BILL ANALYSIS
AB 1071
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
AB 1071 (Emmerson) - As Introduced: February 27, 2009
SUBJECT : Pharmacy: fees.
SUMMARY : Increases the minimum and maximum fees that the
California State Board of Pharmacy (Board) may charge under its
license and fee schedule. Specifically, this bill :
1)Establishes the amount of fees and penalties that fixed by the
board according to the following schedule:
a) The fee for an initial nongovernmental pharmacy license
shall be four hundred dollars ($400) and may be increased
to five hundred twenty dollars ($520). The fee for the
issuance of a temporary nongovernmental pharmacy permit
shall be two hundred fifty dollars ($250) and may be
increased to three hundred twenty-five dollars ($325).
b) The fee for a renewal nongovernmental pharmacy license
shall be two hundred fifty dollars ($250) and may be
increased three hundred twenty-five dollars ($325).
c) The fee for the initial pharmacist application and
examination shall be two hundred dollars ($200) and may be
increased to two hundred sixty dollars ($260).
d) The fee for regrading an examination shall be ninety
dollars ($90) and may be increased to one hundred fifteen
dollars ($115). If an error in grading is found and the
applicant passes the examination, the regrading fee shall
be refunded.
e) The fee for a renewal pharmacist license shall be one
hundred fifty dollars ($150) and may be increased to one
hundred ninety-five dollars ($195).
f) The fee for an initial and renewal nongovernmental
wholesaler license shall be six hundred dollars ($600), and
may be increased to seven hundred eighty dollars ($780).
The application fee for any additional location after
licensure of the first 20 locations shall be two hundred
AB 1071
Page 2
twenty-five dollars ($225) and may be increased to three
hundred dollars ($300). A temporary license fee shall be
five hundred fifty dollars ($550) and may be increased to
seven hundred fifteen dollars ($715).
g) The fee for an initial and renewal hypodermic license
shall be one hundred twenty-five dollars ($125) and may be
increased to one hundred sixty-five dollars ($165).
h) The fee for an initial application, investigation, and
license as a designated representative shall be two hundred
fifty-five dollars ($255) and may be increased to three
hundred thirty dollars ($330). The fee for the renewal
license as a designated representative shall be one hundred
fifty dollars ($150) and may be increased to one hundred
ninety-five dollars.
i) The fee for the application, investigation, and license
as a designated representative for a veterinary food-animal
drug retailer fifty-five dollars ($255) and may be
increased to three hundred thirty dollars ($330). The fee
for renewal license as a designated representative for a
veterinary food-animal drug retailer shall be one hundred
fifty dollars ($150) and may be increased to one hundred
ninety-five dollars ($195).
j) The application fee for an initial nonresident
wholesaler license shall be six hundred dollars ($600) and
may be increased to seven hundred eighty dollars ($780).
For nonresident wholesalers who have 21 or more facilities
operating nationwide the application fees for the first 20
locations shall be six hundred dollars ($600) and may be
increased to seven hundred eighty dollars ($780). The
application fee for any additional location after licensure
of the first 20 locations shall be two hundred twenty-five
dollars ($225) and may be increased to three hundred
dollars ($300). A temporary license fee shall be five
hundred fifty dollars ($550) and may be increased to seven
hundred fifteen dollars ($715). The fee for a renewal
nonresident wholesaler's license shall be six hundred
dollars ($600) and may be increased to seven hundred eighty
dollars ($780).
aa) The fee for an initial intern pharmacist license shall
be ninety dollars ($90) and may be increased to one hundred
AB 1071
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fifteen dollars ($115). The fee for transfer of intern
hours or verification of licensure to another state shall
be twenty-five dollars ($25) and may be increased to thirty
dollars ($30).
bb) The Board may waive or refund the additional fee for the
issuance of a license where the license is issued less than
45 days before the next regular renewal date.
cc) The fee for the reissuance of any license, or renewal
thereof, that has been lost or destroyed or reissued due to
a name change shall be thirty-five dollars ($35) and may be
increased to forty-five dollars ($45).
