BILL ANALYSIS
-----------------------------------------------------------------------
|Hearing Date:June 29, 2009 |Bill No:AB |
| |1071 |
-----------------------------------------------------------------------
SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND
ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 1071Author:Emmerson
As Introduced: February 27, 2009 Fiscal: Yes
SUBJECT: Pharmacy: fees.
SUMMARY: Increases fees charged to various licensees of the Board of
Pharmacy (Board).
Existing law:
1)Provides for the licensure and regulation of pharmacies, pharmacists
and wholesalers of dangerous drugs or devices by the Board in the
Department of Consumer Affairs (DCA).
2)Establishes a fee schedule for fees charged to various licensees of
the Board.
3)Established the Pharmacy Board Contingent Fund.
4)Requires the Board to maintain a reserve equal to one year of
operating expenditures to cushion against unexpected revenue
shortfalls.
This bill:
1)Adjusts the Board's fee schedule to:
1) Establish a fee of four hundred dollars ($400) to five hundred
twenty dollars ($520) for an initial nongovernmental pharmacy
license. Establish a fee of two hundred fifty dollars ($250) to
three hundred twenty-five dollars ($325) for a temporary
nongovernmental pharmacy license.
AB 1071
Page 2
1) Establish a fee of two hundred fifty dollars ($250) to three
hundred twenty-five dollars ($325) for renewal of a
nongovernmental pharmacy license.
1) Establish a fee of two hundred dollars ($200) to two hundred
sixty dollars ($260) for the pharmacist application and
examination.
1) Establish a fee of ninety dollars ($90) to one hundred fifteen
dollars ($115) for regrading an examination.
1) Establish a fee of one hundred fifty dollars ($150) to one
hundred ninety-five dollars ($195) for a pharmacist license and
biennial renewal.
1) Establish a fee of six hundred dollars ($600) to seven hundred
eighty dollars ($780) for a nongovernmental wholesaler license
and annual renewal. Establish a fee of two hundred twenty-five
dollars ($225) to three hundred dollars ($300) for licensing any
location after licensure of the first twenty locations.
Establish a fee of five hundred fifty dollars ($550) to seven
hundred fifteen dollars ($715) for a temporary license fee.
1) Establish a fee of one hundred twenty-five dollars ($125) to
one hundred sixty-five dollars ($165) for a hypodermic license
and renewal.
1) Establish a fee of two hundred fifty-five dollars ($255) to
three hundred thirty dollars ($330) for application,
investigation and licensure of a designated representative for a
wholesaler who meets certain requirements. Establish a fee of
one hundred fifty ($150) to one hundred ninety-five ($195) for
annual renewal of a designated representative license.
1) Establish a fee of two hundred fifty-five dollars ($255) to
three hundred thirty dollars ($330) for application,
investigation and licensure of a designated representative for a
veterinary food-animal drug retailer who meets certain
requirements. Establish a fee of one hundred fifty ($150) to one
hundred ninety-five ($195) for annual renewal of a designated
representative license.
1) Establish a fee of six hundred dollars ($600) to seven hundred
eighty dollars ($780) for a nonresident wholesaler license and
annual renewal. Establish a fee of two hundred twenty-five
AB 1071
Page 3
dollars ($225) to three hundred dollars ($300) for licensing any
location after licensure of the first twenty locations.
Establish a fee of five hundred fifty dollars ($550) to seven
hundred fifteen dollars ($715) for a temporary license fee.
1) Establish a fee of forty dollars ($40) per hour for evaluating
continuing education courses for accreditation.
1) Establish a fee of ninety dollars ($90) to one hundred fifteen
dollars ($115) for an intern pharmacist license. Establish a fee
of twenty-five dollars ($25) to thirty dollars ($30) for
transferring intern hours or verification of licensure to another
state.
1) Establish a fee of thirty-five dollars ($35) to forty-five
dollars ($45) for reissuing any license, including for a name
change, or renewing any license that has been lost or destroyed.
1) Establish a fee of one hundred dollars ($100) to one hundred
thirty dollars ($130) for reissuing any license or renewing any
license for a change in the information.
1) Establish a fee of four hundred dollars ($400) for an initial
nongovernmental clinic application and a fee of five hundred
twenty dollars ($520) for each license. Establish a fee of two
hundred fifty dollars ($250) to three hundred twenty-five dollars
($325) for a renewal of a nongovernmental clinic license.
1) Establish a fee of eighty dollars ($80) to one hundred five
dollars ($105) for a pharmacy technician license. Establish a
fee of one hundred dollars ($100) to one hundred thirty dollars
($130) for renewal of a pharmacy technician license
1) Establish a fee of four hundred five dollars ($405) to four
hundred twenty-five dollars ($425) for a veterinary food-animal
drug retailer license. Establish a fee of two hundred fifty
dollars ($250) to three hundred twenty-five dollars ($325) for
renewal of a veterinary food-animal drug retailer license.
1) Establish a fee of thirty-five dollars ($35) to forty-five
dollars ($45) for a retired license
1) Establish a fee of six hundred dollars ($600) to seven hundred
eighty dollars ($780) for a nongovernmental license or renewal to
compound sterile drug products. Establish a fee of five hundred
fifty ($550) to seven hundred fifteen ($715) for a temporary
license to compound sterile drug products.
