Representing Pharmacies and Pharmacists In State Licensing Board Proceedings - K&L Gates LLP

2006 Developments in Pharmacy Law Seminar XVII
Joint Conference of the American Society for Pharmacy Law &
                    National Association of Chain Drug Stores
            Sanibel Harbour Resort & Spa - Fort Myers, Florida

                Representing Pharmacies and
                Pharmacists In State Licensing
                          Board Proceedings
                                             Raymond P. Pepe
                                             rpepe@klng.com
                                                717.231.5988

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Representing Pharmacies and Pharmacists
In State Licensing Board Proceedings
By Raymond P. Pepe*

Proceedings before state pharmacy licensing boards may involve disciplinary proceedings, disputes
regarding the issuance of licenses, certifications or approvals to individuals or facilities, and proceedings
pertaining to the development of pharmacy board policies and regulations. The effective representation
of pharmacies and pharmacists in these proceedings depends in large measure on the understanding and
proper application of principles of state administrative practice and procedure unique to each of these
types of proceedings as applied in the context of pharmacy law.

Critical Issues in Disciplinary Proceedings
Identifying and Protecting the Interests of Diverse Parties
Because disciplinary board proceedings may involve multiple parties, including pharmacies,
pharmacists, technicians, pharmacy owners and other persons, it is essential at the outset of any
proceeding to identify how the interests of various parties will potentially be affected and to explore the
benefits and costs of using separate counsel for all parties versus common counsel for all or some subset
of the affected parties. The ethical issues regarding when the representation of two or more parties is
permissible, the types of notifications and cautions necessary regarding any use of common counsel, and
the need for joint-defense agreements to protect attorney-client privilege are generally well understood.
What is less well understood is the need to forge constructive working relationships among counsel for
multiple parties and the strategic advantages that may be obtained through the use of separate counsel
even when separate representation does not appear to otherwise be required or warranted.

One of the greatest risks of using separate counsel for parties whose interests diverge is that the zeal
of counsel for individual parties to protect their specific interests will generate a suboptimal outcome
for all parties to a proceeding. While inevitably in some circumstances the representation of individual
interests is of necessity a zero-sum game, in far too many other instances the failure of counsel to
work together cooperatively to promote the common interest of all parties forfeits opportunities to
resolve controversies in a more desirable manner. Unfortunately, there is no general formula or specific
approach to follow to avoid these problems. Instead, it is imperative for parties to proceedings to
select mature representatives with sound judgment who can work together well and effectively pursue
opportunities to promote the common interests of all parties to proceedings, while at the same time being
realistic and honest in recognizing the pragmatic imperatives essential to protecting the interests of their
individual clients. Counsel should also be selected with experience in dealing with pharmacy (or similar
licensing board) proceedings in the jurisdiction involved, because the customs and practices of boards is
often unique and not well documented.

* Raymond P. Pepe is a partner in the Harrisburg Office of the law firm of Kirkpatrick & Lockhart Nicholson Graham LLP, 17
  North Second Street, 18th Floor, Harrisburg, PA, 17101-1507, Mr. Pepe can be reached on 717.231.5988 or at rpepe@klng.com.

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Even where the interests of multiple parties to proceedings do not materially diverge, it is also worth
 considering at the outset of any engagement whether the use of separate counsel will be strategically
 beneficial. For example, where the outcome of proceedings turn on the credibility of parties not
 themselves the target of disciplinary complaints and who face little realistic risk of sanctions, but whose
 interests technically diverge from those of other parties, the perceived independence and reliability of
 testimony offered by such parties may be enhanced by separate representation. In addition, during the
 investigatory stages of proceedings and in the course of the consideration of settlement options, the use
 of separate counsel for such parties may open-up avenues of access to information and create alternative
 channels for communication that may not be equally available to counsel for the primary target of
 disciplinary proceedings.

