c 

I 

;- 

Cctober 8, 1986 

Jerry Hodge, R.Ph. 

President 

opinion No. JM-555 

Texas State Board of Pharmacy 

211 East 7th Street, Suite 1121 

Austin, Texas 78701 

Re: Whether the State Board of 

Pharmacy may license and regulate out-of-state mail-order 

pharmecies 

Dear Dr. Hodge: 

On behalf of the Tmas State Board of Pharmacy you ask the 

following questions: 

1. Whether sections 18 and 29 of article 

4542a-1, V.T.C.:., authorize the board to license 

out-of-state plwmacies or pharmacists which 

solicit mail-ord,er sales of prescriptions from 

Texas residents. 

2. Whether requiring licensing by the board of 

out-of-state pharmacies or pharmacists, whether 

pursuant to a specific statute or based on an 

implied legislative mandate, establishes an unconstitutional burden on interstate commerce. 

3. If it ir; assumed that out-of-state pharmacies and phanmcists may dispense prescriptions 

by mail to Texm residents without being licensed 

by the board, :nhether] the pharmacies or pharmacists [must] nevertheless comply with other 

provisions of n-cticle 4542a-1, V.T.C.S. (Texas 

Pharmacy Act), article 4476-15, V.T.C.S. (Texas 

Controlled Subs,:ances Act), and article 4476-14. 

V.T.C.S. (Texas Dangerous Drugs Act), regarding 

the dispensing cf prescriptions drugs. 

As a fundamental rule. administrative agencies have only those 

powers granted by statute: and those powers necessarily implied from 

the statutory authority conferred or duties imposed. City of Sherman 

v. Public Utility Commission, 643 S.W.2d 681, 686 (Tex. 1983); see 

also State ex rel. GrinzaCounty Taxpayers Association v. Texas 

Municipal Power Agency, 51?i S.W.2d 258 (Tex. Civ. App. - Houston [lst 

Dist.] 1978, no writ). You premise your first question specifically 

p. 2463 
Dr. Jerry Hodge - Page 2 (34-555) 

4 

. 

on sections 18 and 29 of the Texas Pharmacy Act, article 4542a-1, 

V.T.C.S. You also cite sections 17 and 19 of the act in your request 

letter. 

Section 17 details c:kre board's responsibilities, in part, as 

follows: 

(a) The board is responsible for the regulation of the practice of pharmacy in this state, 

including the fo:kowing: 

(1) the :.J.censing by examination or by 

reciprocity OE applicants who are qualified to 

engage in. the practice of pharmacy and the 

licensing of pharmacies under this Act; 

(2) the renewal of licenses to engage in 

the practice of pharmacy and licenses to 

operate pharmacies; 

. . . . 

(4) the enforcement of those provisions of 

this Act relating to the conduct or competence 

of pharmacistr; practicing in this state and the 

conduct of phkacies operating in this state 

and the suspekon, revocation, fining, reprimanding, cancellation, or restriction of 

licenses to engage in the practice of pharmacy 

or to operate a pharmacy; 

. . . . 

(6) the enforcement of this Act and any 

rules adopted under this Act. 

(b) The board has the following responsibilities relating 1:~ the practice of pharmacy and to 

prescription drugs and devices used in this state 

in the diagnosis:, mitigation, and treatment or 

prevention of in:ury, illness, and disease: 

(1) reguktion of the delivery or distribution of prem:ription drugs and devices, includina the r%zht to seize, after notice and 

hearing. any prescription drugs or devices 

posing a hazard to the public health and welfare, but the board may not regulate: [certain 

manufacturing and wholesale exceptions]; 

p. 2464 
Dr. Jerry Hedge - Page 3 (JM-555) 

(2) specification of minimum standards for 

professional environment, technical equipment, 

and security in the prescription dispensing 

area; and 

(3) specification of minimum standards for 

drug storage, maintenance of prescription drug 

records, and procedures for the delivery, dispensing in a siuitable container appropriately 

labeled, or providing of prescription drugs or 

devices withir. the practice of pharmacy. 

(Emphasis added). 

Section 19 states, in part, that 

(a) A person may not dispense or distribute 

prescription dru@ unless he is a licensed pharmacist or is autt.orized by this Act to dispense or 

distribute prescription drugs. (Emphasis added). 

Section 29 provides Cat 

(a) A pharmacy shall annually register with 

the board. 

. . . . 

(d) The boa::d shall establish by rule the 

standards that each pharmacy and its employees or 

personnel involved in the practice of pharmacy 

shall meet to qualify for the licensing or relicensing as a pt.armacy in each classification. 

. . . . 

(f) The board shall have the authority to 

inspect facilities licensed under this Act for 

compliance with t:his Act. 

Section 18 adds to section 29(f) by providing for extensive administrative inspections of the physical facilities of pharmacies under 

the board's jurisdiction. 

In light of these provisions, the context of your first question 

requires consideration 0:: regulation both of "the practice of 

pharmacy" and of "pharmacies." You do not present any specific 

administrative rules which explain how the board plans to apply all of 

these provisions to out-o:i-state mail-order pharmacies. The legislature intended to grant the board statutory authority, under sections 

17 and 19, to regulate the practice of pharmacy by out-of-state 

p. 2465 
Dr. Jerry Hedge - Page 4 (:JM-555) 

pharmacists and pharmacies 'only to the extent they actually engage in 

business within the state of Texas. Although this may include annual 

registration of pharmacies under section 29(a), the legislature could 

not have intended the board to physically inspect, pursuant to 

sections 18 and 29(f), fac:il.ities located in other states. Thus, this 

statute permits the boar,d to require that persons who practice 

pharmacy in Texas be licensed; it does not allow the board to license 

pharmacies that are located outside of Texas. 

Section 17 authorize:3 the board to regulate the "practice of 

pharmacy in this state." Section 19 authorizes the board to prohibit 

persons from engaging unlawfully in the "practice of pharmacy." The 

"practice of pharmacy" is defined in section 5 of article 4542a-1 as 

follows: 

(29) 'Practice of pharmacy' means interpreting 

and evaluatina ur,escrintion or medication orders. 

dispensing and -labeling drugs or devices, seleci 

ting drugs and r&ewing drug utilization, storing 

prescription drrgs and devices and maintaining 

prescription drug records in a pharmacy, advising 

or consulting when necessary or required by law 

about therapeuti: value, content, hazard, or use 

of drugs or devices, or offering or performing the 

services and transactions necessary to operate a 

pharmacy. (Emphas;is added). 

Sections 17 and 19 also provide direct authority to regulate the 

dispensing, distributing, and delivering of prescription drugs. See 

5517(b)(1)-(3); 19(a). These terms are defined in section 5 z 

follows: 

(14) 'Deliver' or 'delivery' means the actual, 

constructive, or attempted transfer of a prescription drug or device or controlled substance from 

one person to ar,other, whether or not for a consideration. 

. . . . 

(1’3) 'Dispense' means preparing, packaging, 

compounding, or labeling for delivery a prescription drug or devtce in the course of professional 

practice to an ultimate user or his agent by or 

pursuant to the lawful order of a practitioner. 

(17) 'Distribute' means the delivery of a 

prescription dru(; or device other than by administering or dispersing. (Emphasis added). 

p. 2466 
Dr. Jerry Hedge - Page 5 (JM-555) 

Out-of-state mail-or&r pharmacists or pharmacies which fill 

prescriptions for Texas residents clearly deliver, dispense, or 

distribute those prescriptions in Texas. Consequently, the legislature granted authority in sections 17 and 19 of article 4542a-1 to 

regulate mail-order sales or transfers of prescription drugs from 

out-of-state pharmacists or pharmacies to persons within Texas with 

regard to the asvects of such practice that may directly affect users 

residing in Texas. See .sl& V.T.C.S. art.. 4476-14. §2(b); art. --- 

4476-15, §1.02(8)-(13). 

