California State Board of Pharmacy Modifies Language of Proposed Regulation Related to Inventory Reconciliation in Response to Public Comment

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By Steven Funk

At its December 2, 2021 meeting, the California State Board of Pharmacy (the Board) discussed the pending Inventory Reconciliation regulation and clarified that the proposed regulation intends to require licensees to complete a full inventory reconciliation for any drug loss, even if only a single controlled substance pill is lost. However, the Board also made an essential distinction, noting that a situation where a single pill is lost would not require the licensee to submit a reconciliation report to the Board but would still require the licensee to conduct the inventory activities described by the proposed regulation. The Board reasoned that requiring a full inventory reconciliation for any drug loss, even if only a single pill, can be key in helping licensees identify the cause of the loss and ameliorate any pattern of loss before it meets the minimum reporting threshold.

During the 45-day comment period, Valley Children’s Hospital submitted a written comment requesting clarification on the meaning of “inventory activities” in subsection (a)(3)(B) of the proposed text as it related to schedule III-V controlled substances reconciliation. In response, Board staff recommended changes to the regulatory text to further define “inventory activities.” Following these considerations, the Board voted to approve the staff-recommended modified text and initiate a 15-day comment period from December 3, 2021 to December 18, 2021.

Board staff then recommended modifications to the text of the proposed regulation in response to public comments made during the 45-day comment period. As noted in the Board’s December 2, 2021 meeting materials, Vipul Patel, Executive Director of Pharmacy Services at Cedars Sinai Medical Center in Los Angeles, submitted a written comment recommending that subsection (a)(3)(A) of the proposed text be amended to add the phrase “any significant loss reported to the Drug Enforcement Administration” to clarify that an inventory is not required for the loss of a single tablet and to match the language changes in the Board’s Reporting Drug Loss rulemaking (16 CCR § 1715.6). For the same reasons, Mark Johnston, of CVS Health, recommended in a written comment that subsection (a)(3)(A) be amended to add the term “reportable.” The Board’s Reporting Drug Loss rulemaking amended section 1715.6, Title 16 of the California Code of Regulations (CCR) to establish a minimum reporting threshold for controlled substances that correspond to what the Board deems to be a significant loss, depending on the type and amount of controlled substance lost. [see 27:1 CRLR 70–72] In response to the aforementioned public comments, the Board recommended that the regulatory text be amended to establish a minimum criteria to require an inventory reconciliation report resulting from a controlled substance loss.

At its January 27–28 meeting, the Board again discussed the pending Inventory Reconciliation regulation and considered comments from stakeholders made during the second 15-day comment period. As recorded in the Board’s meeting materials, a commenter submitted a written comment requesting clarification on the minimum criteria to initiate an inventory reconciliation report resulting from a controlled substance loss. Board staff reviewed this comment and recommended clarifying language subsection (a)(3)(A). However, the Board highlighted that there may be some misunderstanding among stakeholders about the requirements of the regulation. The Board encouraged stakeholders to read the text of the proposed regulation and note the difference where inventory reconciliation reporting is required versus inventory activities only. The Board voted to approve the staff-recommended modified text and initiate a second 15-day comment period. The public comment period ended February 12, 2022. In addition, the Board voted to release second modified text and initiate a second 15-day comment period on its proposed amendment to section 1715.65, Title 16 of the CCR, related to Inventory Reconciliation.

In September 2021, the Board had originally published notice of its intent to amend section 1715.65 to address frequent compliance questions on the requirement for pharmacies and clinics to perform inventory reconciliation activities, and to address the ongoing diversion of non-Schedule II controlled substances. As stated in the Board’s initial statement of reasons, the proposed regulation seeks to reduce the amount of controlled substances diverted from pharmacies and clinics and thereby reduce the amount of drugs being misused and abused. [see 27:1 CRLR 70–72]

At its March 16, 2022 meeting, the Board considered comments made regarding the second modified text and voted to adopt the text as modified on January 28, 2022. At this writing, the regulation is pending review.

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