               IN THE SUPREME COURT OF IOWA
                            No. 36 / 06–1747

                           Filed June 27, 2008


GARVIS G. HOUCK,

      Appellant,

vs.

IOWA BOARD OF PHARMACY EXAMINERS,

      Appellee.



      Appeal from the Iowa District Court for Cerro Gordo County,

Bryan H. McKinley, Judge.



      Pharmacist appeals from the district court’s order affirming a

decision of the Iowa Board of Pharmacy Examiners. AFFIRMED.



      Michael M. Sellers of Sellers Law Office, West Des Moines, for

appellant.



      Thomas J. Miller, Attorney General, and Scott M. Galenbeck,

Assistant Attorney General, for appellee.
                                          2

HECHT, Justice.

       A pharmacist compounded and sold a product to a customer

without a prescription.          The customer filed a complaint with the

administrative agency that regulates the conduct of pharmacists, and a

sanction was imposed against the pharmacist. In this appeal from the

district court’s ruling affirming the agency’s action, we must decide

whether the agency has authority to designate the compounded product
as a drug that may be dispensed by a pharmacist only if it has been

prescribed by a practitioner. We conclude the agency acted within its

broad authority, and therefore affirm the district court’s ruling.

       I.     Factual and Procedural Background.

       Garvis Houck is a licensed Iowa pharmacist and the owner-

operator of Houck Drug, a licensed Iowa pharmacy in Clear Lake.                     In

2002 Shirley Meyer consulted Houck about nasal irritation.                       After

offering to supply a product to ease Meyer’s symptoms, Houck

compounded1 a nasal spray containing a mixture of: 2-deoxy-d-glucose

(an antiviral); dyclonine (an anesthetic); miconazole (an antifungal);

methylcellulose (a suspending agent); sodium chloride; and distilled

water. Each of these substances was, by itself, a nonprescription drug.
Houck sold the compounded product to Meyer in a bottle that was not

labeled with a prescription number, a prescriber’s name, or a

pharmacist’s initial on the label.            Meyer used the nose drops once,

experienced increased nasal irritation, and filed a complaint with the

Iowa Board of Pharmacy Examiners (“board”).




       1The Iowa Administrative Code defines “compounding” as “preparing, mixing,
assembling, packaging, and labeling a drug or device for an identified patient . . . .”
Iowa Admin. Code r. 657—20.2.
                                             3

       The board assigned an investigator, Jacky Devine, to investigate

Meyer’s complaint.2 Houck admitted he compounded the nasal spray for
Meyer without a prescription based on his experience in compounding

some of the same substances for prescribers in the area.                               While

conducting the investigation of the Meyer complaint, Devine found

several violations of pharmacy regulations that had been noted in a prior

inspection. Houck was unable to produce for Devine forms required to

record transactions involving narcotics,3 a required log for permanent

and nonpermanent pharmacist employees, compounding production

records bearing the initials of the compounding pharmacist, and a

logbook containing the initials of pharmacists who provided customers

certain cough syrups containing codeine. Houck had been warned about

all of these record-keeping deficits in 2000.

       The board filed two charges against Houck based on the

investigation of the Meyer transaction and the 2002 inspection:

(1) intentional or repeated violation of the board’s rules regarding

operation of a pharmacy and maintenance of controlled substance

records;    and      (2)   unlawful     manufacturing        and    dispensing         of   a

compounded drug without a prescriber’s authorization.                       Following a

hearing, the board issued a written decision finding Houck committed

the alleged violations and placed Houck and Houck Drug on probation

for three years with several conditions. The board specifically ordered




       2Devine  had investigated for the board a similar complaint against Houck in
October of 2000. That complaint also arose as a consequence of Houck’s compounding
of “over-the-counter” substances without a prescription. Devine found Houck’s records
to be out of compliance in several particulars with the board’s regulations at that time,
and warned Houck against compounding and selling substances without a prescription.

       3Houck    later provided Devine with most, but not all, of the missing forms.
                                      4

Houck to refrain from compounding of any kind without authorization

from a prescriber.

      Houck sought judicial review in the district court. He contended

the regulations prohibiting pharmacists from compounding, without a

prescription, substances separately available without a prescription are

unconstitutional.      Houck also asserted the board lacked authority to

issue the regulations, and the board’s disciplinary action was not
supported by substantial evidence.        The district court denied Houck’s

petition.