dd) The fee for the reissuance of any license, or renewal
thereof, that must be reissued because of a change in the
information, shall be one hundred dollars ($100) and may be
increased to one hundred thirty dollars ($130).
ee) The fee for any applicant for an initial nongovernmental
clinic license shall be four hundred dollars ($400) and may
be increased to five hundred twenty dollars ($520) for each
license. The fee a renewal license shall be two hundred
fifty dollars ($250) and may be increased to three hundred
twenty-five dollars ($325) for each license.
ff) The fee for the issuance of an initial pharmacy
technician license shall be eighty dollars ($80) and may be
increased to one hundred five dollars ($105). The fee for
a renewal pharmacy technician license shall be one hundred
dollars ($100) and may be increased to one hundred thirty
dollars ($130).
gg) The fee for an initial veterinary food-animal drug
retailer license shall be four hundred five dollars ($405)
and may be increased to four hundred twenty-five dollars
($425). The renewal fee for a veterinary food-animal drug
retailer license shall be two hundred fifty dollars ($250)
and may be increased to three hundred twenty-five dollars
($325).
hh) The fee for issuance of a retired license shall be
thirty-five dollars ($35) and may be increased to
forty-five dollars ($45).
AB 1071
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ii) The fee for an initial or renewal nongovernmental
license to compound sterile drug products shall be six
hundred dollars ($600) and may be increased to seven
hundred eighty dollars ($780). The fee for a temporary
license shall be five hundred fifty dollars ($550) and may
be increased to seven hundred fifteen dollars ($715).
EXISTING LAW :
1)Provides for the licensure and regulation of pharmacies,
pharmacists, pharmacy technicians, wholesalers of dangerous
drugs or devices, and others by the Board.
2)Establishes the Pharmacy Board Contingent Fund (Fund) and
authorizes the board to collect fees for its services.
3)Imposes fees on persons and pharmacies for, among other
things, application, examination, licensure, and licensure
renewal. These fees are fixed by the Board based on a fee
schedule that sets forth the minimum and maximum fees.
1)Establishes the amount of fees and penalties that fixed by the
board according to the following schedule:
a) The fee for an initial nongovernmental pharmacy license
shall be three hundred forty dollars ($340) and may be
increased to four hundred dollars ($400).
b) The fee for a renewal nongovernmental pharmacy license
shall be one hundred seventy-five dollars ($175) and may be
increased to two hundred fifty dollars ($250).
c) The fee for the pharmacist application and examination
shall be one hundred fifty-five dollars ($155) and may be
increased to one hundred eighty-five dollars ($185).
d) The fee for regrading an examination shall be
seventy-five dollars ($75) and may be increased to
eighty-five dollars ($85). If an error in grading is found
and the applicant passes the examination, the regrading fee
shall be refunded.
e) The fee for an initial and renewal pharmacist license
shall be one hundred fifteen dollars ($115) and may be
increased to one hundred fifty dollars ($150).
AB 1071
Page 5
f) The fee for an initial and renewal nongovernmental
wholesaler license shall be five hundred fifty dollars
($550) and may be increased to six hundred dollars ($600).
g) The fee for an initial and renewal hypodermic license
shall be ninety dollars ($90) and may be increased to one
hundred twenty-five dollars ($125).
h) The license fee for the initial application,
investigation, and license for a designated representative
shall be one hundred eighty-five dollars ($185) and may be
increased to two hundred fifty dollars ($250). If the
applicant is not issued a license as a designated
representative, the board shall refund one hundred ten
dollars ($110) of the fee. The fee for the renewal license
as a designated representative shall be one hundred ten
dollars ($110) and may be increased to one hundred fifty
dollars ($150).
i) The fee for the application, investigation, and issuance
of an initial license as a designated representative for a
veterinary food-animal drug retailer pursuant to Section
4053 shall be two hundred fifty dollars ($250). If the
applicant is not issued a license as a designated
representative, the board shall refund one hundred fifty
dollars ($150) of the fee. The fee for the renewal license
as a designated representative for a veterinary food-animal
drug retailer shall be one hundred ten dollars ($110).
j) The application fee for an initial nonresident
wholesaler's license shall be five hundred fifty dollars
($550) and may be increased to six hundred dollars ($600).
