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PA Bulletin, Doc. No. 08-1592



[ 49 PA. CODE CH. 27 ]


[38 Pa.B. 4784]
[Saturday, August 30, 2008]

   The State Board of Pharmacy (Board) proposes to amend § 27.91 (relating to schedule of fees) to read as set forth in Annex A. The proposed amendment would increase the application fees for the pharmacy intern certificate, pharmacist license, new pharmacy permit, reinspections, pharmacy permit changes and the biennial renewal fees for pharmacist licenses and pharmacy permits.

Effective Date

   The amendment will be effective upon final-form publication in the Pennsylvania Bulletin. The increased biennial renewal fees will take effect beginning with the pharmacy permit biennial renewal period commencing on September 1, 2009, and the pharmacist license biennial renewal period commencing on October 1, 2010. The other fee increases will take effect upon final-form publication.

Statutory Authority

   The proposed amendment is authorized under section 8.2(a) of the Pharmacy Act (act) (63 P. S. § 390-8.2(a)). In addition, section 8.2(b) requires the Board to increase fees by regulation in an amount adequate to meet the minimum enforcement efforts required by the act.

Background and Need for Amendment

   The Board is required by law to support its operations from revenue it generates from fees, fines and civil penalties. In accordance with section 8.2 of the act, if the Board anticipates that its revenue will not meet its expenditures, the Board must increase its revenue. The Board raises virtually all of its operating revenue through fees. The biennial license renewal fees are the most substantial revenue generating fees of all the fees charged by the Board.

   With the exception of the biennial renewal fees, the Board has not revised its fees since the 1990s. The application fees are now being revised to reflect the current cost of processing an application. The inspection fees are being revised to reflect the current cost to the Board of the inspectors performing the required inspection. The biennial renewal fees were last raised in 2006. Initially, the Board conservatively raised those fees in attempt to not place a hardship on its licensees with a large increase. The Board reviews its revenues on an annual basis and subsequent reviews have shown that another increase is necessary to support its operations. The Board is again being conservative in raising fees so as not to place a hardship on its licensees. Given that a deficit is still projected, the Board will evaluate another fee increase in the future. However, if pending legislation is passed, increased revenue from the registration of pharmacy technicians and imposing investigative costs for disciplinary actions could negate the necessity to further raise renewal fees.

   At its April 17, 2007, Board meeting and again at its June 19, 2007, and March 18, 2008, Board meetings, the Bureau of Finance and Operations (BFO) presented a summary of the Board's revenues and expenses for Fiscal Years (FY) 2004-2005, 2005-2006 and 2006-2007, and projected revenues and expenses for FYs 2007-2008--2013-2014. The summary, presented in the following table, demonstrated that the Board must raise fees to maintain a positive balance after the pharmacist renewal takes place in the even-numbered years.

2004-2005 beginning balance 324,955.04
FY 04-05 revenue2,304,562.44
FY 04-05 expenses 1,655,000.00
Remaining balance 974,517.48
2005-2006 beginning balance 974,517.48
FY 05-06 revenue 529,381.83
FY 05-06 expenses 1,850,000.00
Remaining balance (346,100.69)
2006-2007 beginning balance (346,100.69)
FY 06-07 revenue 3,035,093.83
Prior year returned funds 122,155.06
Adjust for prior year expenses 243,901.49
FY 06-07 projected expenses 1,788,000.00
Remaining balance 779,206.71
2007-2008 beginning balance 779,206.71
FY 07-08 projected revenue 500,000.00
Prior year returned funds576,709.95
FY 07-08 projected expenses 1,842,000.00
Remaining balance (24,665.09)
2008-2009 beginning balance (24,665.09)
FY 08-09 projected revenue 3,000,000.00
FY 08-09 projected expenses 1,934,000.00
Remaining balance 1,041,334.91
2009-2010 beginning balance 1,041,334.91
FY 09-10 projected revenue 502,000.00
FY 09-10 projected expenses2,031,000.00
Remaining balance (726,925.77)
2010-2011 beginning balance (726,925.77)
FY 10-11 projected revenue 3,866,000.00
FY 10-11 projected expenses 2,133,000.00
Remaining balance 1,325,334.91
2011-2012 beginning balance1,325,334.91
FY 11-12 projected revenue 582,000.00
FY 11-12 projected expenses 2,240,000.00
Remaining balance (332,665.09)
2012-2013 beginning balance (332,665.09)
FY 12-13 projected revenue 3,866,000.00
FY 12-13 projected expenses 2,352,000.00
Remaining balance 1,181,334.91
2013-2014 beginning balance 1,181,334.91
FY 13-14 projected revenue 582,000.00
FY 13-14 projected expenses 2,470,000.00
Remaining balance (706,655.09)

   As the table indicates, at the close of FY 2005-2006, the Board's expenses exceeded its revenues by $346,100.69. While the pharmacist renewal brought the Board's account back to a positive balance in FY 2006-2007, in FY 2007-2008, the Board will run at a deficit again and in the off-renewal years the Board will continue to have a deficit. BFO anticipates that the proposed new fees will enable the Board to recapture the deficits every other year.