      II.   Scope of Review.

      On judicial review of final agency action, we review for errors at

law. Hough v. Iowa Dep’t of Pers., 666 N.W.2d 168, 170 (Iowa 2003). In

determining the appropriate scope of review of an agency’s interpretation

of a statute, the crucial question for the reviewing court is whether the

interpretation of the statute has clearly been vested by a provision of law

in the agency’s discretion.     See Iowa Code § 17A.19(10)(c), (l).   If the

agency has been clearly vested with interpretive authority, we generally

defer to the agency’s interpretation, and may grant relief only if the

agency’s interpretation is “irrational, illogical, or wholly unjustifiable.”
Id. § 17A.19(10)(l).     If the agency has not been clearly vested with

discretion to interpret the statute, “we are free to substitute our

judgment de novo for the agency’s interpretation and determine if the

interpretation is erroneous.”     Auen v. Alcoholic Beverages Div., 679

N.W.2d 586, 589–90 (Iowa 2004) (citing Iowa Code § 17A.19(10)(c)).

      The legislature has delegated broad authority to the Board of

Pharmacy Examiners for the regulation of the practice of pharmacy in
                                           5

Iowa.    Iowa Code section 147.76 (2007)4 confers upon the board the
authority to “adopt all necessary and proper rules to implement and

interpret [chapter 155A].” See also Iowa Code § 155A.3(3) (stating the

term “board” in chapter 155A refers to the board of pharmacy

examiners). We have previously held similar language in other statutes

constituted a clear vesting in the agency of the authority to interpret a

statute.       Thoms v. Iowa Pub. Employees’ Ret. Sys., 715 N.W.2d 7, 11

(Iowa 2006) (finding a clear vesting of interpretive authority where a

statute directed the agency to “adopt . . . rules . . . and take other action

it deems necessary for the administration of the retirement system”);

Auen, 679 N.W.2d at 590 (holding grant of authority to an agency to

adopt rules “necessary to carry out this chapter” clearly vested in the

agency authority to interpret a statute); City of Marion v. Iowa Dep't of

Revenue & Fin., 643 N.W.2d 205, 207 (Iowa 2002) (holding statute

providing “[t]he director shall have the power and authority to prescribe

all rules not inconsistent with the provisions of this chapter, necessary

and advisable for its detailed administration and to effectuate its

purposes,” vested authority in the department of revenue and finance to

interpret section 422.45(20)). Section 147.76 clearly vests the board of

pharmacy examiners with authority to interpret chapter 155A. We will

therefore overturn the board’s interpretation of that chapter only if it is

“irrational, illogical, or wholly unjustifiable.” Iowa Code § 17A.19(10)(l).




        4The  events giving rise to this case occurred in 2002. Accordingly, the statutes
controlling our disposition were codified in the 2001 Iowa Code. Those statutes were
renumbered and relocated in the code without substantive change after 2001. The
parties have uniformly cited those statutes as they appear in the 2007 Code, and we
will do so as well.
                                      6

      We review an agency’s factual findings for substantial evidence

based on the record viewed as a whole. Id. § 17A.19(10)(f). Substantial

evidence is
      the quantity and quality of evidence that would be deemed
      sufficient by a neutral, detached, and reasonable person, to
      establish the fact at issue when the consequences resulting
      from the establishment of that fact are understood to be
      serious and of great importance.

Id. § 17A.19(10)(f)(1).

      We review constitutional claims de novo. Wright v. Iowa Dep’t of

Corr., 747 N.W.2d 213, 216 (Iowa 2008).

      III.    Discussion.

      A.      Board’s     Authority   to   Regulate     Compounding      of

Nonprescription Drugs.

      1.      Board’s authority to define “prescription drugs.” The primary

controversy in this case centers on the board’s interpretation of Iowa

Code section 155A.3(35). This statute defines a “prescription drug” as

any of the following:

      a.      A substance for which federal or state law requires a
              prescription before it may be legally dispensed to the
              public.

      b.      A drug or device that under federal law is required,
              prior to being dispensed or delivered, to be labeled
              with one of the following statements:

              (1)   Caution: Federal law      prohibits    dispensing
                    without a prescription.

              (2)   Caution: Federal law restricts this drug to use
                    by or on the order of a licensed veterinarian.

              (3)   Caution: Federal law restricts this device to sale
                    by, or on the order of, a physician.