For nonresident wholesalers who have 21 or more wholesaler
facilities operating nationwide the application fees for
the first 20 locations shall be five hundred fifty dollars
($550) and may be increased to six hundred dollars ($600).
The application fee for any additional location after
licensure of the first 20 locations shall be two hundred
twenty-five dollars ($225) and may be increased to three
hundred dollars ($300). The fee for a renewal nonresident
wholesaler's license shall be five hundred fifty dollars
($550) and may be increased to six hundred dollars ($600).
aa) The fee for evaluation of continuing education courses
AB 1071
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for accreditation shall be set by the board at an amount
not to exceed forty dollars ($40) per course hour.
bb) The fee for an initial intern pharmacist license shall
be sixty-five dollars ($65) and may be increased to
seventy-five dollars ($75). The fee for transfer of intern
hours or verification of licensure to another state shall
be fixed by the board not to exceed twenty dollars ($20).
cc) The board may waive or refund the additional fee for
the issuance of a certificate where the certificate is
issued less than 45 days before the next regular renewal
date.
dd) The fee for the reissuance of any license, or renewal
thereof, that has been lost or destroyed or reissued due to
a name change is thirty dollars ($30).
ee) The fee for the reissuance of any license, or renewal
thereof, that must be reissued because of a change in the
information, is sixty dollars ($60) and may be increased to
one hundred dollars ($100).
ff) It is the intent of the Legislature that the Board
shall seek to maintain a reserve in the Fund equal to
approximately one year's operating expenditures.
gg) The fee for any applicant for an initial
nongovernmental clinic permit is three hundred forty
dollars ($340) and may be increased to four hundred dollars
($400) for each permit. The fee a renewal permit is one
hundred seventy-five dollars ($175) and may be increased to
two hundred fifty dollars ($250) for each permit.
hh) The Board shall charge a fee for the processing and
issuance of a license to a pharmacy technician and a
separate fee for license renewal. The initial license fee
shall be twenty-five dollars ($25) and may be increased to
fifty dollars ($50). The renewal fee shall be twenty-five
dollars ($25) and may be increased to fifty dollars ($50).
ii) The fee for an initial veterinary food-animal drug
retailer license shall be four hundred dollars ($400). The
renewal fee for a veterinary food-animal drug retailer
shall be two hundred fifty dollars ($250).
AB 1071
Page 7
jj) The fee for issuance of a retired license shall be
thirty dollars ($30).
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill . According to the author's office, "AB 1071
adjusts application and renewal fees to ensure that the Board of
Pharmacy has sufficient funds to fulfill all of its statutory
obligations as a consumer protection agency. The Board has
waited as long as it could to increase its fees. This bill also
builds in a cap to increase future fees by no more than 30
percent? The Board's licensee population has grown 20 percent
over the last five years, yet the size of the board staff
remains constant. The Board has aggressively reviewed its
business processes and streamlined where appropriate, yet is
unable to achieve any additional cost savings. Currently, the
board regulates 112,000 licensees and adds approximately 4,500
licensees per year.
"The Board recently underwent an independent fee audit to
determine the real cost to process applications and license
renewals. The audit found that the Board's expenditures were
exceeding its revenues resulting in draining the contingent fund
balance. Additionally, the current fee structure is
insufficient to maintain the 12 month reserve required by
statute. Without a fee increase, the board's contingent fund
will be reduced to an eight-month reserve by the end of fiscal
year 2009-10 and will only have a one-month reserve by the end
of fiscal year 2011-12."
Background . The Board was established in 1891 to protect
consumers by licensing and regulating all aspects of the
pharmacy practice in California, including pharmacists, pharmacy
practice, and prescription drugs and devices. The Board also
regulates wholesalers, specialized facilities, and other
practitioners such as pharmacist technicians and interns. The
Board's activities are financed through fees related to
application and license-processing services. The Board oversees
112,000 licenses and has 60 staff. Licensee growth has grown in
the following manner from 1993 to 2008: licensed pharmacists
increased from 26,159 to 36,171; licensed pharmacy technicians
increased from 8,229 to 55,305; and, all other types of
AB 1071
Page 8
licensees have increased from 9,070 to 17,981.
