GENERAL GOVERNMENT CABINET

Board of Pharmacy

(New Administrative Regulation)

 

      201 KAR 2:400. Outsourcing facility.

 

      RELATES TO: KRS 315.002, 315.005, 315.010(16), 315.191(1)(a), 315.340, 315.342

      STATUTORY AUTHORITY: KRS 315.010(16), 315.340, 315.342

      NECESSITY, FUNCTION AND CONFORMITY: KRS 315.340 establishes requirements for in-state outsourcing facilities doing business in Kentucky. KRS 315.342 establishes requirements for out-of-state outsourcing facilities doing business in Kentucky. This administrative regulation establishes further requirements for in-state and out-of-state outsourcing facilities.

 

      Section 1. Application Requirements for Initial Licensure and Renewal. (1) An applicant for initial licensure or renewal as an outsourcing facility shall submit:

      (a) A nonrefundable fee of $250;

      (b) A complete "Application to Operate as an Outsourcer Facility";

      (c) Unless previously provided, proof of registration as an outsourcing facility with the secretary of the U. S. Department of Health and Human Services, Food and Drug Administration; and

      (d) Unless previously provided, a copy of the current inspection report conducted by the United States Food and Drug Administration pursuant to KRS 315.342(2)(a)(2) and (b)(1), if applicable. If a current inspection report is not available from the United States Food and Drug Administration, the applicant shall submit an inspection report by:

      1. National Association of Boards of Pharmacy (NABP); or

      2. The board’s authorized agent.

      (2) A license shall expire on June 30 following date of issuance, unless earlier suspended or revoked. There shall be a delinquent renewal fee of $250 for failure to renew by June 30 of each year.

 

      Section 2. Qualifications for License. (1) The board shall consider the following in determining whether to grant a license:

      (a) A felony conviction related to:

      1. The practice of pharmacy;

      2. Drugs; or

      3. Federal or state medical assistance programs;

      (b) The furnishing of false or fraudulent information in any application;

      (c) Suspension or revocation of a license or permit by federal, state, or local government;

      (d) Compliance with a previously granted license or permit; and

      (e) Failure to maintain and make readily available those records required to be maintained by an outsourcing facility.

      (2) The Board shall have the right to deny a license to an applicant if, in considering the factors listed in subsection 1 of this Section, it determines that granting such a license would not be consistent with public health and safety.

 

      Section 3. General Requirements. An outsourcing facility shall:

      (1) Permit, to the extent authorized by laws or rules, board agents to enter and inspect its premises and delivery vehicles, to audit its records and written operating procedures, and to confiscate prescription drugs and records; and

      (2) Follow closure procedures as stated in 201 KAR 2:106 Section 2.

 

      Section 4. Incorporation by Reference. (1) "Application to Operate as an Outsourcer Facility", July 2017, is incorporated by reference.

      (2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Board of Pharmacy, State Office Building Annex, Suite 300, 125 Holmes Street, Frankfort, Kentucky 40601-8024, Monday through Friday, 8:00 a.m. to 4:30 p.m.

 

SCOTT GREENWELL, R.Ph., President

      APPROVED BY AGENCY: August 14, 2017

      FILED WITH LRC: August 15, 2017 at 10 a.m.

      PUBLIC HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative regulation shall be held on September 21, 2017, at 10:00 a.m. at the Kentucky Board of Pharmacy, State Office Building Annex, Suite 300, 125 Holmes Street, Frankfort, Kentucky 40601. Individuals interested in attending this hearing shall notify this agency in writing by five workdays prior to this hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be cancelled. This hearing is open to the public. Any person will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to attend the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through September 30, 2017. Send written notification of intent to attend the public hearing or written comments on the proposed administrative regulation to:

      CONTACT PERSON: Steve Hart, Executive Director, Kentucky Board of Pharmacy, State Office Building Annex, Suite 300, 125 Holmes Street, Frankfort, Kentucky 40601, phone (502) 564-7910, fax (502) 696-3806, email Steve.Hart@ky.gov.