 Identifying Sources for Third-Party Recovery
 Various forms of insurance coverage may be available to parties to disciplinary proceedings and for
 other persons affected by the outcome of such proceedings. Coverage that may be available includes
 not only professional liability insurance, but may also involve errors and omissions policies, officers and
 directors coverage, business interruption insurance and fidelity policies which may provide coverage
 for losses incurred due to unlawful conduct or a breach of fiduciary duty. Far too often, however,
 parties either fail to recognize that coverage may be available either to cover losses incurred or the cost
 of representation, or conclude that coverage is not available based upon a cursory review of policy
 provisions and discussions with the representatives of agents or representatives of insurers who may
 be either ill-informed or less than candid in discussions of policy provisions. The failure to promptly
 evaluate and identify sources of coverage also often leads to the loss of otherwise available coverage
 when notice is not provided in a timely manner to insurers regarding claims.

 To evaluate the availability of insurance coverage, at the outset of any significant controversies, a careful
 assessment should be conducted of current and prior insurance policies and guidance sought regarding
 any ambiguous policy provisions. Where the consequences of adverse outcomes in disciplinary
 proceedings are substantial, it may be worthwhile to have a review of available insurance coverage
 reviewed by specialized counsel experienced in the protection of policyholder interests.

 To the extent coverage may be available, care should be taken to ensure that written instructions are
 provided insurance brokers directing them to provide appropriate written notficiations to affected
 carriers. In this regard, it is important to recognize that many brokers may not operate as agents of
 various insurers and only as sales representatives, and therefore notice to a broker may not constitute
 notice to the insurer. Accordingly, it is important to follow-up any initial discussions with brokers
 regarding the provision of notice to carriers to ensure that notice is actually provided and to ensure that
 brokers do not make independent judgments in questionable cases regarding the availability of insurance
 benefits.

 In addition to evaluating potential sources of insurance coverage, parties to disciplinary proceedings
 should also determine whether proceedings trigger any relevant hold harmless or indemnity agreements.
 Depending upon the facts and circumstances, indemnities may be available for violations of professional
 standards that occurred in a pharmacy prior to the purchase of a pharmacy or its assets. Likewise, when
 help-supply services are utilized to provide pharmacists, technicians or other employees, the agreement
 with the help-supply agency may provide indemnities for misconduct of the personnel supplied by the
 agency.

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Developing Strategies Based Upon a Risk-Assessment
While some pharmacy boards have adopted schedules of fines and sanctions associated with various
types of violations, more typically no formal guidelines or standards exist to guide a board in imposing
sanctions for misconduct. Instead, the only guidance provided is frequently simply the maximum
permissible sanctions authorized by law. As a result, in many jurisdictions even minor violations result
in the issuance of a rule to show cause why licenses or permits should not be suspended or revoked for
alleged violations and why the maximum permissible fines and monetary penalties authorized by law
should not be imposed. In these circumstances, it is critical at the outset of any engagement to initiate
research regarding the types of sanctions historically levied by the board for the type of conduct alleged.
Even where boards maintain formal penalty guidelines, such research is warranted to determine whether
and to what extent actual board practices deviate from published standards. Unfortunately, this research
may need to be performed “on site” since frequently these types of administrative decisions are not
published or reported electronically. Such research should never be discounted, however, since it often
reveals information remarkably inconsistent with demands made by prosecuting counsel.

Research regarding the likely range of sanctions that may be imposed by boards will provide guidance
helpful in determining whether and to what extent to vigorously contest allegations of professional
misconduct or to initiate settlement discussions with board counsel. In addition, such research typically
provides valuable insight critical to the successful negotiation of settlement agreements and may provide
a basis to contest the imposition of sanctions inconsistent with board precedents. Under the law of most
states, it is arbitrary and capricious for boards to deviate substantially from its precedents and established
practices without good cause.

