1. public goods
2. externalities
3. natural monopolies
4. information asymmetry

public goods

+ examples

necessary and beneficial commodities that private entities will not supply because there is no incentive.

ex: orphan drugs & vaccines

A public good. drugs that are sufficiently safe and effective to be marketed, but the number of patients who need them is so small that it is not commercially feasible for a manufacturer to market them.

the government must step in to ensure their availability for those who need them

externality

+ example

a type of market failure that exists when the production or consumption of a good affects someone who does not fully consent to the effect, and when the costs of a good are not fully incorporated into the price a consumer pays for it.

ex: overuse of antibiotics

example of an externality.

person who overuses the antibiotic to treat a cold will not consider the cost to other people in terms of the increased resistance to the antibiotic within the general population.

governments therefore regulate use of antibiotics by imposing a prescription requirement to ensure that unnecessary use by one person does not impose an indirect cost on other people

occurs when the fixed costs of providing a good are high relative to the variable costs, so the average cost declines over time that the good is provided.

this is why there is a period of exclusivity after a company develops a new drug before a generic drug can be formed

government regulation that ensures there is an incentive to develop new drugs by providing an exclusive right to market them before generics of the new drug can be developed.

this is regulation of natural monopolies

market failure when the consumer is uninformed about the true value of a good.

ex: value of a drug can only be evaluated after purchase and use. information about the benefits and detriments of medications does not flow freely within the lay public.

government regulation requires provision of information and input by educated professionals into decisions about drug use.

very minor or trifling

context: enforcing law in the face of ________ violations counterproductively decreases respect for the law

pharmacist had not kept accurate dispensing records. charged with "unprofessional conduct" court acknowledged the deficiencies  of the pharmacist's recordkeeping. court could not understand why accurate recordkeeping should be a test of a person's professional character. ruling in favor of the pharmacist.

point: does not mean that sloppy recordkeeping is acceptable, only that it should not be punished oppressively.

"no pharmacy can operate without occasional, very minor technical legal violations, If they have no real impact on the quality of drug therapy"

describes the US government.

1. legislative branch
2. executive branch
3. judicail branch

each branch serves as a check to the power of the others. no one branch can dominate.

may be considered a 4th branch of government

all three branches make the laws together in accordance with ___________

supreme law of the united states.

all federal or state statutes/ reglations must be in accordance with _______.

the first 10 amendments to the constitution added in 1791

in addition to the _______________, there have been 15 amendments.

law made by legislatures

1. federal statutes
2. state constitutions
3. state legislation
4. ordinances

• composed of a senate and house of repressentatives
• contains all legislative powers of the federal government
• enacts laws that apply nation wide

created by a legislature to implement desired changes in policies or to administer a body of substantive law when the legislature itself cannot perform these functions.

__________ have a greater level of expertise than congress or state legislature does on their focus.

legislature created state boards of pharmacy to administer and enforce state pharmacy practice acts.

• CMS: center for medicare and medicaid services
• FDA
• FTC: federal trade commission
• DEA: drug enforcement administration

the legislative function of Administrative Agencies.

• to promote/ make regulations widely known
• interpret and define statutes
• provide necessary details

a process in which most administrative agencies promulgate regulation

ensures that constituents whose interests are affected by the actions of the agency recieve notice of any proposed reulation.

constiuents then have opportunity to comment on the proposed regulation. the agency considers all coments, may incorporate them into regulation before final promulgation.

• conducts hearings
• review agency decisions (exhaustion of remedies)

annually revised compilationof final regulations divided and indexed by a subject matter.

50 titles, each divided further into chapters, subchapters, parts, subparts, and sections.

"To abide by decided cases"

the essence of the common law system: recording of judicial opinoins and the reliance of courts on those previence opinions

• applies to lower courts where precedent has been established
• not inflexible.
  

the person introducing a bill

(a member of congress ineither the house or senate)

prevents manufacture, sale, and transportation of adulterated, misbranded, poisonous, or harmful foods, drugs, medicines, and liquors. 