 

REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT

 

Contact Person: Steve Hart

      (1) Provide a brief summary of:

      (a) What this administrative regulation does: This administrative regulation establishes requirements for in-state and out-of-state outsourcing facilities.

      (b) The necessity of this administrative regulation: This regulation sets requirements as authorized by KRS 315.340 and 315.342.

      (c) How this administrative regulation conforms to the content of the authorizing statues: This administrative regulation establishes application requirements for initial application and renewal, qualifications for a license, and other general requirements as authorized by KRS 315.340 and 315.342.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: Outsourcing facilities will know how to obtain a permit and conduct business in the Commonwealth of Kentucky.

      (2) If this is an amendment to an existing administrative regulation, provide a brief summary of:

      (a) How the amendment will change this existing administrative regulation: N/A

      (b) The necessity of the amendment to this administrative regulation: N/A

      (c) How the amendment conforms to the content of the authorizing statutes: N/A

      (d) How the amendment will assist in the effective administration of the statutes: N/A

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: The board anticipates approximately 100 facilities will be affected by this regulation.

      (4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:

      (a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment: An applicant will submit an application, pay a fee, and conduct business pursuant to the authorizing statutes and regulation.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3): KRS 315.340 permits a fee (initial application and renewal) up to $500, but the board will only charge $250. KRS 315.342 permits a fee of $250 (initial application and renewal), and the board will charge $250.

      (c) As a result of compliance, what benefits will accrue to the entities identified in question (3): The board will issue a permit to operate an outsourcing facility if qualifications for a license are sufficient.

      (5) Provide an estimate of how much it will cost to implement this administrative

regulation:

      (a) Initially: No new costs will be incurred by the board, since many of the businesses previously licensed by the board as wholesale distributors will now convert to an outsourcer facility license. It costs approximately $250 per licensee to license, inspect, and enforce applicable laws and regulations that pertain to outsourcing facilities.

      (b) On a continuing basis: The board will incur costs of approximately $250 per licensee annually on a continuing basis.

      (6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation: Enforcement of this regulation shall be accomplished through license fees. The Board of Pharmacy generates its own revenues without contribution from the General Fund.

      (7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment: No increase in fees or funding will be required to implement this new administrative regulation.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This administrative regulation establish fees authorized by KRS 315.340 and 315.342.

      (9) TIERING: Is tiering applied? Tiering was not applied as the regulation is applied to all applicants equally.

 

FISCAL NOTE ON STATE OR LOCAL GOVERNMENT

 

      1. What units, parts or divisions of state or local government (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation? The Kentucky Board of Pharmacy will be impacted by this administrative regulation.

      2. Identify each state or federal statute or federal regulation that requires or authorizes the action taken by the administrative regulation. KRS 315.340 authorize the board to promulgate administrative regulations to regulate and control in-state outsourcing facilities. KRS 315.342 authorize the board to promulgate administrative regulations to regulate and control out-of-state outsourcing facilities.

      3. Estimate the effect of this administrative regulation on the expenditures and revenues of a state or local government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation is to be in effect.

      (a) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for the first year? The board anticipates $25,000 in revenue that will be generated in fees the first year.

      (b) How much revenue will this administrative regulation generate for the state or local government (including cities, counties, fire departments, or school districts) for subsequent years? The board anticipates $25,000 in revenue that will be generated in fees for subsequent years.

      (c) How much will it cost to administer this program for the first year? The board anticipates it will spend $25,000 to license, inspect, and enforce the laws and regulations that govern outsourcing facilities for the first year.

      (d) How much will it cost to administer this program for subsequent years? The board anticipates it will spend $25,000 to license, inspect, and enforce the laws and regulations that govern outsourcing facilities for subsequent years.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation. N/A

      Revenues (+/-):

      Expenditures (+/-):

      Other Explanation: