/ 

- 

JIM MAlTOX 

Attorney General 

714 Jack6on. SUItO 700 

oallas, TX. 75zozm 

2lu742-8944 

4824 Alberta Ave.. Suite 160 

El Paec.. TX. 799052793 

OlY53334M 

1001 ma* swa 700 

l4oueton. TX. 77002-311t 

71- 

808 Emadw*y, Suite 312 

LubtJcck, TX. 70401447Q 

emf747-5235 

Uoo N. Tsnth. Sulle B 

McAllsn, TX. 78501-1485 

51-7 

200 MaIn Ptua, wte uw) 

San Antonlo. TX. 752052797 

512n2n101 

‘The Attorney General of Texas 

March 27. 1985 

Carlos D. Godinez. M.D. Opinion No. JM-304 

President 

Texas State Board oE Medical 

Examiner 8 

Re: Whether section 5.09(a) 

of article 4495b. V.T.C.S., 

P. 0. Box 13562, CapLtol Station 

Austin, Texas 78711 

authorizes a physician to 

collect reimbursement for 

drugs supplied to patients 

Dear Dr. Godinez: 

You ask whether a physician may be reimbursed for the coat of 

dangerous drugs or controlled substances supplied a patient under the 

authority of sectton 5.09(a) of article 4495b, V.T.C.S., of the 

Medical Practice Act. Article 5.09 reads in Its entirety: 

Sec. 5.09. (a) A person licensed to practice 

medicine under this Act is authorized to supply 

the needs of his patients with any drugs or 

remedies as are necessary to meet the patients’ 

immediate: needs; provided, howwer, this section 

doesaotpem&tthepttpaMantonperatea retaW 

pharmacy vithout first complying with the Texas 

Phermacy Act. 

cb) A licensed physician vho practices 

uidlcinc in a rural area in which there is no 

pharmacy may maintain a supply of dangerous drugs 

,ln the o:E:Mce of the physician to be dispensed in 

the course of treating the physician’s patients 

and may be reimbursed for the cost of supplying 

those dtqs without obtaining a license under the 

Texae~ Pharmacy Act (Article 4542a-1, Vernon’s 

Texas Civil Statutes). Such physicians shall 

comply with all appropriate labeling sections 

applicable to this class of drugs under the Texas 

Pharmacy Act, and oversee compliance with 

packaging and recordkeeping sections applicable to 

this elms of drugs. For the purposes of this 

subsectimn: 

(1) t’hc term ‘rural area’ means an area in 

which there is no pharmacy within a 15-mile radius 

of the physician’s office. and is within: 

p. 1379 
Dr. Carlos D. Godinez - Page :! 

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(A) a county with a total population of 5,000 

or less according to the most recent federal 

census; or 

@) a city or town, incorporated or 

unincorporated, with s population of less than 

2,500, according to the most recent federal 

census, but shall not include a city or town. 

incorporated or unincorporated, whose boundaries 

arc adjacent to ar, incorporated city or town with 

an equal or greater population. 

(2) the term 'reimbursed for cost' shall mean 

an additional cha,rSe separate from that made for 

the physician's professional services which 

include the cost af the drug product and all other 

actual costs to the physician incidental to 

providing the dispensing service but not including 

a separate fee for the act of dispensing the drug 

product itself. 

The Sixty-eighth Legislature added section 5.09(b) to the Medical 

Practice Act and an identlc.al provision to the Texas Pharmacy Act. 

Acts 1983, 68th Leg., ch. S90, 551, 2 (codified as V.T.C.S. srts. 

4542a-1, 033(c); 4495b. i5.09). The ssme enactment placed the word 

"retail" before "pharmacy" in section 5.09(a), originally enacted in 

1981 as section 5.09 of the Yledical Practice Act. - See Acts 1981. 67th 

You first ask: 

1. May a phys::cian who, under the authority of 

section 5.09(a) of the Medical Practice Act, 

suppl.ies dangerow drugs or controlled substances 

to a patient tc meet the patient's Imediate 

needs. be reimbursed for the cost of the drug 

product supplied :Lf [certain conditions are met]. 

The Medical Practice Act does not define "supply." Rowever, 

section 3.06(d), authorizing: a physician to delegate to others the 

administration or provision of dangerous drugs, defines "provision" as 

follows: 

'provision' means 'co supply one or more unit doses 

of a drug, medicf&, or dangerous drug. The drug 

or medicine shal~l be supplied in a suitable 

container thathasbeen labeled in compliance with 

the applicable dru:g laws. (Emphasis added). 

V.T.C.S. art. 4495b, 13.06:~1)(3)(4). When the patient is "supplied" 

medicine. he is given one or more doses to take with him and to use 

p. 1380 
Dr. Carlos D. Godinez - Page 3 (JM-304) 

according to the physician's instructions. See also V.T.C.S. art. 

4542a-1. 119(f); Attorney General Opinion MI-410 (1981) (under 

Pharmacy Act physician may administer medication to patients without 

being licensed as a pharmacist). 

Section 5.09(a) does not expressly permit reimbursement for the 

cost of drugs supplied under its authority. It does not pennit a 

physician to operate a reta:tl. pharmacy without first complying with 

the Texas Pharmacy Act. The Texas Pharmacy Act, article 4542a-1. 

V.T.C.S., includes In sectiorl 19 an exemption for physicians expressed 

in language similar to that in. section 5.09(a): 

(c) This Act does not apply to a practitioner 

licensed by the npproprlate state board who 

supplies his patients with dNgS in a manner 

authorized by stale or federal law and vho does 

not operate a plumnacy for the retailing of 

prescription drugs., 

Texas Pharmacy Act, Acts 15181, 67th Leg., ch. 255, 519(c), at 650 

("retailing" is incorrectly codified at V.T.C.S. art. 4542a-1. 

119(c)). Section 19(c) and section 5.09(a) are provisions In par1 

materia which should be CoriE~trued together. Calvert v. Fort Worth 

National Bank, 356 S.W.Zd 918 (Tex. 1962); State Board of Dental 

Examiners V, Fenlav. 357 S.W.Zd 185 (Tex. Civ. App. - Dallas 1962, no 

VI-it). 

The Pharmacy Act does not prevent a physician from charging a 

aeparllce ree tar adnU.niSteY~ii~~~ \r.T.ti;.S. art. 4 ~--s-l~~ 

"Admlnlster" 

means the direct application of a prescription 

drug by injection,, inhalation, ingestion, or any 

other means to the body of a patient by: 

0 a practiM&ner or an authorized agent 

under his supervIsion; or 

(W the pat:lent at the direction of a 

practitioner. 

Id. 15(2). Nor Is a physicl.an barred from dispensing or distributing 

~scriptioa drugs to his own patients. Id. 119(a),(c). The relevant 

terms are defined as follows: 7 

(16) 'Dispense' means preparing, packaging, 

compounding, or labeling for delivery a 

prescription drug or device in the course of 

nrofessional . nractice io an ultimate user or his 

agent by or pursJ;mt to the lawful order of a 

oractltioner. 

p. 1381 
Dr. Carlos D. Codinex - Page ,b (JM-304) 

(17) ‘Distribute’ means the delivery of a 

prescription dNg or device other than by 

administering or dispensing. (Emphasis added). 

Id. 55(16), (171. However. he may not 

?6&iling of prescription drugs.” 

“operate e pharmacy for the 

Id. 119(c): see also V.T.C.S. art. 

4495b. 55.09(s). If a physician se% drugs to individual patients, 

even at cost, the pharmacy, act considers him to be operating a 

pharmacy for the retailing of drugs. See Attorney General Opinion - 

MW-410 (1981). 

Attorney General Opinion MW-410 (1981) construed section 19(c) of 

the Texas Pharmacy Act to prohibit the physician from charging a 

separate fee for drugs provided to the patient for self-medication. 

The opinion states as follow: 

We believe a physlc:Lan who charges a separate fee 

for dispensing dNgS t0 a patient for 

self-medication engages in the retailing of drugs. 

When a physician retails drugs, he is engaging in 

the practice of pharmacy within the statutory 

definition. A physician may. however, administer 

drugs directly to IXLS patients, see sections 5(g), 

19(d). and we believe he maymake a separate 

charge for so d’o:Lng without engaging in the 

practice of pharmayf. 

~ectio~~~~e~e~ca~~~a~tice Act. ConstNed in 

pari materis with section 19(c) of the Pharmacy Act, prohibits a 

physician from charging a fee to cover the cost of drugs supplied to a 

patient for self-medication. unless such physician practices in “a 

rural ares” as defined In article 5.09(b). 

You also ask: 

2. If a physician may not be reimbursed for 

the cost of a drug product supplied to a patient 

under the clrcumutances described in the first 

question, are thaw any circumstances under which 

a physician may be reimbursed for the actual costs 

to the physician of a drug product supplied to a 

patient to meet the patfent’s immedfate needs, 

other than the* cfccumstances described in the new 

Section 5.09(b) oi’ the Medical Practice Act. which 

addresses the authority of rural physicians to 

dispense dangerous drugs? 

Section 5.09(b) and an identical provision codified as section 

33(c) of article 4542a-1, V.T.C.S.. authorize a physician vho 

practices in a “rural area” to dispense dangerous drugs to his 

patients and be reimbursed for the cost of supplying the drugs. 
<’ ’ 

Dr. Cerlos D. Godinex - Page 5 (JM-304) 

“Rural *reel’ is defined rer;trictlvely. This narrow exception wes 

enacted to exempt rural physicians from the prohibition against 

charging a separate fee For prescription medicine supplied to 

patients. See Bill Anslys~ili to House Bill No. 1474, prepared for 

House Committee on Public Realth, filed in Bill File to Rouse Bill No. 

1474. Legislative Reference 'LLbrary (bill which included 85.09(b) of 

article 4495b. V.T.C.S.. end 133(c) of article 4542a-1, V.T.C.S.). 

Section 5.09(b). as an exception to e general prohibition, should 

be strictly construed. liunslqer v. Boyd, 26 S.W.2d 905 (Tex. 1930). -- 

Corpus Christi v. McClaugher~r, 284 S.W.2d 927 (Tex. Civ. App. - San 

Antonio 1955. writ ref'd). Unless he complies with the various 

requirements of section 5.OS(b), a physician who is not a licensed 

pharmacist may not be reimbursed for the cost of drugs supplied to 

meet a patient's immediate needs. 

SUMMARY 

A physician who supplies dangerous drugs or 

controlled substances to a patient under authority 

of section 5.09(a). article 4495b. V.T.C.S.. may 

not be reimbursed Eor the cost of the product 

supplied. Section 15.09(b) provides sn exception 

permitting rural physicians who come vithin its 

terms to charge o fee for the cost of drugs 

supplied to patients. 

Attorney General of Texas 

TOMGREBN 

First Assistant Attorney General 

DAVID R. RICEAXDS 

Executive Assistant Attorney General 

RICX GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

p. 1383 
Dr. Carlos D. Godlnez - Page 6 (JM-304) 

APPROVED: 

OPINION COMMITTEE 

Rick Cilpin. Chairman 

Susan Garrison 

Jim Moellinger 

Jennifer Riggs 

p. 1384