Support . According to the Board, the last statutory maximum fee
increase was in 1987. The Board is required to maintain a
one-year fund reserve, but has been operating at a deficit. The
Board currently subsidizes the application fee for pharmacy
technicians because the majority of applicants are recent
graduates seeking employment; the fee is $123, but the applicant
only pays $50. The subsidy lessens the out-of-pocket costs for
pharmacy technicians, who receive a modest average hourly salary
of $10 to $15. The state has a workforce shortage of pharmacy
technicians due to competition with the private sector and other
states offering higher salaries in the same classification. As
a result, the Board spent $500,000 on recruitment and retention
of pharmacy technicians.
This bill builds in a cap to increase future fees by no more
than 30 percent. Under a proposed scenario that increases
license fees by 20%, Board fee revenue would increase in FY
2009-10 from a projected $8.34 million under the current fee
structure to $9.18 million, and would increase in FY 2010-11
from a projected $8.49 million to $10.18 million. Data provided
by the Board shows that if fees are not increased, the Board
will have a negative Fund balance beginning in FY 2012-13, of
$1.58 million. Under a 20% increase scenario, the Fund balance
would gradually increase over the years and would carry a $9.27
million Fund balance in FY 2014-15. A table of the proposed
changes has been provided:
------------------------------------------------------------------
| Fee | Actual | CY | | | | |
| | 2007-08 | 2008-09 | 2009-10 | 2010-11 |2011-12 |2012-13 |
|--------+---------+---------+---------+---------+--------+--------|
|Current | $10,884 | $8,999 | $7,566 | $4,786 | $1,729 |$(1,584)|
| | | | | | | |
|--------+---------+---------+---------+---------+--------+--------|
| | | | | | | |
| (+20%) | $10,884 | $8,999 | $7,566 | $8,342 | $8,911 |$9,266 |
------------------------------------------------------------------
* Dollars in thousands
The board last sought a fee bill in 1987 (Chapter 657) where the
current minimum and maximum fees were established in statute.
AB 1071
Page 9
The Board provided the following current license fee schedule
and proposed fee changes:
-----------------------------------------------------------------------
|License Type |Application|Renewal |Application|Renewal |
| | Fee |Fee | Fee |Fee |
| |(Current) | |(Proposed) |(Proposed|
| | | | |) |
|----------------------------+-----------+--------+-----------+---------|
|Pharmacy | $340 - | $175 - | $400 - | $250 - |
| | $400 | $250 | $520 | $325 |
|----------------------------+-----------+--------+-----------+---------|
|4400(a) & (b) | | | | |
|----------------------------+-----------+--------+-----------+---------|
| Temporary Fee | $175 - | n/a | $250 - | n/a |
| | $250 | | $325 | |
|----------------------------+-----------+--------+-----------+---------|
|Pharmacist Examination | $ 155 - | n/a | $200 - | n/a |
| | $185 | | $260 | |
|----------------------------+-----------+--------+-----------+---------|
|4400 (c) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Pharmacist Examination | $75 - $85 | n/a |$90 - $115 | n/a |
|Regrade | | | | |
|----------------------------+-----------+--------+-----------+---------|
|4400 (d) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Pharmacist License | $115 - | $115 - | $150 - | $150 - |
| | $150 | $150 | $195 | $195 |
|----------------------------+-----------+--------+-----------+---------|
|4400 (e) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Hypodermic Needle and |$90 - $125 | $90 - | $125 - | $125 - |
|Syringe 4400 (g) | | $125 | $165 | $165 |
|----------------------------+-----------+--------+-----------+---------|
|Designated Representative* | $185 - | $110 - | $255 - | $150 - |
| | $250 | $150 | $330 | $195 |
|----------------------------+-----------+--------+-----------+---------|
|4400 (h)(1) & (h)(2) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Designated Representative - | $250 | $110 | $255 - | $150 - |
|Food Animal Drug Retailer | | | $330 | $195 |