Your second question is whether such regulation would create an 

unconstitutional burden on interstate commerce. Because you do not 

present specific administrative rules detailing exactly which aspects 

of sections 17 and 19 ~11:. be applied to out-of-state pharmacies and 

pharmacists and how those ~?::ovisions will be applied, this opinion can 

provide only the general principles of law established in similar 

cases under the Commerce Ctause of the United States Constitution. 

The basic criteria for determining the validity of state statutes 

and actions which affect interstate commerce are set forth in Pike v. 

Bruce Church, Inc., 397 U.S. 137, 142 (1970). as follows: 

Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its 

effects on interstate commerce are only incidental, it wilt be upheld unless the burden 

imposed on such commerce is clearly excessive in 

relation to the putative local benefits. If a 

legitimate local purpose is found, then the 

question becomes tone of degree. And the extent of 

the burden that will be tolerated will of course 

depend on the nature of the local interest 

involved, and on whether it could be promoted as 

well with a lesser impact on interstate 

activities. (Citation omitted). 

Authorities in several jurisdictions across the country have considered the constitutionality of different statutory schemes which 

regulate out-of-state mail-order pharmacists or pharmacies with 

varying results. Some upheld the constitutionality of their statutes 

under the Commerce Clause. See, e.g., Pharmaceutical Manufacturers 

Association v. New Mexico-Board of Pharmacy, 525 P.2d 931 (N.M. Ct. 

App. 1974); Wisconsin Attorney General Opinion No. 33-83 (August 23, 

1983); See also 61 Op. Cal. Att'y Gen. 192 (No. CV 76-212, CV 77-236; 

May 2, 1978). Others have not. See, e.g., Iowa v. Rasmussen, 213 

N.W.2d 661 (Iowa 1973); Nebraska Attorney General Opinion No. 57 

(April 4, 1985); Ohio Attorney General Opinion No. 82-032 (May 4, 

1982). All of these op:Lnions agree, however, that regulation of 

prescription drugs meets the first part of the constitutional test 

p. 2467 
Dr. Jerry Hedge - Page 6 1:JM-555) 

under the Commerce Clause -- that the regulation must effect a 

legitimate local interest. 

Article 4542a-1, in E,ection 2. recognizes that the practice of 

pharmacy in this state affects the health, safety, and welfare of the 

public. The overall purpose of the act is to protect the consumers of 

prescription drugs. The State Board of Pharmacy also has regulatory 

duties with regard to cortrolling drug abuse and misuse under the 

Texas Controlled Substances Act, article 4476-15, V.T.C.S., and the 

Texas Dangerous Drugs Act, article 4476-14. V.T.C.S. The regulation 

of the delivery, distributi,on, and dispensing of prescription drugs is 

well within the traditional definition of a state's police power. See 

Head v. New Mexico Board of Examiners in Optometry 374. U.S. 424 

(1963); Pharmaceutical YinFEacturers Association v. iew Mexico Boar: 

of Pharmacy, 525 P.2d at 9?i. 

In Pike v. Bruce Churc&, Inc., 397 U.S. at 142, the Court stated 

that regulation must be evenhanded. The Texas Pharmacy Act is, on its 

face, even-handed. Under the Commerce Clause, application of the 

state statute must not discriminate aeainst nonresidents eneaeed 

in interstate commerce. fee Pike v. --- 

Bruce Church, supra; Hun;;. 