              (4)   Rx only.

      c.      A drug or device that is required by any applicable
              federal or state law or regulation to be dispensed on
                                            7
               prescription only, or is restricted to use by a
               practitioner only.

Iowa Code § 155A.3(35) (emphasis added).              The board has interpreted

subsection (c) as a positive grant of authority by the legislature to the

board to enact regulations requiring that certain drugs be dispensed on

prescription only.         Relying on such authority, the board enacted

rule 20.2, a rule which, in relevant part, prohibits a pharmacist from

dispensing      compounds        consisting     of   exclusively   nonprescription

components without a prescription from a practitioner.5               Iowa Admin.

Code r. 657—20.2.          Rule 20.2 thus brings a compound made from

exclusively nonprescription components within the definition of a

“prescription drug” in section 155A.3(35)(c).            Houck contends section

155A.3(35)(c) does not vest the board with the authority to designate as a

“prescription drug” a compounded substance consisting of a combination

of nonprescription substances.

      After carefully reviewing chapter 155A in light of the board’s

authority to implement and interpret that chapter, we cannot say the

board’s interpretation of section 155A.3(35)(c) as a positive grant of

authority to the board to designate all compounded substances as

“prescription drugs” is irrational, illogical, or wholly unjustifiable. The

plain language of section 155A.3(35)(c) clearly evidences legislative intent

to identify, at least in part through state administrative rule, those

substances which may be dispensed by pharmacists only if prescribed by


      5The   Iowa Code defines a “practitioner” as

      a physician, dentist, podiatric physician, veterinarian, or other person
      licensed or registered to distribute or dispense a prescription drug or
      device in the course of professional practice in this state or a person
      licensed by another state in a health field in which, under Iowa law,
      licensees in this state may legally prescribe drugs.

Iowa Code § 155A.3(33).
                                     8

a practitioner. As we have already noted, the board has been vested with

broad authority to adopt rules to “implement and interpret” chapter

155A.    Iowa Code § 147.76.      The board is the agency charged with

administering Iowa Code chapter 124 (“Controlled Substances”) and Iowa

Code chapter 126 (“Iowa Drug, Device, and Cosmetic Act”).                Id.

§§ 124.101(3), .201, .301; 126.2(3), .17. The board asserts, and Houck

does not dispute, that no other state administrative agency is assigned
regulatory power over controlled substances or prescription drugs. We

conclude the board’s interpretation of section 155A.3(35)(c) as a statutory

authorization to identify prescription drugs by administrative rule is not

irrational, illogical, or wholly unjustifiable. It is an interpretation that

gives reasonable and logical meaning to the words “or regulation” in the

statute. See T & K Roofing Co. v. Iowa Dep’t of Educ., 593 N.W.2d 159,

162 (Iowa 1999) (noting interpretations that render a portion of a statute

redundant or irrelevant should be avoided).

        Houck contends the general assembly enumerated in chapter 124

the list of drugs which may be regulated as “prescription drugs” under

chapter 155A.       According to Houck, the board’s only authority to

influence what is a “prescription drug” is its role in recommending to the
general assembly the appropriate classification for controlled substances

in chapter 124. Iowa Code § 124.201. Chapters 124 and 155A, however,

do not narrowly limit the board’s authority to regulate prescription drugs

in the manner suggested by Houck.

        As averred by Houck, chapter 124 lists five categories, or

schedules, of “controlled substances.” See generally id. §§ 124.203–.212.

As the term is used in chapter 124, a “controlled substance” is “a drug,

substance, or immediate precursor in schedules I through V of division II

of this chapter.”    Id. § 124.101(5).   The schedules categorize various
                                            9

substances according to their relative potential for abuse, the degree to

which the substance has an accepted medical use, and likelihood that

abuse of the substance would lead to psychic or physical dependence.

Id. § 124.201. Contrary to Houck’s assertion, however, chapter 124 does

not define “prescription drug”; nor does it purport to present an

exhaustive list of substances which may be only dispensed by a

pharmacist pursuant to a practitioner’s prescription.                     We find no
limitation in chapter 124 on the board’s authority to define “prescription

drugs.”

       Our rejection of Houck’s contention that chapter 124 limits the

board’s authority to define “prescription drugs” is strengthened by the

careful distinctions drawn by the general assembly in chapter 155A

between      “controlled     substances”        and   “prescription      drugs.”        A

“prescription     drug”    may     be   either    a   “drug”     or   “device.”6      Id.