In addition to reviewing the pattern of sanctions imposed by licensing boards, it is also important to
evaluate the potential collateral consequences of adverse board actions. For example, under CMS
Medicare Provider Agreements and State Medicaid Provider Agreements, changes in information
regarding “adverse legal actions” previously reported must typically be updated within 30 to 90 days of
the changes occurring. Once this information is reported, CMS or State Medicaid agencies may initiate
proceedings to revoke provider agreements. If this occurs, federal and state law typically prevents
the transfer of a pharmacy or its assets to certain related parties to avoid the impact of any debarment.
Comparable provisions are also often included in other public and private participating provider
agreements.

Mortgages, franchise agreements and loan documents may also require the prompt reporting of
disciplinary actions taken against pharmacies and pharmacy personnel. Once reported, lenders may
enjoy broad discretion to declare defaults and accelerate loan payment obligations. Fortunately, the
prompt reporting of disciplinary proceedings and the full disclosure of the outcome of proceedings often
enables pharmacies to avoid the revocation of provider agreements or debarment from participation
in public healthcare benefit plans. Conversely, the failure to promptly report such information and
incorrect characterization of the outcome of proceedings may in itself provide a basis for suspension
or revocation of provider agreements or debarment, even for violations which in themselves may be
comparatively minor.

Clearly Defining Administrative Procedures
State administrative procedures acts and rules of procedure may vary substantially from jurisdiction to
jurisdiction and many licensing boards may not have clearly established rules of procedure to govern
disciplinary proceedings. Board rules of procedure may also provide certain options to parties to

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disciplinary proceedings, such as allowing matters to proceed before hearing examiners who will issue
 reports and recommendations for review by boards or alternatively allowing contested proceedings to be
 conducted directly before boards. Options may also exist to seek informal conferences with designated
 board members or third parties to seek the informal resolution of proceedings in a manner similar to
 mediation. Developing the most effective and suitable approach to the representation of parties to board
 proceedings requires an understanding of the options available.

 At the outset of proceedings, a thorough review should be conducted regarding applicable rules of
 procedure and administrative practices with a focus on identifying service requirements, deadlines,
 discovery mechanisms (if any), requirements for pre-hearing reports and conferences, the availability
 of various types of procedural and dispositive motions, opportunities for briefing and argument, and
 post-hearing remedies, including requests for reconsideration of adverse determinations. Because board
 practices are often highly informal and subject to change, in order to clearly understand and be able to
 take advantage of available procedural options, there is no substitute for a pre-hearing conference in which
 a full discussion of procedural requirements occurs.

 In pre-hearing conferences, it is essential to obtain not only a clear understanding of the applicable rules
 of procedure, but also to identify the expectations and particular requirements of individual hearing
 officers or boards. Care should be taken, however, not to make premature commitments regarding the
 management of a case that may limit available procedural options. Instead, the goal should be to clearly
 understand the applicable administrative rules and requirements, while preserving as much flexibility as
 possible to change strategies and procedural approaches to a case as proceedings unfold.

 One important goal to pursue in evaluating relevant administrative procedures is to ensure a fair and
 level playing field upon which to mount a defense of disciplinary charges. While due process requires
 a separation of functions between prosecutorial and adjudicative officers, the disqualification of board
 members or hearing officers subject to potential bias, prohibits ex parte communications, and limits
 the use of administrative notice of facts and information outside the official record, the extent to which
 these protections exist in practice may deviate substantially. Understanding the extent to which such
 protections are actually provided in any particular jurisdiction is both helpful in developing strategies
 for the presentation of a defense, but may also provide potential grounds for a successful appeal of any
 adverse adjudications. Careful attention to due process requirements and a frank discussion of the mutual
 expectations of adverse parties may also make participants in disciplinary proceedings more attune to the
 necessity to conduct fair and impartial hearings.

 An additional goal that should be pursued in discussions regarding rules of administrative procedure
 is to take appropriate measures to protect the confidentiality of information. These measures, where
 appropriate, should not only insure that potentially damaging information is submitted under seal, but
 also that appropriate orders and authorizations are obtained for the disclosure of protected health care
 information subject to HIPPA protections.