Washington Apple Advertising Commission, 432 U.S. 333 (1977). Because 

article 4542a-1 applies to both in-state and out-of-state pharmacists 

and pharmacies, and does not authorize regulations for out-of-state 

pharmacists and pharmacies which do not apply to those in Texas, it is 

not per se unconstitutiona~l. See Iowa v. Rasmussen, 213 N.W.2d at 

667; Nebraska Attorney Ger,eralTinion No. 57, at 4; Ohio Attorney 

General Opinion No. 82-032, at 5; Wisconsin Attorney General Opinion 

No. 33-83, at 4. 

Nevertheless, even if sitate regulation of mail-order pharmacists 

and pharmacies serves a legitimate public interest and is applied 

evenhandedly, under the test set forth in Pike v. Bruce Church, the 

burden imposed on interstate: commerce by regulation must not outweigh 

the benefits derived. As c,uoted above, the court in Pike v. Bruce 

Church stated that the question is one of degree, depending on the 

nature of the local interest involved and on whether the interest 

could be promoted in a less burdensome way. 397 U.S. at 142. The 

extent of the burden imposed is the analytical point on which legal 

authorities diverge. 

The court in Pharmaceutical Manufacturers Association v. New 

Mexico Board of Pharmacy characterized the regulations and the 

licensing fee imposed by tt,e New Mexico statutes as a small burden in 

relation-to the-state's ir,terest in drug control. 525 P.2d at 935. 

The regulations in question were similar to those at issue here 

insofar as they dealt with regulation of safe storage and labeling 

of drugs and with the registration or licensing of pharmacists. 

Similarly, the Wisconsin Attorney General determined that the primary 

purpose and effect of such regulation is to protect the public. 

p. 2468 
Dr. Jerry Hodge - Page 7 (JM-555) 

Because the effect on inixcstate commerce was merely incidental to 

this purpose, no undue br,rden on interstate commerce was found to 

exist. Opinion No. 33-83, at 4; see also 61 Op. Cal. Att'y Gen. 192. 

In contrast, the court in Iowa v. Rasmussen, supra, struck down 

state regulations which, l.n practical effect, prohibited Iowa pharmacists from filling prescriptions written by nonresident physicians 

who were not registered by Iowa authorities. 213 N.W.2d at 663. 

Clearly, the issue involved here differs. Moreover, the court in 

Rasmussen declined to rule on whether the local interest involved 

outweighed the burden imposed, relying instead on a preemption 

argument. The court cited Huron Portland Cement Co. v. City of 

Detroit, 362 U.S. 440 (1560), for the proposition that, under the 

Commerce Clause, state regulation must not disrupt "uniformity" in 

interstate commerce. 21:) N.W.2d at 667. The Rasmussen court 

concluded that state regulation would -prevent uniformity in administering federal registration provisions enacted to control drug 

trafficking. See also Ohic' Attorney General Opinion No. 82-032, at 6. 

The court's conclusiou with regard to preemption, however, is no 

longer persuasive. Congres:s did not intend to preempt the field of 

drug abuse control: 

No provision of t:his subchapter shall be construed 

as indicating z.n intent on the part of the 

Congress to occupy the field in which that 

provision operates, including criminal penalties, 

to the exclusion of any State law on the same 

subject matter which would otherwise be within the 

authority of the State, unless there is a positive 

conflict between that provision of this subchapter 

and that State l&f so that the two cannot consistently stand togei%.er --* (Emphasis added). 

21 U.S.C. 5903 (1982). The Texas Pharmacy Act parallels, rather than 

conflicts with the federal sitatute. See, e.g., art. 4542a-1, 605 (lo)- 

(12); 6; see also arts. 44;'t1-14, 4476-15. 

The Nebraska Attorner General stated that having to meet the 

licensing requirements of a number of states would impose a substantial burden on the pt.srmacies' ability to engage in interstate 

commerce. Opinion No. 57, pp. 4-5. The opinion stated that 

[i]n such an instance. the pharmacy involved would 

be subject to ,multiple licensing procedures, 

including duplicative registrations, records requirements, and :.abeling requirements. 

regulations were also deemed to be unnecessarily duplicative 

-. 