Problems:

-most concerned with PURITY, not safety

-did not prohibit false therapeutic claims (may have protected them)

-did little to inform patients because there were no label requirements to include ingredients, directions, or warnings

because of these shortcomings this act was replaced in 1938 by the FDC act

gives the federal government power to regulate drug distribution

gave the federal government a backdoor approach to regulating the profession of pharmacy (indirectly)

required the individual state to establish expanded standards of practice or risk losing federal funding of their programs.

Food Drug and Cosmetic Act of 1938

abbreviated as the FDC act

served as a replacement to the pure food and drug act of 1906. replacement was motivated by a therapeutic disaster: sulfa drug in untested solvent led to 100+ deaths.

this law required labeling with directions, premarket approval of all new drugs ( so manufacturer must prove drug is safe before it is sold)

Offenses of this act are classified either as misbranding or adulteration. violations can occur by manufacturers or pharmacists.definition of misbranding and adulteration were extended.

 drugs before 1938 were exempted from safety requirements

• when drug/devise consists in whole or part of any filthy, putrid, or decomposed substance
• if drug has been prepared, packed, or held under unsanitary conditions where it may have become contaminated

Controlled Substance Act 1970

AKA Comprehensive Drug Abuse Prevention and Control Act

legal foundation of the government's fight against drug abuse

-requires registration, specific record keeping, inventory, and rules regarding dispensing of controlled substances.

-penalties for violation of this act are more severe than violation of FDC act

-controlled drugs are placed in one of 5 categories

-pharmacy posession of schedule 1 drug violates CSA even if the drug was formerly schedule 2

-

high potential for abuse , but have a currently accepted medical use

• prescriptions dispensed for these drugs must be written and signed by practitioner (exception-emergency prescriptions)

• complete, accurate, and current records for each controlled substance purchased, recieved, distributed, dispensed, or disposed of.
• records maintained for 2 years
• records of all drugs must be separate from all other records
• records must be readily retrievable

• required to take inventory of controlled substances every 2 years
• inventory record must be maintained at registered rotation
• inventory record readily retrievable for 2 years
• inventory record copied and inspected by the DEA
• inventory record of Schedule II substances separate from those of other controlled substances
• an actual physical count must be made of schedule II drugs
• estimate count may be made for the other controlled drugs unless the container holds more than 1000 dosage units and has been opened.

• schedule III and IV drugs may be refilled if authorized on the prescription.
• may be refilled up to 5 times within 6 months after date of issue
• no refills on schedule II drugs
• no restrictions on schedule V drug

• each partial fill is recorded in the same manner as a refill
• the total quantity dispensed in all partial fills does not exceed total quantity prescribed
• no dispensing after 6 months of the date when the prescription was issued

• faxed prescriptions is permitted for schedule III,IV, and V
• faxed prescription accepted for schedule II in limited situations:  if pt is undergoing home infusion/iv pain therapy, if patient is in long term care facility, if patient is in hospice care

DEA allows transfer of original prescription information for schedule III, IV, and V drugs for refill dispensing between pharmacies on a ONE TIME BASIS.

exception: when pharmacies share a real time online database.

Purpose was to give the consumer product safety commission (CPSC) authority to require "special packaging" of household products and drugs to protect children.

• manufacturers required to perform tests that ensure children under 5 yrs cannot open package. Adults however must be able to open package.
  
• failure to comply with packaging requirements is considered a misbranding violation under the FDC act
  

• only practitioners can have samples
• written requests are required for all samples. copies must be retained in pharmacy
• samples are stored separately as well as records of receipts and dispensing
• dispensed in manufacturers oritinal packaging
• resale of samples is prohibited
  

Omnibus Budget Reconciliation Act of 1990

(OBRA-90)

placed expectations on pharmacist in how to interact with the patient.

primary goal of this act: to save federal government money by improving therapeutic outcomes

imposed pharmacist with counseling obligations, prospective drug utilization review (proDUR) requirements, and record-keeping mandates for patients on medicaid.