§ 155A.3(35)(c). A “drug” is any of the following:

       a.     A substance recognized as a drug in the current
              official United States Pharmacopoeia and National
              Formulary, official Homeopathic Pharmacopoeia, or
              other drug compendium or any supplement to any of
              them.

       b.     A substance intended for use in the diagnosis, cure,
              mitigation, treatment, or prevention of disease in
              humans or other animals.

       c.     A substance, other than food, intended to affect the
              structure or any function of the body of humans or
              other animals.

       d.     A substance intended for use as a component of any
              substance specified in paragraph “a”, “b”, or “c”.


       6A  “device” is “an instrument, apparatus, implement, machine, contrivance,
implant, in vitro reagent, or other similar or related article, including any component
part or accessory, that is required under federal or state law to be ordered or prescribed
by a practitioner.” Iowa Code § 155A.3(10). This case does not involve a “device,” and
we therefore consider only the portion of the statute pertaining to “drugs.”
                                       10
      e.     A controlled substance.

Id. § 155A.3(13) (emphasis added).          As in chapter 124, the term

“controlled substance” in chapter 155A refers to the substances or

precursors to the substances listed in the chapter 124 schedules.       Id.

§ 155A.3(6). Thus, in chapter 155A the terms “drug” and “prescription

drug” are not limited to the substances in the controlled substance

schedules.   Although the legislature has granted the board only the

limited authority to recommend to the general assembly substances to be

designated as “controlled substances,” id. § 124.201, no such limitation

appears in section 155A.3(35)(c) in connection with the board’s authority

to define “prescription drugs.”

      2.     Validity of the board’s compounding rule. Having found the

board could rationally conclude it had the authority to require a drug to

be dispensed by prescription only, we must determine whether the

board’s compounding rule is irrational, illogical, or wholly unjustifiable.

Houck contends the relevant portion of the rule is irrational because it

forbids pharmacists, who have special training regarding interactions

between drugs, from combining and distributing compounds consisting

exclusively of substances available without a prescription while allowing

nonpharmacists to do so.      We disagree.    The board’s inclusion of all

compounded substances within the definition of “prescription drug” is

sufficiently related to the goals of chapter 155A to survive our scrutiny

under the applicable deferential standard of judicial review.

      Rule 20.2 is properly within the bounds of the board’s authority

under section 155A.3(35).         As noted above, that statute requires a

“prescription drug” be a “drug or device.” Id. § 155A.3(35)(c). A “drug”

includes “[a] substance, other than food, intended to affect the structure

or any function of the body of humans.” Id. § 155A.3(13)(c). The product
                                     11

compounded by Houck for Meyer easily fits within this definition of

“drug.”     Rule 20.2 promulgated by the board expressly confines the

definition of compounding to “preparing, mixing, assembling, packaging,

and labeling a drug or device for an identified individual patient . . . .”

Iowa Admin. Code r. 657—20.2 (emphasis added).              Because the rule

applies only to compounded “drugs” and “devices,” it is firmly within the

board’s authority to require that drugs or devices be dispensed on
prescription only.

      A rational and logical connection exists between the rule and the

board’s duties under chapter 155A. The purpose of chapter 155A is “to

promote, preserve, and protect the public health, safety, and welfare

through the effective regulation of the practice of pharmacy . . . .” Iowa

Code § 155A.2. The board asserts it enacted rule 20.2 in order to draw a

bright line between the practice of medicine and the practice of

pharmacy.      Generally speaking, the practice of medicine involves the

intake of patients, diagnosis of illnesses, and prescription of treatment,

while the practice of pharmacy primarily consists of preparing and

dispensing           medications.               By         requiring      the

“prescriber/patient/pharmacist” relationship as a prerequisite to the
dispensing of compounded drugs by pharmacists, the board has

exercised    administrative   discretion   to   prohibit   pharmacists   from

diagnosing illnesses and prescribing treatment for their customers—

functions traditionally undertaken by doctors.             The board could

rationally and logically have concluded this exercise of discretion clearly

separating the pharmacist function from that of the prescriber advances

the health, safety, and welfare of pharmacists’ customers.