Id. The : 

because they operated parallel to the federal statutes. The added 

p. 2469 
Dr. Jerry Hedge - Page 8 (JM-555) 

burden of complying with a duplicative statute regarding the practice 

of pharmacy, with the "burden" lying primarily in registration and in 

additional reporting, lab~LLing, and record keeping functions, is not 

sufficient to outweigh tha state's interest in the control of potentially dangerous drugs. ::f the pharmacy has already created records, 

it should not be a tremcrtdous "burden" to provide extra copies of 

those records. 

This burden is substantially less onerous than the regulations 

which have been held unconstitutional by the Supreme Court under the 

Commerce Clause. For example, in Pike v. Bruce Church, the Supreme 

Court struck down a statute which stated a primary purpose of promoting and preserving the reputation of Arizona cantaloupe growers by 

prohibiting deceptive packaging and requiring a certain type of 

packaging prior to shipmert out of state. The parties stipulated that 

the practical effect of the statute was to compel the company in 

question to build a packir,g facility in Arizona. The Court recognized 

that burdens on conrmerce which require business operations to be 

performed in the home state that could more efficiently be performed 

elsewhere must be viewed with particular suspicion. 397 U.S. at 145; 

see also Hunt v. Washingtcn Apple Advertising Commission, 432 U.S. 333 

(1977); Dean Milk Company ;,. City of Madison, Wisconsin, 340 U.S. 349 

(1951). The Court has uph;ld a number of ordinances and statutes with 

burdens of the relatively minor magnitude involved here. See, e.g., 

Exxon Corporation v. Governor of Maryland, 437 U.S. 117 (1978); Breard 

v. Alexandria, 341 U.S. 'f?2 (1951); Hartford Accident and Indemnity 

Co. v. Illinois, 298 U.S. 155 (1936); Asbell v. Kansas, 209 U.S. 251 

(1908). 

The argument has also been advanced that if a statute is, on its 

face. for the orotectioa of local economic benefit. then such a 

statute is per se unconst,itutional as an undue burden on interstate 

commerce. Seem Iowa v. Rasmussen, 213 N.W.2d at 666-67 (citing Pike v. 

Bruce Church 397 U.S 

--- 

. at 145). As indicated, however, article 

4542a-1 ap -Fies to both in-state and out-of-state pharmacists and 

pharmacies with regard to the practice of pharmacy; it does not 

protect local pharmacists. 

The purpose of the ac't is to protect the drug-consuming public; 

thus the burden on interrtate commerce is merely incidental and is 

outweighed by Texas' interest in controlling the dispensing, distribution, and delivery of prescription drugs. Because you do not present 

any specific administrati~~e rules which exlain how the board plans to 

regulate out-of-state mail-order pharmacies and pharmacists, we can 

only state that regulation by the board of out-of-state pharmacies and 

pharmacists is not per se unconstitutional under the Commerce Clause. 

We emphasize that the law requires the least burdensome regulation 

which will effect the state’s objectives. The numerous cases cited in 

this opinion should provide guidance as to what sorts of regulation 

have been held to be overly burdensome. 

p. 2470 
Dr. Jerry Hedge - Page 9 IJM-555) 

In light of this rerponse to your first two questions, this 

opinion does not address your third question. 

SUMMARY 

The Texas Stat,e Board of Pharmacy may regulate 

out-of-state mail-order pharmacists only to the 

extent that they .sctually engage in the practice 

of pharmacy or dispense, deliver, or distribute 

prescription drugs within the state of Texas. 

Such regulation is not Per se unconstitutional 

under the Commerce Clause of the United States 

Constitution. 

JIM MATTOX 

Attorney General of Texas 

JACK HIGHTOWER 

First Assistant Attorney Gen~eral 

MARY KELLER 

Executive Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Comittee 

Prepared by Jennifer Riggs 

Assistant Attorney General 

p. 2471