 Taking Full Advantage of Available Discovery
 In many types of disciplinary proceedings, nothing approaching discovery available under the applicable
 rules of civil procedure exists. Instead, evidence likely to be presented at a hearing by prosecuting
 counsel can sometimes only by identified by allegations included in disciplinary complaints or rules to
 show cause, pre-hearing reports and through the filing of freedom of information requests. Assertions of
 privileges to preserve the confidentiality of investigative reports and the attorney work product of board
 counsel may also severely limit access to information in advance of hearings.

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The absence of traditional discovery mechanisms in professional licensing proceedings may or may not
pose problems depending upon the facts or circumstances of particular cases. The inability of counsel
defending parties to disciplinary proceedings to obtain access to evidence likely to be presented in a
hearing is typically mirrored by the inability of prosecuting counsel to similarly obtain information from
parties subject to disciplinary complaints and from prospective witnesses. How the risks and benefits
associated with the limited access to pre-hearing information affects a particular case requires a careful
exercise of judgment by counsel.

To the extent access to evidence likely to be presented by board counsel in advance of a hearing
is determined to be important to the presention of an effective defense, several options should be
considered to obtain the required information. Requests should be routinely made to conduct file
reviews of all public information available regarding parties to proceedings in the possession of
licensing boards. Motions can be filed with hearing officers or boards requesting the issuance of pre-
hearing orders requiring the disclosure of witnesses, exhibits, expert reports and any and all exculpatory
evidence in the possession of prosecuting counsel and investigators. In conferences with hearing officers
or boards, requests can be made that pre-hearing reports disclose the scope, extent and anticipated
content of testimony likely to be presented. While hearing officers and boards may refuse to grant such
requests, even in the absence of established board practice to the contrary, it should not be assumed that
such requests will not be fruitful. In addition, denials of requests for information essential to a fair and
impartial hearing may provide a basis for the pursuit of subsequent appeals.

Exploring Settlement Options
Except in unusual circumstances, it is rare for licensing boards to pursue disciplinary action against
pharmacies and pharmacists without substantial justification for doing so. While extenuating and
mitigating factors may exist, and disputes may exist regarding the appropriate interpretation of relevant
laws and regulations or the scope and extent of appropriate sanctions, it is rare to be called upon to
defend parties to disciplinary proceedings who are without substantial responsibility for activity the
licensing boards characterize as professional misconduct. Accordingly, in many circumstances, the
negotiation of consent orders terminating proceedings represents a preferable alternative to proceeding
with contested hearings, especially when the costs and potential collateral consequences of participating
in contested proceedings are taken into consideration.

The principal difficulties encountered in negotiating reasonable settlements to disciplinary complaints
include: dealing with overly aggressive prosecuting attorneys unwilling to agree to a reasonable
compromise; requirements that parties agree to standard terms and conditions in consent orders that
appear unreasonable; or settlements structured in a manner that may trigger more serious consequences
for pharmacies and pharmacists in the form of the termination of provider agreements or potential
criminal prosecution.

Some options to consider to increase the likelihood of a favorable consent agreement are to request an
informal conference before an individual member of the board authorized to conduct such proceedings
and make recommendations for settlement (and who is then typically recused from participation in any
subsequent contested hearing if settlement negotiations are unsuccessful); to request mediation before
a neutral party familiar with pharmacy operations; or to recommend the preparation of investigatory
reports to be used exclusively for purposes of settlement discussions prepared by independent experts.
The latter approach may be particularly useful when disputes arise regarding contested standards of
industry practice in specialized areas in which board members may not have significant experience.

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In drafting settlement agreements, care should also be taken to limit the admissibility of any admissions
 contained in settlement agreements only to proceedings to enforce the agreements and to include where
 possible within the text of agreements or in supporting documentation authorized for disclosure any
 mitigating circumstances pertinent to violations for later potential use in response to inquiries that may
 be generated by public and private health care benefit plans and certification agencies.

