available within 20 feet of the selling and storage area of the facility and may not be located within an examination room or restroom.

18VAC110-30-15. Fees.

A. Unless otherwise provided, fees listed in this section shall not be refundable.

B. Fee for initial license for a practitioner of the healing arts to sell controlled substances Initial application fees.

1. The application fee for initial licensure shall be $240 License for practitioner of the healing arts to sell controlled substances: $180.

2. The application fee for reinstatement of a license that has been revoked or suspended indefinitely shall be $500 Permit for facility in which practitioners of the healing arts sell controlled substances: $240.

C. Renewal of license for a practitioner of the healing arts to sell controlled substances Annual renewal fees.

1. The annual fee for renewal of an active license shall be $90. For the annual renewal due on December 31, 2009, the fee shall be $50 License for practitioner of the healing arts to sell controlled substances: $90.

2. The late fee for renewal of a license within one year after the expiration date is $30 in addition to the annual renewal fee Permit for facility in which practitioners of the healing arts sell controlled substances: $240.

3. The fee for reinstatement of a license expired for more than one year shall be $210.

D. Late fees. The following late fees shall be paid in addition to the current renewal fee to renew an expired license within one year of the expiration date.

1. License for practitioner of the healing arts to sell controlled substances: $30.

2. Permit for facility in which practitioners of the healing arts sell controlled substances: $40.

E. Reinstatement fees. Any person or entity attempting to renew a license or permit more than one year after the expiration date shall submit an application for reinstatement with any required fees.

1. License for practitioner of the healing arts to sell controlled substances: $150.

2. Permit for facility in which practitioners of the healing arts sell controlled substances: $240.

3. Application fee for reinstatement of a license or permit that has been revoked or suspended indefinitely: $500.

F. Facilities in which only one practitioner of the healing arts is licensed by the board to sell controlled substances shall be exempt from fees associated with obtaining and renewing a facility permit.

D. G. The fee for reinspection of any facility shall be $150.

E. H. The fee for a returned check shall be $35.

Part II
Licensure Requirements

18VAC110-30-20. Application for licensure.

A. Prior to engaging in the sale of controlled substances, a practitioner shall make application on a form provided by the board and be issued a license. After June 7, 2016, the practitioner shall engage in such sale from a location that has been issued a facility permit.

B. In order to be eligible for a license to sell controlled substances, a practitioner shall possess a current, active license to practice medicine, osteopathic medicine, or podiatry issued by the Virginia Board of Medicine. Any disciplinary action taken by the Board of Medicine against the practitioner's license to practice shall constitute grounds for the board to deny, restrict, or place terms on the license to sell.

C. For good cause shown, the board may issue a limited-use license, when the scope, degree or type of services provided to the patient is of a limited nature. The license to be issued shall be based on conditions of use requested by the applicant or imposed by the board in cases where certain requirements of regulations may be waived. The following conditions shall apply:

1. A policy and procedure manual detailing the type and volume of controlled substances to be sold and safeguards against diversion must accompany the application. The application shall list the regulatory requirements for which a waiver is requested and a brief explanation as to why each requirement should not apply to that practice; and

2. The issuance and continuation of such license shall be subject to continuing compliance with the conditions set forth by the board.

18VAC110-30-21. Application for facility permit.

A. After June 7, 2016, any location at which practitioners of the healing arts sell controlled substances shall have a permit issued by the board in accordance with § 54.1-3304.1 of the Code of Virginia. A licensed practitioner of the healing arts shall apply for the facility permit on a form provided by the board.

B. For good cause shown, the board may issue a limited-use facility permit when the scope, degree, or type of services provided to the patient is of a limited nature. The permit to be issued shall be based on conditions of use requested by the applicant or imposed by the board in cases where certain requirements of this chapter may be waived.

1. The limited-use facility permit application shall list the regulatory requirements for which a waiver is requested, if any, and a brief explanation as to why each requirement should not apply to that practice.

2. A policy and procedure manual detailing the type and volume of controlled substances to be sold and safeguards against diversion shall accompany the application.

3. The issuance and continuation of a limited-use facility permit shall be subject to continuing compliance with the conditions set forth by the board.

C. The executive director may grant a waiver of the security system when storing and selling multiple strengths and formulations of no more than five different topical Schedule VI drugs intended for cosmetic use.

18VAC110-30-30. Renewal of license or permit.

A. A license or facility permit so issued shall be valid until December 31 of the year of issue. Renewal of the license shall be made on or before December 31 of each year.

B. If a practitioner fails to renew his license or facility permit to sell within the Commonwealth by the renewal date, he must pay the renewal fee plus the late fee. He may renew his license or facility permit by payment of these fees for one year from the date of expiration.

C. Failure to renew the license or facility permit to sell within one year following expiration shall cause the license or permit to lapse. The selling of controlled substances with a lapsed license or permit shall be illegal and may subject the practitioner to disciplinary action by the board. To reinstate a lapsed license or permit, a practitioner shall submit an application for reinstatement and pay the reinstatement fee, plus the reinspection fee if a reinspection is required as set forth in subsection D of this section. Reinstatement is at the discretion of the board and may be granted by the executive director on the board's behalf provided no grounds exist to deny said reinstatement.

D. Prior to reinstatement of a license facility permit that has been lapsed for more than one year, a reinspection of the storage and selling area shall be conducted unless another practitioner at the same location has held an active license to sell controlled substances during that period. A practitioner seeking reinstatement of a facility permit shall not stock drugs until approved by the board or its authorized agent.