   The increases in the Board's biennial expenses occurred primarily in administrative costs and law enforcement costs. Administrative costs increased from approximately $343,682 in FY 2005-2006 to approximately $513,063 in FY 2006-2007. Law enforcement (the Bureau of Enforcement and Investigation) expenditures increased from approximately $551,194 in FY 2005-2006 to approximately $630,080 in FY 2006-2007. Legal office costs remained about the same, however the number of complaints filed continued to rise from previous years. Administrative costs likely increased because the Board began receiving applications for the authority to administer injectable medications, immunizations and biologicals. Additionally, vacant pharmacy inspector positions were filled which led to the increase in law enforcement costs both due to the salaries and the increased inspections the additional inspectors performed.

   The Board carefully reviewed several options in fee increases to ensure the lowest fee increase possible while keeping the Board out of a long run deficit. Before the Board dramatically raises its renewal fees it prefers to wait until two pieces of legislation that would bring significantly more revenue to the Board complete their journey through the legislative process. If either of these pieces of legislation fails to be enacted during this legislative session, the Board will reevaluate. In addition to increasing fees, the Board is looking at ways to streamline procedures to cut costs; however, the fee increases are still necessary to maintain a positive balance in the Board account in the long run. Finally, in developing the proposal, the Board reviewed fees of other states. It found that the proposed fees are comparable to the renewal fees charged in surrounding states and should cause no competitive disadvantage to the Commonwealth.

Description of Proposed Amendment

   Based upon the previous expense and revenue estimates provided to the Board, the Board proposes to amend§  27.91 to increase the fee for biennial renewal of licenses for pharmacists from $150 to $190 and increase the biennial renewal fee for pharmacy permits from $100 to $125. The Board is also proposing to increase the application fee for a pharmacy intern certificate from $30 to $35, the application fee for a pharmacist license from $40 to $45, the application fee for a new pharmacy permit from $100 to 125, the fee for reinspection of a new pharmacy after failure at first inspection from $90 to $115, the application fee for a pharmacy permit change without inspection from $30 to $45 and the application fee for a pharmacy permit change when inspection required from $95 to $125.

Fiscal Impact

   The proposed amendment will increase the biennial renewal fees for pharmacists and pharmacies as well as several other fees the Board charges for its services to applicants. The proposed amendment should have no other fiscal impact on the private sector, the general public or political subdivisions.

Paperwork Requirements

   The proposed amendment will require the Board to alter some of its forms to reflect the new biennial renewal fees; however, the proposed amendment should not create additional paperwork for the private sector.

Sunset Date

   The act requires that the Board monitor its revenue and expenses on a FY and biennial basis. Therefore, no sunset date has been assigned.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), the Board submitted a copy of this proposed rulemaking on August 18, 2008, to the Independent Regulatory Review Commission (IRRC), the Senate Consumer Protection and Professional Licensure Committee and the House Professional Licensure Committee (Committees). In addition to submitting the proposed amendment, the Board has provided IRRC and the committees with a copy of a detailed Regulatory Analysis Form prepared by the Board. A copy of this material is available to the public upon request.

   Under section 5(g) of the Regulatory Review Act, if IRRC has comments, recommendations or objections regarding any portion of the proposed rulemaking, it will notify the Board within 30 days after the close of the public comment period. The notification must specify the regulatory review criteria that have not been met. The Regulatory Review Act specifies detailed procedures for review of comments, recommendations and objections by the Board, the General Assembly and the Governor prior to publication of the amendment.

Public Comment

   Interested persons are invited to submit written comments, recommendations or objections regarding this proposed rulemaking to Melanie Zimmerman, Executive Secretary, State Board of Pharmacy, P. O. Box 2649, Harrisburg, PA 17105-2649, within 30 days following publication of this proposed amendment in the Pennsylvania Bulletin.


   Fiscal Note: 16A-5422. No fiscal impact; (8) recommends adoption.

Annex A






§ 27.91. Schedule of fees.

   An applicant for a license, certificate, permit or service shall pay the following fees at the time of application:

   Application for pharmacy intern certifi-
cate  [$30] $35

   Application for pharmacist license  [$40] $45

*      *      *      *      *

   Registered pharmacist biennial re-
newal  [$150] $190

*      *      *      *      *

   New pharmacy permit application  [$100] $125

   Reinspection of new pharmacy after failure
at first inspection  [$90] $115

   Pharmacy permit change without inspec-
tion  [$30] $45

   Pharmacy permit change when inspection
required  [$95] $125

*      *      *      *      *

   Biennial renewal of pharmacy permit  [$100] $125

*      *      *      *      *

[Pa.B. Doc. No. 08-1592. Filed for public inspection August 29, 2008, 9:00 a.m.]

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