|----------------------------+-----------+--------+-----------+---------|
AB 1071
Page 10
|4400 i(1) & i(2) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Intern Pharmacist | $65 - $75 | n/a |$90 - $115 | n/a |
|----------------------------+-----------+--------+-----------+---------|
|4400 (l) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|License Type |Application|Renewal |Application|Renewal |
| | Fee |Fee | Fee |Fee |
| |(Current) | |(Proposed) |(Proposed|
| | | | |) |
|----------------------------+-----------+--------+-----------+---------|
|Clinic | $340 - | $175 - | $400 - | $250 - |
| | $400 | $250 | $520 | $325 |
|----------------------------+-----------+--------+-----------+---------|
|4400 (q) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Pharmacy Technician | $25 - $50 | $25 - |$80 - $105 | $100 - |
| | | $50 | | $130 |
|----------------------------+-----------+--------+-----------+---------|
|4400 (r) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Veterinary Food-Animal Drug | $400 | $250 | $405 - | $250 - |
|Retailer 4400 (s) | | | $425 | $325 |
|----------------------------+-----------+--------+-----------+---------|
|Sterile Injectable | $500 - | $500 - | $600 - | $600 - |
|Compounding Pharmacy 4400 | $600 | $600 | $780 | $780 |
|(u) | | | | |
|----------------------------+-----------+--------+-----------+---------|
| Temporary Fee | $500 - | n/a | $550 - | n/a |
| | $600 | | $715 | |
|----------------------------+-----------+--------+-----------+---------|
|Wholesaler | $550 - | $550 - | $600 - | $600 - |
| | $600 | $600 | $780 | $780 |
|----------------------------+-----------+--------+-----------+---------|
|4400 (f) | | | | |
|----------------------------+-----------+--------+-----------+---------|
| More than 20 | $225 - | | $225 - | |
|locations | $300 | | $300 | |
|----------------------------+-----------+--------+-----------+---------|
| Temporary fee | $550 - | n/a | $550 - | n/a |
| | $600 | | $715 | |
|----------------------------+-----------+--------+-----------+---------|
|Nonresident Wholesaler | $550 - | $550 - | $600 - | $600 - |
| | $600 | $600 | $780 | $780 |
|----------------------------+-----------+--------+-----------+---------|
AB 1071
Page 11
|4400 (j)(1) & (j) (3) | | | | |
|----------------------------+-----------+--------+-----------+---------|
| More than 20 | $225 - | n/a | $225 - | n/a |
|locations | $300 | | $300 | |
|----------------------------+-----------+--------+-----------+---------|
| Temporary fee | $550 - | n/a | $550 - | n/a |
| | $600 | | $715 | |
|----------------------------+-----------+--------+-----------+---------|
|OTHER | | | | |
|----------------------------+-----------+--------+-----------+---------|
|License Transfer/Transfer | $20 | n/a | $25 - $30 | n/a |
|Intern hours | | | | |
|----------------------------+-----------+--------+-----------+---------|
|4400 (l) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|License Reissuance | $30 | n/a | $35 - $45 | n/a |
|----------------------------+-----------+--------+-----------+---------|
|4400 (n) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|License Reissuance - Change |$60 - $100 | n/a | $100 - | n/a |
|of information | | | $130 | |
|----------------------------+-----------+--------+-----------+---------|
|4400 (o) | | | | |
|----------------------------+-----------+--------+-----------+---------|
|Retired Pharmacist License | $30 | n/a | $35 - $45 | n/a |
|----------------------------+-----------+--------+-----------+---------|
|4400 (t) | | | | |
-----------------------------------------------------------------------
* Includes first year of licensure
Based on the data provided by the Board, if the Board increases
license fees by a maximum of 20%, the Fund will remain solvent
and maintain a positive balance and reserve in the upcoming
years. Should the maximum fee increases be capped at 20%
instead of 30%?
REGISTERED SUPPORT / OPPOSITION :
Support
California State Board of Pharmacy (Board) (sponsor)
Opposition
AB 1071
Page 12
None on file.
Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301