 Determining the Role of Hearing Examiners
 In jurisdictions in which the option to proceed before a hearing examiner or directly before a licensing
 board exists, electing the best option for a particular case may represent one of the most difficult
 challenges faced in the defense of disciplinary proceedings, especially because a decision regarding the
 best venue may depend upon the personal characteristics and experience of hearing officers and board
 members.

 Generally, proceeding before hearing officers typically represents the best option if (1) complex factual
 evidence will be presented subject to conflicting interpretations; (2) threshold legal questions exist that
 fall outside the expertise of board members to effectively resolve; (3) multiple witnesses and exhibits
 are likely to be presented; or (4) emotionally charged and adversarial confrontations with complaining
 witnesses are likely to occur. In these circumstances, the availability of a detailed written record
 and proposed report to the licensing board from which parties may take exceptions provides a better
 opportunity for effective advocacy and careful reconsideration of relevant facts and circumstances.
 Proceedings before hearing officers, however, are also likely to be much more protracted and expensive,
 a factor that may be very important to affected parties.

 In contrast, proceeding directly before licensing boards may represent the best option where (1) the
 primary issue presented involves the scope and extent of sanctions to be imposed and witnesses are
 likely to persuasively present evidence of mitigating circumstances; (2) an understanding of the practical
 problems faced in day-to-day pharmacy operations will be helpful in obtaining a favourable resolution;
 or (3) giving board members an opportunity to personally evaluate the demeanor and credibility of
 witnesses is important. In deciding to proceed directly before a licensing board, however, counsel must
 consider the potential that board members (who typically are only nominally compensated) will react
 unfavourably to the need to participate in a hearing and the possibility that their clients may not present
 sympathetic figures when presented for direct scrutiny.

 Making Effective Use of Stipulations
 Notwithstanding how thoroughly a case is prepared, witnesses are always likely to make unanticipated
 statements and admissions when presented for direct and cross-examination. While sometimes such
 unanticipated testimony can be very beneficial to the outcome of proceedings, often the opposite
 occurs. The demeanor of witnesses (especially defendants who feel they are being unjustly subject
 to disciplinary proceedings) may also detract from the effectiveness of a defense. Accordingly, it is
 usually desirable to narrow the scope of contested facts as much as possible through the effective use of
 stipulations. Narrowing the scope of contested issues may also reduce the cost of proceedings and better
 focus adjudicators on the resolution of critical factual questions without getting lost in irrelevant and
 extraneous details.

 Unfortunately, it can sometimes prove to be difficult to persuade state board counsel to agree to any
 extensive set of stipulated facts. This may occur because board counsel face crowded dockets and
 lack the time and resources to work on stipulations or due to their fears (which are often justified)

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that stipulations (often prepared by more seasoned adversaries) may prejudice their ability to obtain
favourable rulings and stiff penalties. Some alternatives to increase the likelihood that useful
stipulations will be generated are recommendations made to hearing examiners or board representatives
in pre-hearing conferences that scheduling orders be issued mandating the exchange of agreed upon and
contested findings of facts and that parties meet and confer, beginning at dates substantially in advance
of the scheduled hearing, to discuss stipulations and settlement options.

Understanding the Relevance of the Rules of Evidence
In virtually all jurisdictions, the rules of evidence do not apply in administrative hearings and hearsay
evidence is admissible. Care should be taken, however, to not lose sight of the role played by the rules
of evidence in ensuring the reliability of evidence and in using instances of non-compliance with the
usual rules of evidence to suggest that certain types of testimony should be given reduced probative
value or disregarded.

In several jurisdictions, the so-called “legal residuum” rule provides that although admissible in
administrative proceedings, hearsay evidence if properly objected to is not competent to support a
finding of fact based solely upon such evidence, and if admitted without objection may support a finding
of fact only if it is corroborated by other competent evidence in the record. Often the legal residuum
rule is articulated as a requirement for constitutional due process, especially in proceedings involving
property rights such as occur in licensing board proceedings, but in other states, such as California, New
Jersey and Florida, various permutations of the rule are embodied into state statutory law.