• intended to detect potential drug therapy problems
• requires state medicaid provider pharmacists to review medicaid recipients entire drug profile before filling their prescriptions. 
• pharmacist must screen for:
• therapeutic duplication
• Drug-disease contraindications
• Drug-drug interactions
• incorrect drug dosage
• incorrect duration of treatment
• drug-allergy interactions
• clinical abuse/misuse of meds

Health Insurance Portability and Accountability Act of 1996

(HIPAA)

this act is a long ass comprehensive federal regulation , most significant piece of legislation to affect pharmacy practice since OBRA.

• improve continuity of health insurance
• minimize waste, fraud, abuse
• promote medical savings account
• improve access to LTC services and coverate
• implement administrative simplification
• implement privacy standards

5 key provisions upon pharmacists

1. each pharmacy must take reasonable steps to limit use of PHI
2. patients must be informed of privacy practices of the pharmacy , pharmacy must distribute a notice
3. pharmacies must select a compliance officer who manages and ensures compliance with HIPAA
4. all employees must recieve training on regulations
5. PHI disclosure is allowed for a business associate but he gotta sign a contract to keep the info on the DL

came into effect 2 years after privacy provisions.

designed to protect confidentiality of PHI that is threatened by possibility of unauthorized access  and interception during electronic transmissions.

security standards define administrative, physical, and technical safeguards that the pharmacist must consider in order to protect confidentiality, integrity, and availability of PHI

voluntary. stapled to prescription bag when filling a prescription for the first time. It is written by the pharmacy or an outside company, and it is NOT reviewed and approved by the FDA.

It offers BROADER information than the medication guide, including:

• how to take drug
• how to store drug
• how to monitor improvement
• precautions and warnings
• symptoms of serious/frequent adverse events and what to do if you expirience one
  

written by the drug company, reviewed and approved by the FDA.

Pharmacists are required by the FDA to give this to patients for certain new and refilled prescriptions of medications that the FDA decided has serious and significant public health concerns.

it is part of labeling. regulations require manufacturers must produce them and alert pharmacists of their existance.

written by the drug company and reviewed and approved by the FDA.

It is only required to be distributed with oral contraceptives, and medications with estrogen, as well as some other medicines decided by the FDA or drug company, like those that are unit-of-use packages.

pre-1938 (before passage of FDC act) drugs would not be considered a new drug if it was already generally recognized as safe and effective, and has been used to a material extent for amaterial period of time.

these drugs were exempt from requirement of having an approved new drug application

made rehab programs for drug abusers

under the FDCA 1938, FDA had no authority to review devices for safety. agency resorted to classifying devises as drugs. public safety concerns prompted this amendment that:

• classified devices according to function
• premarket approval
• established performance standards
• conform to GMP regulations
• record and report requirements

Waxman-Hatch Amendment 1984

AKA (PTRA-84)

patent term restoration act

• formalized approval process for generics
• generic drug sponsors only needed to submit bioavailability and bioequivalence information (rate and extent of absorption)
  
•  patent term extention/ period of exclusivity

the FDA had lots of drugs to review, but congres wouldnt increase budget. the government wanted private industry to cover part of the costs instead of the taxpayers. therefore, congress passed this actwhich requires manufacturers to pay FDA fees for application. 

• Sunset Law: reauthorized every 5 years

• manufacturer is responsible for ensuring dietary supplement is safe before marketing
• FDA is responsible for taking action against unsafe dietary supplement products AFTER it reaches market
• manufacturers do not need to reigster with FDA or get their approval 
• manufacturers must make sure label is truthful and not misleading

safety and effectiveness of pediatric drugs

no pediatric testing

two tiered approach: earn an extra 6 month term to product patent if manufacture wishes to perform pediatric testing. if not it allots funds set aside to enable the FDA to contract for the testing

reformed regulation of food, medical products, and cosmetics

• has to do with compounding
• RISK BASED regulation of medical devices
• Food safety and labeling
• standards for medical products: obligation for manufacturers
• eliminates requirement of FDA's premarket approval for packaging
• simplifies regulatory obligations of manufacturers without lowering standards
• makes possible to provide investigational drugs to patients with life threatening illness: expedited fast track approval of those drugs