AB 1071
Page 4
2)Authorize the board to waive or refund additional fee for issuing a
license if issued less than 45 days before the next regular renewal
date
3)Declare legislative intent that the Board maintains a reserve in the
Pharmacy Board Contingent Fund equal to approximately one year's
operating expenses.
FISCAL EFFECT: According to the Assembly Appropriations Committee,
the annual special fund revenue to the Board will be $1.8 million. The
range of the Board's fee-supported revenues will increase to between
$1.2 million and $3.5 million.
COMMENTS:
1.Purpose. The Board of Pharmacy is the sponsor of this measure.
According to the Author, "The Board has waited as long as it could
to increase its fees. The licensee population has grown 20 percent
over the last 5 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 additional cost savings. Due to the fact that the Board has
not raised their fees since 1987, and the licensee population has
increased, the current fee structure is inadequate to continue Board
operations at current levels as well as maintain the reserve
required by statute. A fee increase must be in place by January 1,
2010 to continue Board operations at current levels."
2.Background. The Board regulates 112,000 licensees and adds
approximately 4,500 licensees per year and has seen a 20 percent
increase in its licensee population over the last 5 years. The
Board notes that it has "aggressively reviewed its business
processes and streamlined where appropriate, yet is unable to
achieve any additional cost savings."
In 2008, the Department of Consumer Affairs (DCA) and the Board
contracted with a Sacramento area consulting firm to conduct an
audit of the Board's fee schedule. Among other variables, the audit
explored whether current fee levels are appropriate for the recovery
of the actual cost of conducting programs and conducted an
assessment of activity and workload for Board staff to determine an
hourly cost or cost per unit for various Board functions. The audit
found that the Board's expenditures were exceeding its revenues.
The report also showed that the current fee structure is
insufficient to maintain the 12 month reserve required. The Board
AB 1071
Page 5
notes that without a fee increase, the Board's Contingent Fund will
be reduced to an 8-month reserve by the end of fiscal year 2009-10
and will only have a 1-month reserve by the end of fiscal year
2011-12.
3.Committee Fee Bill Worksheet. Included with this analysis is a Fee
Background Information Questionnaire which was completed by the
Author's office and the Board. This Questionnaire is required by
the Committee to justify any fee increases and provide background
information on requested fee increases. The Questionnaire is to
include fund condition statements displaying 5 years of actual and 5
years of projected expenditures and revenues with
(a) current statutory maximum fee amounts and (b) proposed statutory
maximum fee amounts. It also is to include a schedule of fee
revenue by various fee "categories" displaying 5 years of actual and
5 years of projected revenue based on (a) current fees and (b)
proposed fees and includes the workload (e.g., number of licensees)
and fee charged per category. It is to provide a schedule
displaying 2 years of expenditures by program component. It is to
provide a table of comparison of existing and proposed fees which
includes the percentage by which the fee will change. Lastly, it
should provide the history for the past 10 years of legislative fee
increase authorizations.
The Worksheet sets forth the justification for the fee increases and
shows that based on data from the recent audit, the Board has
witnessed an increased licensee population without significant
staffing changes to address this increase. The supporting materials
also show a fee increase range from 2 percent to 60 percent higher
depending on the classification.
4.Why such a drastic increase for Pharmacy Technicians? As noted in
"Actual-Proposed fees with percentage change," the Pharmacy
Technician classification will see much higher licensing fees
according to the proposed schedule. According to Board staff,
applicants for a Pharmacy Technician license currently pay $50, with
the Board subsidizing the remainder of the actual license fee.
This particular classification has been highlighted as a key piece
of the state's health care workforce challenges and is expected to
see a rise in numbers due to higher pharmaceutical demands by a
growing aging population. Pharmacy Technicians work in health care
settings such as drug store pharmacies, optical goods retailers,
hospitals, and grocery stores. In most practice settings, the
primary role of a pharmacy technician is to assist pharmacists in
preparing and dispensing medication. A Board task force
AB 1071
Page 6
acknowledged the important role played by technicians in providing
patient services and meeting staffing shortages in California and
the Board spent $500, 000 on recruitment and retention of Pharmacy
Technicians .
5.Arguments in Support. The Board notes that the current minimum and
maximum fees have not been adjusted since 1987. "Over the years,
the Board has postponed seeking a fee increase as long as possible."
The Board also cites, "A review of the Consumer Price Index reveals
that the cost of consumer goods has risen steadily since 1988 by
approximately 85 percent; however, board fees have remained
unchanged." AB 1071 will allow the Board to continue to fulfill
"its statutory duties of overseeing the pharmacy Board and
protecting California consumers."
The California Pharmacists Association "supports the Board's role in
its consumer protection as well as its need to ensure sufficient
funds to carry out its mandate." The group also states that it
hopes a fee increase will allow the Board to once again perform
outreach and education activities that benefit their membership.
SUPPORT AND OPPOSITION:
Support:
California Board of Pharmacy (Sponsor)
California Pharmacists Association
Opposition:
None on file as of June 23, 2009
Consultant:Sarah Mason