In jurisdictions subject to the legal residuum rule, it is obviously critical to properly object to hearsay
evidence. In other jurisdictions, however, the principles that underlie the rule should be articulated as a
basis for giving hearsay evidence less probative value than other evidence and to disregard such evidence
unless independently corroborated.

Similar issues arise with respect to other rules of evidence. For example, in some jurisdictions rules
limiting the use of judicial notice are not applicable in administrative proceedings. This represents a
particularly thorny problem in pharmacy board proceedings where board members may be tempted
to use their independent knowledge and expertise as a basis upon which to make determinations. To
reduce the possibility of the misuse of administrative notice, and to discourage boards from relying upon
evidence outside of the record, pre-hearing orders can be used to establish comparable requirements
prior to the taking of administrative notice by a hearing officer or board. For example, in the same
manner as required for the judicial notice of facts not within the record of proceedings, prior notice and
an opportunity to rebut any administrative noticed facts can be required.

Presenting Exculpatory and Mitigating Evidence
Unlike criminal trials which typically have bifurcated proceedings to determine guilt and to impose
sanctions, in most circumstances state licensing boards use the same record for the purpose of
determining whether unprofessional conduct has occurred and to determine the appropriate sanctions.
This clearly poses a challenge to counsel defending pharmacies and pharmacists because an effort to
directly present character witnesses may create a presumption, even if unstated, that the unprofessional
conduct has occurred and that parties are pleading for lenience.

Clearly the best way to avoid this dilemma is to ask a hearing officer or board to conduct bifurcated
proceedings. If such requests are rejected or are not practical in the circumstances, it may be necessary

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to find creative ways to present character testimony and make the hearing officer or board aware of
 mitigating factors without clearly acknowledging or suggesting that the evidence is being presented
 for such a purpose. This can be accomplished by background testimony regarding the long history of
 operations of a facility or the conduct of an individual without disciplinary complaints or by presenting
 evidence regarding the location or services provided by a facility suggesting that its continued operation
 is critical to the continued provision of healthcare to certain communities.

 It may also be useful in disciplinary proceedings to describe actions taken by a facility after complaints
 have occurred to avoid future complaints in the same area. If presented skilfully, such testimony rather
 than appearing to provide an admission of guilt may instead illustrate the commitment of a facility to
 establishing good business practices and suggest to a hearing officer or licensing board the type of order
 to issue in lieu (in whole or in part of civil penalties), i.e., a mandate to prepare and submit for review a
 facility compliance plan.

 Licensing Controversies
 Pharmacy board proceedings concerning the issuance of licenses, approvals and certifications unrelated
 to disciplinary matters, but instead relating to the actual physical requirements for the operation of a
 pharmacy, the granting of reciprocal licensing privileges or other regulatory matters, pose at least one
 important set of issues that may be less relevant in disciplinary proceedings, namely, the applicability
 and validity of non-regulatory “statements of policy” or “guidance documents,” or of board practices
 imposed uniformly but not reduced to written directives. Pharmacies and pharmacists often protest the
 application of such requirements and question their legal validity. State precedent has emerged in three
 primary directions with respect to administrative requirements not imposed by regulations. Recognizing
 how to handle controversies regarding such administrative requirements requires an appreciation of the
 relevant state law.

 In some jurisdictions, policies that are treated as “binding norms” which are not properly incorporated
 into published administrative rules are treated as void and unlawful and may not be properly relied upon
 as a basis for refusing to issue a license or for imposing conditions upon a license. In such jurisdictions,
 the relevant documents or policies should be identified and documented and appropriate motions
 objecting to their use filed. Upon appeal, unless the reliance upon the documents or policies constituted
 harmless error, adjudications relying on such documents or policies may generally be vacated.