• gives FDA authority to collect user fees from industry to fund reviews of innovator drugs, medical devices, generic drugs, and biosimilar biologics.
• reauthorizes 2 programs that encourage pediatric development (PDUFA and MDUFA)
• renews and strengthens 3 essential laws to improve the safety and effectiveness of pediatric drugs, biological products, and medical devices used in children

1. BPCA: best pharmaceuticals for children
2. PREA: pediatric research equity act
3. pediatric medical device safety and improvement act

•  a drug that is not generally recognized among experts as safe and effective for use under the conditions prescribed, recommended, or suggested in labeling
• OR
• A drug that has been determined safe and effective, but has not been used to a material extent or for a material time

• new animal drugs or animal feed
• a drug that prior to enactment of this act was subject to the Food and Drugs act of 1906, and if that time its labeling contained the same representations concenring the conditions of use.

FDCA definition of "new drug"

section 201p

drug that is NOT GRAS or GRAE

(generally recognized as safe/effective)

• if it contains a new substance
• if there is a new combination of approved drugs
• if ingredient is changed in proportion
  
• if there is a new intended use for drug
• dosage, duration, or method of administration is changed

what is phase 4 of NDA process

classifies divices into 3 classes.

I: authorized under like 7 sections and are sufficient to provide reasonable assurance of safety and effectiveness

II: unable to be classivied as I. sufficient info to establish special controls

III: doesnt fall into I or II. needs premarket approval bc of risks 

Class I of Medical Devices

+examples

Authorized under several sections. Sufficient to provide reasonable assurance of the safety and efficacy of the device

ex: needles, gloves, stethoscopes, scissors, toothbrushes

suficient information to establish special controls

ex: insulin syringes, infusion pumps, thermometers, electric heating pads, diagnostic reagents, tampons

insufficient information exists to determine safe and effectiveness, and to determine that there are special controls

needs premarket approval bc of risks

ex: pacemakers, soft contact lenses, replacement of heart valves

contains name of drug, but does not include indications or dosage recommendations for use. limited information.

Exempt from labeling

applies to prescription drugs.

includes drug's indications, side effects, dosages, route, method, frequency, duration, contraindications, warnings and precautions.

Applies to all OTC drugs

information on label in lay language telling consumer :

• quantity/dosage
• frequency of admin
• duration of admin
• route/method of admin
• directions for preparation

ADU is not enough information to ensure patients use certain drugs safely, those drugs are prescription drugs and use AIU

pre 1962 drugs had to submit reports of bioequivalency, bioavailablity , and manufacturing methods and controls

this requirement was established from the DESI program

• efficacy required of all 1938-62 drugs on the market
• Are generics "new drugs"?
• required ANDA for all pre-1962 drugs
• led to paper NDAs and PTRA 1984
• formation of NAS-NRC panels to classify drug into 1 of 6 categories

carried over from DESI. required efficacy and safety for all otc products.

• evaluated based on therapeutic categories
• classification based on rule making
• Advisory review panels classify drugs and make recommendations to FDA regarding safety/efficacy
• monographs identifying each ingredient are published. 3 categories (GRASE, not GRASE, insufficient data)
• otc products that conform to published monograph may be marketed without FDA aproval

drug proxucts compounded on a customized basis for individual patient entitled to exemptions from three key provisions of the act

1. adulteration
2. misbranding
3. new drug provision (no need to fill out NDA)

FDA Guidence: 9 factors

(compounding)

