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                               ‘The Attorney       General of Texas

JIM MAlTOX                                    March 27. 1985
AttorneyGeneral


                               Carlos D. Godinez. M.D.                  Opinion No. JM-304
                               President
                               Texas State Board oE Medical             Re:  Whether section 5.09(a)
                                  Examiner8                             of article 4495b. V.T.C.S.,
                               P. 0. Box 13562, CapLtol Station         authorizes a physician to
                               Austin, Texas   78711                    collect reimbursement for
                                                                        drugs supplied to patients
714 Jack6on. SUItO 700
oallas, TX. 75zozm             Dear Dr. Godinez:
2lu742-8944

                                    You ask whether a physician may be reimbursed for the coat of
4824 Alberta Ave.. Suite 160   dangerous drugs or controlled substances supplied a patient under the
El Paec..TX. 799052793         authority of sectton 5.09(a) of article 4495b, V.T.C.S., of the
OlY53334M                      Medical Practice Act.  Article 5.09 reads in Its entirety:

1001 ma*    swa 700                         Sec. 5.09. (a) A person licensed to practice
l4oueton. TX. 77002-311t                 medicine under this Act is authorized to supply
71-                                      the needs of his patients with any drugs or
                                         remedies as are necessary to meet the patients’
                                         immediate: needs; provided, howwer, this section
           Suite 312
808 Emadw*y,
 LubtJcck,
       TX.70401447Q                      doesaotpem&tthepttpaMantonperatea         retaW
 emf747-5235                             pharmacy vithout first complying with the Texas
                                         Phermacy Act.

 Uoo N. Tsnth. Sulle B                                            physician  vho   practices
                                             cb) A    licensed
 McAllsn, TX. 78501-1485
 51-7
                                         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
 200 MaIn Ptua, wte uw)                  the course of treating the physician’s patients
 San Antonlo. TX. 752052797              and may be reimbursed for the cost of supplying
 512n2n101
                                         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 :!




                 (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 YledicalPractice Act. -See Acts 1981. 67th
-

         You first ask:

                 1. May a phys::cianwho, under the authority of
              section 5.09(a) of the Medical Practice Act,
              suppl.iesdangerow 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 'cosupply 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:glaws. (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



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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 sectiorl19 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~truedtogether. 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
aeparllceree 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.anbarred 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 “operate e pharmacy for the
?6&iling of prescription drugs.” 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:Lanwho 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 IXLSpatients, see sections 5(g),
          19(d). and we believe he maymake       a separate
          charge for so d’o:Lngwithout 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~ilito 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




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