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PA Bulletin, Doc. No. 05-281



[49 PA. CODE CH. 27]

Biennial Renewal Fees

[35 Pa.B. 1219]

   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 rulemaking would increase the biennial license renewal fee for pharmacists from $120 to $150 and the pharmacy permit biennial renewal fee from $75 to $100.

Effective Date

   The proposed rulemaking will be effective upon final-form publication in the Pennsylvania Bulletin. The new fees will take effect for the pharmacist biennial period beginning October 1, 2006.

Statutory Authority

   The proposed rulemaking 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) of the act 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. The Board's current biennial license renewal fees were established by regulation in 1998.

   At its February 17, 2004, Board meeting and again at its April 20, 2004, Board meeting, the Bureau of Finance and Operations (BFO) presented a summary of the Board's revenues and expenses for Fiscal Years (FY) 2001-2002 and 2002-2003 and projected revenues and expenses for FY 2003-2004 through FY 2010-2011. The summary, presented in the following table, demonstrated that the Board must raise fees to meet or exceed projected expenditures to comply with section 8.2(b) of the act.

2001-2002 beginning balance $1,047,957.15
FY 01-02 revenue 456,056.98
Prior year returned funds 153,857.90
FY 01-02 expenses 1,207,000.00
Remaining balance 450,872.03
2002-2003 beginning balance 450,872.03
FY 02-03 revenue 2,093,691.14
FY 02-03 expenses 1,270,000.00
Remaining balance 1,274,563.17
2003-2004 beginning balance 1,274,563.17
FY 03-04 projected revenue 478,000.00
FY 03-04 projected expenses 1,495,000.00
Prior year expenses 169,515.61
Remaining balance 88,047.56
2004-2005 beginning balance 88,047.56
FY 04-05 projected revenue 2,094,000.00
FY 04-05 projected expenses 1,540,000.00
Remaining balance 642,047.56
2005-2006 beginning balance$   642,047.56
FY 05-06 projected revenue500,000.00
FY 05-06 projected expenses 1,586.000.00
Remaining balance (443,952.44)
2006-2007 beginning balance(443,952.44)
FY 06-07 projected revenue 2,094,000.00
FY 06-07 projected expenses 1,634,000.00
Remaining balance 16,047.56
2007-2008 beginning balance 16,047.56
FY 07-08 projected revenue 500,000.00
FY 07-08 projected expenses 1,683,000.00
Remaining balance(1,166,952.44)
2008-2009 beginning balance (1,166,952.44)
FY 08-09 projected revenue 2,094,000.00
FY 08-09 projected expenses 1,733,000.00
Remaining balance (805,952.44)
2009-2010 beginning balance (805,952.44)
FY 09-10 projected revenue 500,000.00
FY 09-10 projected expenses 1,733,00.00
Remaining balance (2,038,952.44)
2010-2011 beginning balance (2,038,952.44)
FY 10-11 projected revenue 2,094,000.00
FY 10-11 projected expenses1,785,000.00
Remaining balance (1,729,952.44)

   As the foregoing indicates, at the close of FY 2005-2006, the Board's expenses will exceed its revenues by $443,952.44. While the pharmacist renewal will bring the Board's account back to a positive balance in FY 2006-2007, the BFO estimates that in FY 2007-2008, the deficit will increase to $1,166,952.44 if fees are not increased. The BFO anticipates that the proposed new fees will enable the Board to recapture the FY 2005-2006 deficit and meet its estimated expenditures for the FY 2006-2007 biennial cycle. The Board would operate at a slight deficit in the FY 2007-2008 pharmacy permit biennial renewal period, but that would be recaptured in the FY 2008-2009 pharmacist license biennial renewal period and the projections out to FY 2010-2011 show the Board carrying a positive balance forward.

   The increases in the Board's biennial expenses occurred primarily in law enforcement costs and legal office costs. Law enforcement (the Bureau of Enforcement and Investigation) expenditures increased from approximately $507,412 in FY 2002-2003 to approximately $713,280 in FY 2003-2004. The legal office (division of the Bureau of Professional and Occupational Affairs) expenditures increased from approximately $288,247 in FY 2002-2003 to approximately $362,304 in FY 2003-2004.

   The legal office saw an increase in the number of cases closed in calendar years 1998 through 2003. Beginning in 1998 the number of disciplinary sanctions imposed increased markedly. From 1994 through 1997 the number of disciplinary sanctions imposed never reached 100, 95 sanctions being the highest in 1995. However, from 1998 through 2003 the number of sanctions imposed never dipped below 125. Furthermore, the Board has undertaken several regulatory initiatives. Two large regulation packages, Technology and Automation and the regulations required under the act of June 28, 2002 (P. L. 673, No. 102), have been proposed, as well as other regulation packages the Board has undertaken to revise and update its regulations.

   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. In addition to increasing fees, the Board is looking at ways to streamline procedures to cut costs, but the fee increases are still necessary to maintain a positive balance in the Board account in the long run. Finally, in developing the proposed rulemaking, 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 in this Commonwealth.

Description of Proposed Amendments

   Based upon the 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 $120 to $150 and increase the biennial fee for pharmacy permits from $75 to $100. By this increase, the Board will recoup the FY 2005-2006 projected deficit in FY 2006-2007. A smaller deficit in FY 2007-2008 is projected. However, by FY 2008-2009, the Board's account should continue to carry a positive balance.

Fiscal Impact

   The proposed rulemaking will increase the biennial renewal fee for pharmacists and pharmacies. A pharmacist will pay an additional $30 for biennial renewal. A pharmacy will pay an additional $25 for biennial renewal. The proposed rulemaking should have no other fiscal impact on the private sector, the general public or political subdivisions.

Paperwork Requirements

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

Sunset Date

   The act requires that the Board monitor its revenue and expenses on a fiscal year 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)), on February 2, 2005, the Board submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the Senate Consumer Protection and Professional Licensure Committee and the House Professional Licensure Committee. A copy of this material is available to the public upon request.

   Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Board, the General Assembly and the Governor of comments, recommendations or objections raised.

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 followingpublication of this proposed rulemaking in the Pennsylvania Bulletin.


   Fiscal Note: 16A-5414. 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:

*      *      *      *      *

Registered pharmacist biennial renewal[$120] $150
*      *      *      *      *

Biennial renewal of pharmacy permit[$75] $100

*      *      *      *      *

[Pa.B. Doc. No. 05-281. Filed for public inspection February 11, 2005, 9:00 a.m.]

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