E. The selling of controlled substances without a current, active license or facility permit is unlawful and shall constitute grounds for disciplinary action by the board.

18VAC110-30-50. Licensees ceasing to sell controlled substances; inventory required prior to disposal.

A. Any licensee who intends to cease selling controlled substances shall notify the board 10 days prior to cessation and surrender his license, and his license will be placed on expired status. If no other practitioner of the healing arts licensed to sell controlled substances intends to sell controlled substances from the same location, the practitioner shall also surrender the facility permit, and the permit will be placed on expired status.

B. Any Schedule II through V controlled substances shall be inventoried and may be disposed of by transferring the controlled substance stock to another licensee or other person authorized by law to possess such drugs or by destruction as set forth in this chapter.

C. The licensee or other responsible person shall inform the board of the name and address of the licensee to whom the controlled substances are transferred.

D. A licensee who has surrendered his license or facility permit pursuant to this section may request that it be made current again at any time within the same renewal year without having to pay an additional fee, provided the licensee is selling from the same location or from another location that has been inspected and approved by the board.

Part III
Inspection Requirements, Standards, and Security for Storage Areas; Disposal of Controlled Substances

18VAC110-30-70. Maintenance of a common stock of controlled substances Practitioner in charge in a permitted facility.

Any two or more licensees who elect to maintain a common stock of A facility with a permit for practitioners of the healing arts to sell controlled substances for dispensing shall:

1. Designate a licensee practitioner with a license to sell controlled substances who shall be the primary person responsible for the stock, the required inventory, the records of receipt and destruction, safeguards against diversion and compliance with this chapter;

2. Report to the board the name of the licensee and the location of the controlled substance stock on a form provided by the board;

3. Upon a change in the licensee so designated, an inventory of all Schedule II through V controlled substances shall be conducted in the manner set forth in § 54.1-3404 of the Drug Control Act of the Code of Virginia and such change shall immediately be reported to the board; and

4. Nothing shall relieve the other individual licensees who sell controlled substances at the location of the responsibility for the requirements set forth in this chapter.

18VAC110-30-80. Inspection and notice required.

A. The area designated for the storage and selling of controlled substances shall be inspected by an agent of the board prior to the issuance of the first license to sell controlled substances from that site. Inspection prior to issuance of subsequent licenses at the same location shall be conducted at the discretion of the board.

B. Applications for licenses which facility permits that indicate a requested inspection date, or requests which that are received after the application is filed, shall be honored provided a 14-day notice to the board is allowed prior to the requested inspection date.

C. Requested inspection dates which that do not allow a 14-day notice to the board may be adjusted by the board to provide 14 days for the scheduling of the inspection.

D. At the time of the inspection, the controlled substance selling and storage area shall comply with 18VAC110-30-90, 18VAC110-30-100, 18VAC110-30-110, 18VAC110-30-120, and 18VAC110-30-130.

E. If an applicant substantially fails to meet the requirements for issuance of a license facility permit and a reinspection is required, or if the applicant is not ready for the inspection on the established date and fails to notify the inspector or the board at least 24 hours prior to the inspection, the applicant shall pay a reinspection fee as specified in 18VAC110-30-15 prior to a reinspection being conducted.

F. No license facility permit shall be issued to sell controlled substances until adequate safeguards against diversion have been provided for the controlled substance storage and selling area and approved by the the inspector or board staff.

G. The licensee shall notify the board of any substantive changes to the approved selling and storage area including moving the location of the area, making structural changes to the area, or making changes to the alarm system for the area prior to the changes being made and pay a reinspection fee. An inspection shall be conducted prior to approval of the new or altered selling and storage area.

18VAC110-30-90. Physical standards.

Physical standards for the controlled substance selling and storage area:

1. The building in which the controlled substances selling and storage area is located shall be constructed of permanent and secure materials. Trailers and other movable facilities shall not be permitted;

2. There shall be an enclosed area of not less than 40 square feet that is designated as the controlled substances selling and storage area, which shall be used exclusively for storage, preparation, and dispensing. Records related to the sale of controlled substances may be maintained outside the selling and storage area with access limited to the licensee and those persons authorized to assist in the area. The work space used in preparation of the drugs shall be contained within the enclosed area. A controlled substance selling and storage area inspected and approved prior to November 3, 1993, shall not be required to meet the size requirement of this chapter;

3. Controlled substances maintained for ultimate sale shall be maintained separately from any other controlled substances maintained for other purposes. Controlled substances maintained for other purposes such as administration or samples may be stored within the selling and storage area provided they are clearly separated from the stock maintained for sale;

4. The selling and storage area, work counter space and equipment in the area shall be maintained in a clean and orderly manner;

5. A sink with hot and cold running water shall be available within the immediate vicinity 20 feet of the selling and storage area and not located within an examination room or restroom; and

6. The entire area described in this chapter shall be well lighted and ventilated; the proper storage temperature shall be maintained to meet official specifications for controlled substance storage.

FORMS (18VAC110-30)

Application for a License to Sell Controlled Substances by a Practitioner of the Healing Arts (rev. 8/07).

Application for a License to Sell Controlled Substances by a Practitioner of the Healing Arts (rev. 12/2015)

Application for a Facility Permit for Practitioner(s) of the Healing Arts to Sell Controlled Substances (rev. 12/2015)