Title of Regulation: 18VAC110-20. Regulations Governing the Practice of Pharmacy (amending 18VAC110-20-20, 18VAC110-20-321; adding 18VAC110-20-215).

Statutory Authority: §§ 54.1-2400, 54.1-3434.05, and 54.1-3434.5 of the Code of Virginia.

Public Hearing Information:

December 12, 2016 - 9:10 a.m. - Department of Health Professions, Perimeter Center, 9960 Mayland Drive, Suite 201, Board Room 2, Richmond, VA 23233

Public Comment Deadline: December 30, 2016.

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: Section 54.1-2400 of the Code of Virginia establishes the general powers and duties of health regulatory boards including the responsibility to promulgate regulations in accordance with the Administrative Process Act.

Section 54.1-3307 of the Code of Virginia directs the Board of Pharmacy to regulate the practice of pharmacy and the manufacturing, dispensing, selling, distributing, processing, compounding, or disposal of drugs and devices. It further states the board shall also control the character and standard of all drugs, cosmetics, and devices within the Commonwealth; investigate all complaints as to the quality and strength of all drugs, cosmetics, and devices; and take such action as may be necessary to prevent the manufacturing, dispensing, selling, distributing, processing, compounding, and disposal of such drugs, cosmetics, and devices that do not conform to the requirements of law.

The specific authority to issue permits and regulate outsourcing facilities is found in §§ 54.1-3434.05 54.1-3434.5 of the Code of Virginia.

Purpose: The Board of Pharmacy sought legislative authority in 2015 to facilitate the implementation of the Drug Quality and Security Act by creating a new licensing category and oversight for outsourcing facilities and nonresident outsourcing facilities.

As of July 1, 2015, state law recognizes "outsourcing facilities," but regulations are necessary to provide for permits and oversight. There are approximately 50 outsourcing facilities currently registered with the U.S. Food and Drug Administration, and more facilities likely will register in the next year. Without a provision for the Board of Pharmacy to license these facilities, these entities will likely not be able to ship into the Commonwealth. This result has the potential to negatively impact access to critically needed compounded drugs. Unlike outsourcing facilities that may legally compound sterile drugs for office administration, pharmacies under federal law may only compound human drugs pursuant to patient-specific prescriptions. Emergency regulations have been promulgated to allow permitting of in-state facilities and registration of nonresident outsourcing

In response to the meningitis outbreak resulting from contaminated compounded drugs from the New England Compounding Center in 2012 that sickened 751 people and killed 64 people, including five Virginians, the United States Congress passed the Drug Quality and Security Act in the fall of 2013. The Act creates a new licensing category under § 503B of the Federal Food, Drug, and Cosmetic Act called outsourcing facilities. These entities are large scale sterile compounding facilities that provide compounded drugs predominantly to hospitals, physician offices, or medical clinics for administration to patients. Due to the risk associated with compounding sterile drugs on a large scale, these facilities are required under federal law to compound in compliance with current good manufacturing practices, similar to a pharmaceutical manufacturer. Regulations promulgated by the board will ensure that outsourcing facilities located in the state or shipping drugs into Virginia have oversight that will protect public health and safety.

Substance: Regulations set fees for approval of applications and renewal of permits and registration, similar to fees for other facilities regulated by the board. Requirements for pharmacies that are or are not applicable to outsourcing facilities are specified, and requirements for pharmacist supervision, recordkeeping, and renewal are also established. Finally, regulations specify that if a compounding pharmacy shares physical space with an outsourcing facility, the more stringent standards of good manufacturing practices apply.

Issues: The primary advantage to the public is more accountability, safety, and consistency in the sterile compounding of drugs being supplied to hospitals and other facilities for patient administration. There are no disadvantages.

There are no advantages or disadvantages to the agency; this will be a new responsibility for inspectors who must be specifically trained to inspect outsourcing facility. Promulgation of regulations for the issuance of permits to outsourcing facilities is a statutory mandate.

Fees for outsourcing permits should make Virginia a highly competitive place to do business. In New York, the registration fee is $825; in California, the fee for a pharmacy that does sterile compounding is $780; and in Tennessee, the fee for an outsourcing facility that does sterile compounding is $775. In Virginia, the fee is $270.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. In accordance with Chapter 300 of the 2015 Acts of Assembly,¹ the Board of Pharmacy (Board) proposes to: 1) require that facilities in the Commonwealth engaged in the sterile compounding of drugs or devices to be dispensed without a prescription for a specific patient obtain a permit as an outsourcing facility from the Board, 2) require that outsourcing facilities located outside of the Commonwealth that deliver in any manner Schedule II through VI drugs or devices into Virginia without a prescription for a specific patient be registered with the Board, 3) establish various requirements for the permits and registrations, and 4) set fees for the approval of applications and renewal of permits and registrations.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Chapter 300 of the 2015 Acts of Assembly establishes that, "[n]o person shall act as an outsourcing facility without first obtaining a permit from the Board." Further the legislation defines "outsourcing facility" as "a facility that is engaged in the compounding of sterile drugs and is currently registered as an outsourcing facility with the U.S. Secretary of Health and Human Services and that complies with all applicable requirements of federal and state law, including the Federal Food, Drug, and Cosmetic Act." Outsourcing facilities typically compound drugs without a patient-specific prescription to supply large health systems.