1. can't compound in anticipation of recieving prescriptions
2. can't compound drugs withdrawn from market for safety reasons
3. can't use drugs from bulk active ingredients not approved by FDA without IND app
4. must first obtain written assurance from supplier of drug substance that each lot was made in fda registered facility
5. drug components must  meet official compendia requirements
6. no using commercial scale manufacturing or testing equipment
7. no compounding for third parties to resell, and no wholesale
8. Cannot compound drugs identical to readily availalbe fda approved drugs, thas just stoopid
9. must operate in conformance with state law

• FDA asked all drug manufacturers to stop producing/marketing IV form of this drug
• compound pharmacists must take special care when preparing this
• never been approved as safe/effective  for back pain
• serious risks: narrow therapeutic index and serious toxicities
• only tablet formations of this medication approved by FDA for treating gout only

when there is reasonable probability that the product will cause serious adverse health consequences or death

ex: Vioxx, Rezulin, Baychol, Lotronex, Propulsid

when the product may cause temporary or medically reversible adverse health consequences. probability of severe consequence is remote.

1. health claim: link between food substance and a disease or health related condition
2. structure/function claim: intended benefits of using product
3. nutrient content claim: amount of a nutrient or dietary substance in a product

• descriptive name of product
• must state it is a "supplement"
• name and place of business of the manufacturer, packer, distributor
• complete list of ingredients
• net contents of product
• supplement facts panel : identifies each dietary ingredient contained in the product

describes the intended benefits of using the product

does not require FDA authorization.

claims based on review and interpretation of scientific literature

• must be ture

provides investigational drugs outside controlled clinical trials to treat patient with life threatening diseases when comparable or satisfactory alternate therapy is not available 

this is made possible by FDAMA 1997

a health plan, healthcare clearing house, or health care provider  who transmits any health care info in electronic form in connection with transaction covered by regulations

these peeps must comply with hipaa privacy regulations

HIPAA requires every pharmacy to appoint one, who is responsible for developing and regularly updating privacy policies and procedures.

responsible for drafting and implementing policies and procedure,s keeping a file, collaboration with others to ensure implementation

may be role of pharmacy manager in a small practice setting

Prevents access to patient-specific information by an unauthroized individual at another location.

placed around the data of a consumer who refused to have information entered into shared database.

• unprofessional conduct to reveal personally identifiable facts or info obtained in a professional capacity without prior concent

Third party request for Audits

• patient must sign a permission form
• copy given to third party marked as "for informational purpose only"
• third party only entitled to prescriptions paid for by the company
• copies of controlled substance prescriptions can only be given to licensed practitioner

• investigator from NYS office of professional discipline
• NYS bureau of controlled subsances
• DEA

warrant or subpoena required for request made by those law dudes or po po that are not in this list

• "true statement" -side effects, contraindications, effectiveness
• "fair balance" - between info regarding side effects and contraindications and efectiveness

• call attention to name of drug product
• do not include indications or dosage recommendations for use
• contain proprietary (patent) name of drug and established name of each active ingredient
• may contain additional  limited info such as: name of company, price, dosage form

formed to classify drug into one of 6 categories

(DESI)

1. effective
2. prob effective (needs additional evidence)
3. possible effective (little evidence)
4. ineffective (no acceptable evidence)
5. effective but better, safer, or more conveniently administered drugs are available
6. ineffective as a fixed combination

for post 1962 drugs

compromise between ANDA and NDA

published scientific data on safety and efficacy

paved way for Drug Price Competition and Patent Term Restoration Act (PTRA)

• excipients
• pk data
• how drug is supplied
• delete portions of labeling protected by patent

pharmacist may dispense brand name product at regular price

• pharmacist must record date, hour, nature of emergency on back of prescription.
• copy of rx must be kept

NYS Medicaid Substitution Law

nov 17 2002

• all new rx for brand drugs where an A rated generic equivalent is available will be subject to PRIOR AUTHROIZATION.
• another PA is required when rx expires

Prior Authorization

• coumadin
• gengraf
• sandimmune
• clozaril
• lanoxin
• tegretol
• dilantin
• neoral
• zarontin