 Other jurisdictions recognize the practical need for policies and guidance documents not incorporated
 into regulations, and afford these documents two substantially different degrees of recognition. In most
 jurisdictions, if an agency adopts statements of policies or guidance documents not intended to have
 the force and effect of administrative regulations, such documents may be treated as valid “statements
 of policy” or “interpretative rules,” but may not be binding upon a hearing examiner or board and are
 never binding upon a court considering an appeal. Instead, in many circumstances a hearing examiner
 or board enjoys the discretion to apply or not apply such policies or documents to the extent appropriate.
 Even where a hearing officer or board determines its actions are bound by such documents or policies,
 however, upon appeal a court may decide whether or not the application of the policy is reasonable
 and appropriate without affording the document or policy any significant degree of deference. In such
 jurisdictions, practitioners must stress the non-binding nature of the documents or policies and suggest
 reasons that the documents or policies do not provide the most reasonable and appropriate interpretation
 of statutory requirements in a particular setting.

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One final set of state practices is highly problematic. Some states treat policies not incorporated
into valid administrative regulations as mere interpretations of validly adopted rules and hold that an
agency’s interpretation of its own rules must be upheld unless clearly contrary to law, unconstitutional
or arbitrary and capricious. In such jurisdictions, the best approach is to illustrate that the challenged
policies are not in fact mere interpretations of existing rules, but instead represent new rules that have
been invalidly adopted.

Rulemaking and Policy Setting Proceedings
Rulemaking typically poses significant challenges for pharmacy boards because in most jurisdictions
boards are not provided the staff and resources necessary to develop any significant regulatory initiatives
and board members are nominally compensated appointees who lack the expertise, time and background
necessary to function as their own regulatory staff. These problems may pose particularly acute
challenges for licensing boards in jurisdictions in which tradition or practice prevents boards or their
staff members from issuing advisory opinions regarding various issues without the adoption of formal
administrative rules.

At least two alternatives are available for individuals and organizations promoting the adoption of
new regulatory standards in jurisdictions in which boards lack the capacity or willingness to initiate
rulemaking proceedings. It may be possible either to take advantage of formal or informal options for
“negotiated rulemaking” or to petition pharmacy boards to consider and adopt specific proposed rules.

In recent years many jurisdictions have adopted formal negotiated rulemaking laws. Unfortunately,
many of these laws have remained largely unutilized because of fear of their often highly detailed
prescriptive procedural requirements. Upon closer examination, however, the procedures mandated
by these laws are often less burdensome in practice than seems apparent, especially when agencies are
engaged in adopting technical rules sometimes typical in pharmacy board practice that do not involve
controversial public policy issues. Accordingly, for major regulatory initiatives of significant importance
to pharmacies and pharmacists, consideration should be given to utilizing formal negotiated rulemaking
requirements.

An alternative to formal negotiated rulemaking that may be considered in many jurisdictions is the
use of informal advisory committees to develop proposed rules for consideration by pharmacy boards.
Fortunately, most regulatory negotiation statutes provide optional, not mandatory, procedures for boards
to work cooperatively with stakeholder groups to develop proposed rules, and in most jurisdictions,
there are no formal restrictions or limitations upon the development and use of advisory committees to
develop regulatory proposals for consideration by pharmacy boards.

Finally, the option of formally proposing rules for consideration by agencies by way of petition should
also be considered. Many states authorize rulemaking petitions whereby parties may draft detailed rules
and present the rules to boards for consideration by way of petition. Typically a board will then study
the rules and make a determination about whether to publish the rules for notice and comment either as
submitted or with modifications adopted by the board. This option may be attractive because it allows
proposed rules to be quickly promulgated for notice and comment without the necessity of a licensing
board formally endorsing the recommendations. Instead, all that is required is for a board to conclude
that the topic and recommendations have sufficient merit to be promulgated for notice and comment.

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