This legislation was prompted by a 2012 meningitis outbreak from contaminated drugs compounded by the New England Compounding Center that sickened 751 people and killed 64 people, including five Virginians. In response to this outbreak, Congress passed the Drug Quality and Security Act (2013). This act created a new licensing category under Section 503B of the Federal Food, Drug, and Cosmetic Act for outsourcing facilities. These entities are large-scale sterile compounding facilities that provide compounded drugs predominantly to hospitals, physician offices, or medical clinics for administration to patients. Due to the risk associated with compounding sterile drugs on a large scale, these facilities are required under federal law to compound in compliance with Current Good Manufacturing Practices, similar to a pharmaceutical manufacturer. The legislation is intended to ensure that outsourcing facilities located in the Commonwealth or are shipping drugs into Virginia are subject to oversight to protect public health and safety.

There are approximately 59 outsourcing facilities currently registered with the FDA and likely more will register. Without establishing Board permit and registration requirements to regulate these facilities, these entities are unlikely to be able to ship within or into the Commonwealth. This would have the potential to negatively impact access to critically needed compounded drugs.

There is an emergency regulation currently in effect that allows permitting of in-state facilities and registration of non-resident outsourcing facilities. The emergency regulation is set to expire on June 6, 2017. This proposed regulation will allow the shipping of critically needed compounded drugs on a permanent basis. Additionally, the proposed requirements help reduce the likelihood that contaminated drugs will be distributed in the Commonwealth. Thus the proposed regulation will be beneficial.

Businesses and Entities Affected. The proposed amendments affect large-scale sterile compounding facilities that provide compounded drugs predominantly to hospitals, physician offices, or medical clinics for administration to patients. The FDA has currently registered 59 such facilities. The Virginia Board currently has 19 applications pending registration under the emergency rule.

Localities Particularly Affected. The proposed amendments do not disproportionately affect particular localities.

Projected Impact on Employment. Enabling the shipping of compounded drugs may have a small positive impact on employment.

Effects on the Use and Value of Private Property. The proposed amendments allow the shipping of critically needed compounded drugs beyond June 6, 2017.

Real Estate Development Costs. The proposed amendments do not affect real estate development costs.

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. The proposed amendments do not increase costs for small businesses.

Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Adverse Impacts:

Businesses. The proposed amendments do not adversely affect businesses.

Localities. The proposed amendments will not adversely affect localities.

Other Entities. The proposed amendments will not adversely affect other entities.

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¹ To view this Chapter, see http://leg1.state.va.us/cgi-bin/legp504.exe?151+ful+CHAP0300

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

Summary:

In accordance with Chapter 300 of the 2015 Acts of Assembly, the proposed amendments (i) require facilities engaged in the compounding of sterile drugs and registered with the U.S. Secretary of Health and Human Services as outsourcing facilities to hold a permit to compound or ship compounded drugs into Virginia; (ii) set fees for approval of applications and renewal of permits and registration; (iii) specify requirements for pharmacies that are or are not applicable to outsourcing facilities; (iv) establish requirements for pharmacist supervision, recordkeeping, and renewal; and (v) specify that if a compounding pharmacy shares physical space with an outsourcing facility, the more stringent standards of good manufacturing practices are applicable.

18VAC110-20-20. Fees.

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

B. Unless otherwise provided, any fees for taking required examinations shall be paid directly to the examination service as specified by the board.

C. Initial application fees.

1. Pharmacist license	$180
2. Pharmacy intern registration	$15
3. Pharmacy technician registration	$25
4. Pharmacy permit	$270
5. Permitted physician licensed to dispense drugs	$270
6. Medical equipment supplier permit	$180
7. Humane society permit	$20
8. Outsourcing facility permit	$270
8. 9. Nonresident pharmacy registration	$270
10. Nonresident outsourcing facility registration	$270
9. 11. Controlled substances registrations	$90
10. 12. Innovative program approval. If the board determines that a technical consultant is required in order to make a decision on approval, any consultant fee, not to exceed the actual cost, shall also be paid by the applicant in addition to the application fee.	$250
11. 13. Approval of a pharmacy technician training program	$150
12. 14. Approval of a continuing education program	$100
13. 15. Approval of a repackaging training program	$50