      Our confidence in the conclusion the board’s rule is neither

illogical nor unreasonable is not diminished by the fact that it does not
                                    12

preclude      nonpharmacists    from     compounding      nonprescription

substances. Nonpharmacists are not licensed to dispense drugs, and do

not hold themselves out as experts in compounding substances sold to

treat health problems suffered by human beings.        As a consequence,

there is no significant market for the compounding services of

nonpharmacists.     Pharmacists, on the other hand, are licensed and

widely regarded by their customers as experts who reliably dispense
drugs manufactured by others or compounded by them.            The board

could logically and rationally conclude the substantial market for the

compounding services of pharmacists justifies regulation, and the

nonexistent demand for compounding services by nonpharmacists does

not.   Furthermore, chapter 155A grants the board no authority to

regulate the activities of nonpharmacists.

       Houck correctly posits that pharmacists are not prohibited by

statute or agency rule from recommending nonprescription medications

to customers who describe their symptoms and seek advice. He relies on

this fact to support his contention that the board does not truly draw the

line between pharmacy and medicine at “diagnosing” and “prescribing.”

Even if we acknowledge the apparent plausibility of Houck’s contention,
however, we conclude it does not undermine the board’s authority to

prohibit compounding of drugs without a prescription or render rule 20.2

irrational.    The board could rationally conclude, as it did, that

compounding of substances—including “drugs” not enumerated as

controlled substances under chapter 124 and consisting entirely of “over-

the-counter” components—by pharmacists without a prescription for the

treatment of maladies or symptoms presented by customers poses risks

to the public health, safety, and welfare. Accordingly, rule 20.2 is not

rendered invalid as a consequence of the board’s failure to require a
                                         13

prescription for the dispensing by pharmacists of “over-the-counter”

drugs manufactured by others.

      3.     Constitutional challenge.        Houck also contends the board’s

regulation violates the equal protection clauses of the federal and Iowa

Constitutions because it unfairly discriminates against pharmacists with

respect to compounding of nonprescription substances. See U.S. Const.

amend. XIV; Iowa Const. art. 1, § 6. Houck is a licensed pharmacist,
and is therefore not similarly situated to a non-pharmacist.                    The

legislature may therefore treat him differently than a non-pharmacist.

See In re Det. of Hennings, 744 N.W.2d 333, 339 (Iowa 2008) (noting

dissimilar treatment of persons not similarly situated does not offend

equal protection).     Because he has failed to demonstrate dissimilar

treatment of similarly situated individuals, Houck’s equal protection

challenge to the board’s rule is without merit.

      B.     Noncompounding Violations. Houck also broadly asserts

the factual findings underlying the board’s decision to sanction him for

the other, noncompounding violations were not supported by substantial

evidence.    While asserting the board made its findings of fact “based

solely on its compliance officer’s report regarding arguable and
meaningless minor violations” of administrative rules, and that the

violations   were    the   result   of   a    “hyper-technical   application”    of

administrative rules, Houck does not actually assail the substantiality of

the evidence supporting the facts found by the board. Upon a careful

review of the record, we find ample support for the board’s finding that

Houck engaged in a “pattern of choosing which rules to follow and which

rules to ignore.”     The board’s findings are supported by substantial

evidence.
                                    14

      C.    Sanction.    We have previously noted the limited scope of

judicial review of sanctions imposed by administrative agencies. When a

“licensing board is made up of members of the profession they are

licensing, the court should not second guess the board’s decision” as to

the appropriate sanction. Burns v. Bd. of Nursing of Iowa, 528 N.W.2d

602, 605 (Iowa 1995). The pharmacy board is primarily constituted of

pharmacists, see Iowa Code § 174.14(5), and we see no basis in the
record to depart from this sound rule.        We accordingly uphold the

board’s findings that Houck’s serial violations of administrative rules

warranted the imposition of a three-year probation.

      IV.   Conclusion.

      We find the board could have rationally concluded the general

assembly delegated to it the authority to designate drugs compounded by

pharmacists as “prescription drugs” to be dispensed only if prescribed by

a practitioner.   The rule adopted by the board consistent with that

authority is not irrational, illogical, or wholly unjustifiable. The board’s

adoption of that rule and enforcement of it against Houck did not deprive

him of equal protection of the law.      The board’s factual findings are

supported by substantial evidence in the record.
      AFFIRMED.

      All justices concur except Baker, J., who takes no part.