D. Annual renewal fees.

1. Pharmacist active license – due no later than December 31	$90
2. Pharmacist inactive license – due no later than December 31	$45
3. Pharmacy technician registration – due no later than December 31	$25
4. Pharmacy permit – due no later than April 30	$270
5. Physician permit to practice pharmacy – due no later than February 28	$270
6. Medical equipment supplier permit – due no later than February 28	$180
7. Humane society permit – due no later than February 28	$20
8. Outsourcing facility permit – due no later than April 30	$270
8. 9. Nonresident pharmacy registration – due no later than the date of initial registration	$270
10. Nonresident outsourcing facility registration – due no later than the date of initial registration	$270
9. 11. Controlled substances registrations – due no later than February 28	$90
10. 12. Innovative program continued approval based on board order not to exceed $200 per approval period.
11. 13. Approval of a pharmacy technician training program	$75 every two years
12. 14. Approval of a repackaging training program	$30 every two years

E. 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 or within two years in the case of a pharmacy technician training program. In addition, engaging in activities requiring a license, permit, or registration after the expiration date of such license, permit, or registration shall be grounds for disciplinary action by the board.

1. Pharmacist license	$30
2. Pharmacist inactive license	$15
3. Pharmacy technician registration	$10
4. Pharmacy permit	$90
5. Physician permit to practice pharmacy	$90
6. Medical equipment supplier permit	$60
7. Humane society permit	$5
8. Outsourcing facility permit	$90
8. 9. Nonresident pharmacy registration	$90
10. Nonresident outsourcing facility registration	$90
9. 11. Controlled substances registrations	$30
10. 12. Approval of a pharmacy technician training program	$15
11. 13. Approval of a repackaging training program	$10

F. Reinstatement fees. Any person or entity attempting to renew a license, permit, or registration more than one year after the expiration date, or more than two years after the expiration date in the case of a pharmacy technician training program, shall submit an application for reinstatement with any required fees. Reinstatement is at the discretion of the board and, except for reinstatement following license revocation or suspension, may be granted by the executive director of the board upon completion of an application and payment of any required fees.

1. Pharmacist license	$210
2. Pharmacist license after revocation or suspension	$500
3. Pharmacy technician registration	$35
4. Pharmacy technician registration after revocation or suspension	$125
5. Facilities or entities that cease operation and wish to resume shall not be eligible for reinstatement but shall apply for a new permit or registration. Facilities or entities that failed to renew and continued to operate for more than one renewal cycle shall pay the current and all back renewal fees for the years in which they were operating plus the following reinstatement fees:
a. Pharmacy permit	$240
b. Physician permit to practice pharmacy	$240
c. Medical equipment supplier permit	$210
d. Humane society permit	$30
e. Outsourcing facility permit	$240
e. f. Nonresident pharmacy registration	$115
g. Nonresident outsourcing facility registration	$240
f. h. Controlled substances registration	$180
g. i. Approval of a pharmacy technician training program	$75
h. j. Approval of a repackaging training program	$50

G. Application for change or inspection fees for facilities or other entities.

1. Change of pharmacist-in-charge	$50
2. Change of ownership for any facility	$50
3. Inspection for remodeling or change of location for any facility	$150
4. Reinspection of any facility	$150
5. Board-required inspection for a robotic pharmacy system	$150
6. Board-required inspection of an innovative program location	$150
7. Change of pharmacist responsible for an approved innovative program	$25

H. Miscellaneous fees.

1. Duplicate wall certificate	$25
2. Returned check	$35
3. Duplicate license or registration	$10
4. Verification of licensure or registration	$25

18VAC110-20-215. Outsourcing facilities.

A. Any facility in the Commonwealth engaged in the sterile compounding of drugs or devices to be dispensed without a prescription for a specific patient shall obtain a permit as an outsourcing facility from the board in accordance with § 54.1-3434.05 of the Code of Virginia. Any outsourcing facility located outside of the Commonwealth that delivers in any manner Schedule II through VI drugs or devices into the Commonwealth without a prescription for a specific patient shall be registered with the board in accordance with § 54.1-3434.5 of the Code of Virginia.

B. In order to obtain or renew a permit or registration, outsourcing facilities shall submit to the board (i) documentation that the facility is registered as an outsourcing facility under the Federal Food, Drug, and Cosmetic Act and (ii) a copy of a current inspection report consistent with § 54.1-3434.05 or 54.1-3434.5 of the Code of Virginia. Outsourcing facilities that fail to demonstrate that the facility is registered as an outsourcing facility under the Federal Food, Drug, and Cosmetic Act or submit a copy of a current inspection report consistent with § 54.1-3434.05 or 54.1-3434.5 shall not meet the requirements for an initial permit or registration or for renewal of a permit or registration.

C. An outsourcing facility shall comply with all provisions of this chapter relating to a pharmacy in Parts IV (18VAC110-20-110 et seq.) and VI (18VAC110-20-240 et seq.), with the following exceptions:

1. Subsections E and F of 18VAC110-20-190, relating to dispensed prescriptions.

2. Subsection A of 18VAC110-20-200, relating to prescriptions awaiting delivery.

3. Subsections B and C of 18VAC110-20-240, relating to prescriptions and chart orders.

4. 18VAC110-20-250, relating to automated data processing prescription records.

5. Subsections C, D, E, and F of 18VAC110-20-270, relating to preparation and dispensing of prescriptions.

D. In addition to applicable requirements for pharmacies, outsourcing facilities shall comply with the following:

1. Pharmacist supervision. At all times, such facilities shall be under the supervision of a PIC who routinely practices at the location designated on the permit application. A pharmacist shall be present at all times when the facility is open for business.

2. Records.

a. All records, including the receipt and disposition of drugs or devices, shall be maintained by the facility for a period of five years and shall be available to the board upon request.

b. Compounding records shall include identification and strength of the drugs and shall provide the ingredients, expiration dates, and the source of such ingredients. Records shall also include the national drug code number of the source drug or bulk active ingredient, if available; the strength of the active ingredient per unit; the dosage form and route of administration; the package description; the number of individual units produced; the national drug code number of the final product, if assigned, or lot number; and an appropriately assigned expiration date or beyond-use date.

c. Outsourcing facilities shall maintain quality control records to include stability and sterility testing for determining beyond-use dating.

E. No outsourcing facility may distribute or dispense any drug to any person pursuant to a prescription unless it also maintains a current active pharmacy permit. The pharmacy shall comply with all state and federal laws, regulations, and requirements, except it shall compound in compliance with current good manufacturing practices under § 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (21 USC § 351(a)(2)(B)).

Part VIII
Labeling and Packaging Standards for Prescriptions

18VAC110-20-321. Compounding.

A. The compounding of both sterile and nonsterile drug products by a pharmacy that does not share the same physical space with an outsourcing facility shall be performed in accordance with USP-NF compounding standards and § 54.1-3410.2 of the Code of Virginia.

B. The compounding of sterile drug products by an outsourcing facility or by a pharmacy sharing the same physical space with an outsourcing facility shall be performed in accordance with current good manufacturing practices under § 501(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act (21 USC § 351(a)(2)(B)).

FORMS (18VAC110-20)

Application for Registration as a Pharmacy Intern (rev. 8/07)

Affidavit of Practical Experience, Pharmacy Intern (rev. 8/07)

Application for Licensure as a Pharmacist by Examination (rev. 11/09)

Instructions for Reinstating or Reactivating a Pharmacist License (rev. 3/11)

Application for Approval of a Continuing Education Program (rev. 8/07)

Application for Approval of ACPE Pharmacy School Course(s) for Continuing Education Credit (rev. 6/09)

Application for License to Dispense Drugs (rev. 8/07)

Application for a Pharmacy Permit (rev. 6/10)

Application for a Nonresident Pharmacy Registration (rev. 7/08)

Application for a Pharmacy Permit (rev. 12/2015)

Application for a Non-Resident Pharmacy Registration (rev. 12/2015)

Application for a Non-Resident Outsourcing Facility Registration (12/2015)

Application for an Outsourcing Facility Permit (12/2015)

Application for a Permit as a Medical Equipment Supplier (rev. 3/09)

Application for a Controlled Substances Registration Certificate (rev. 4/09)

Application for Registration as a Pharmacy Intern for Graduates of a Foreign College of Pharmacy (rev. 8/07).

Closing of a Pharmacy (rev. 8/07)

Application for Approval of an Innovative (Pilot) Program (rev. 8/07)

Pharmacy Technician Registration Instructions and Application (rev. 3/09)

Instructions for Reinstating a Pharmacy Technician Registration (rev. 3/11)

Application for Approval of a Pharmacy Technician Training Program (rev. 8/07)

Application for Registration for Volunteer Practice (rev. 8/07)

Sponsor Certification for Volunteer Registration (rev. 8/08)

Application for Reinstatement of Registration as a Pharmacy Intern (eff. 9/07)

Affidavit for Limited-Use Pharmacy Technician (rev. 8/07)

Limited-Use Pharmacy Technician Registration Instructions and Application (rev. 7/08)

Registration for a Pharmacy to be a Collection Site for Donated Drugs (eff. 4/09)

Application for Approval of Repackaging Training Program (eff. 12/10)