Chapter 1 – The Law and the Legal System

State and Federal Governance of Pharmacy and Pharmaceuticals

Federal Law State Law

Food and Drug Administration
DHEC Bureau of Drug Control
(FDA)

Drug Enforcement Administration

DHEC Bureau of Drug Control
(DEA)

Consumer Products Safety Commission

(CSPC)

Federal Trade Commission (FTC)

S.C. Board of Pharmacy

State Governance of Pharmacy Practice and Drug Distribution

1. Board of Pharmacy (SC Department of Labor, Licensing, and Regulation)
Traci Collier, Pharm D, Administrator traci.collier@llr.sc.gov

2. DHEC Bureau of Drug Control (SC Department of Health and Environmental

Lisa Thomson, RPh Bureau Director www.scdhec.gov/administration/drugcontrol
803-898-DHEC, thomsola@dhec.sc.gov

Federal Governance of Drug Distribution and Safety

1. FDA (Food and Drug Administration) www.fda.gov
2. DEA (Drug Enforcement Administration) www.dea.gov
3. CPSC (Consumer Product Safety Commission) www.cpsc.gov

Drug Distribution vs. Pharmacy Practice

• Drug distribution
− Safety and efficacy of drugs
− Prescription or non-prescription status
− Federal and state control
• Pharmacy Practice
− State control
− Practice of Pharmacy is not governed federally
Law Website Links Assignment – Before Next Class
• NABP/ SC Board of Pharmacy Newsletters 1. Visit each of the websites on previous slide
Link: https://llr.sc.gov/bop/news.aspx 2. Find the latest NABP SC Board of Pharmacy
• SC Board of Pharmacy – Links to all State Drug, Newsletter and identify one item
discussed in this issue
Pharmacy Practice, and Controlled Substance Laws 3. Find date, time and location of next SC
and Regulations Board of Pharmacy Meeting
Link: https://llr.sc.gov/bop/ 4. Sign-up for NABP e-news services:
(Newsroom)
• Drug Enforcement Administration (DEA) Website
• AWARxE
Homepage: • NABP e-News
http://www.deadiversion.usdoj.gov/index.html
• Food and Drug Administration Website
Homepage: http://www.fda.gov/
• Drug Related Information: http://www.fda.gov/Drugs/default.htm
• SC DHEC Bureau of Drug Control (State Control Substance Laws and Regulations)
Link: https://scdhec.gov/health-regulation/drug-control-register-verify
• DEA Pharmacist Manual: (DEA-DC-046)(EO-DEA154) Pharmacist Manual (Final) (usdoj.gov)

Nature and Role of Law

• General definition of law
− Requirements for human conduct applying to all persons within their jurisdiction
• Factors courts commonly apply in reaching decisions:
− Fundamental notions of fairness
− Custom or history involved
− Command of a political entity
− Best balance between conflicting societal interests

Pharmacy Laws
• Describe requirements of day-to-day practice
• Define relationship we have with the public we serve
• Defines acceptable conduct

Why are we so highly regulated?

Reasons to Regulate Drugs
• Market failures:
− Public goods
− Externalities
− Natural monopolies
− Information asymmetry

Public Goods
• Necessary and beneficial commodities that private entities will not supply because there is
no incentive
− Examples: orphan drugs; vaccines
Externality
• When the production or consumption of a good affects someone who does not fully consent
to the effect
• When the costs of the good are not fully incorporated in the price of the good
− Example: indiscriminate use of antibiotics

Monopoly
• When the fixed costs of providing a good are high, relative to the variable costs of producing
the good
− Example: patents and market exclusivity for new drugs

Information Asymmetry
• When the consumer is uninformed about the true value of a good
− Examples: prescription only drugs; written consumer information for certain drugs

Limits of the Law

• Certain human relationships
• De minimis violations
• Protecting individual freedoms while preventing harm to others

3 Branches of Government
• Legislative
− Makes laws
• Executive
− Enforces laws
• Judicial
− Interprets laws

Sources of Laws and Regulations

• U.S. Constitution → NO federal or state law may conflict
• Legislatures → Elected and enact laws called statutes
• Administrative Agencies → Make regulations to administer laws passed by leg
• Courts
− Interpret laws, render opinions, set precedents, becomes binding on all lower courts
Legislatures: Statutory Law
• U.S. Congress (federal laws or statutes)
• State Constitutions
• State Legislatures (state laws)
• Political Subdivisions (ordinances)

“Law” Made By Administrative Agencies

• Administrative agencies are created by legislatures to administer a body of substantive law
− Examples:
▪ State
• SC Board of Pharmacy
• SC DHEC
▪ Federal
• FDA
• DEA
• HCFA (Health Care Financing Administration)

3 Hats of Admin Agencies

• Legislative → Promulgate regulations
• Enforcement
• Judicial → Court hearings

Administrative Agencies: Legislative Function

• Promulgate Regulations
− Regulations interpret, define and add detail to statutes
• Regulations enacted via notice and comment rulemaking
• Validity tests of a regulation
− Within the scope of Board’s authority
− Based upon statutory authority
− Reasonable relationship to public health safety & welfare

Administrative Agencies: Enforcement Function

• Inspections
• Audits
• Investigations
• Arrests

Administrative Agencies: Judicial Function

• Render decisions pursuant to “hearings” resembling court proceedings
• Decisions subject to judicial review
− Court will review record to determine if decision was based upon substantial
evidence
− If substantial evidence lacking, court will conduct an entirely new trial
Federal Agencies
• Regulations published in Federal Register (Fed. Reg.) and Code of Federal Regulations (CFR)
• Federal Register: Daily publication of proposed and final regulations and notices
• CFR: Compilation of final regulations divided and indexed by subject matter, revised annually
a) proposed regulations published in federal and state registers
b) final regulations published in federal or state code of regulations
a) Ex. 47 FedReg 23618 (1979)
b) Ex. 21 CFR S 120.200

Law Made By Courts: Common Law

• Common law refers to judicial opinions and was adopted from the English judicial system
• Judicial opinions: Decisions of the court
− Enforceable as law
− Binding on lower courts in the same jurisdiction
• Stare decisis
− Opinions are binding on lower courts in the same jurisdiction and serve as precedent
− Reasons for deviating from precedent include factual distinctions and changing times
or circumstances.

Relationship Of Common Law To Statutory Law

• Courts often must interpret the meaning and application of statutes
• Principles of interpretation include:
− Determining legislative intent if possible.
− Ordinary meaning of words
− Due process rights of the individual

Distinguishing Criminal, Civil and Administrative Actions

• Criminal: Government v. private party
− Charged with a crime as prohibited by a statute and subject to penalties specified by
statute
− Objectives: Deter, punish, rehabilitate
• Civil: Private party v. private party
− May be based upon statute or common law legal rights
− Objective: compensation to injured party
• Administrative: Agency v. private party
− Disciplinary determination which may include warning, fines, licensure revocation or
suspension, probation
Legislative Process: Federal Level
• Congress
− Senate
− House of representatives
• Sponsor of a bill must be a legislator
• Bill is sent to appropriate congressional committee
− Holds hearings, conducts investigations
− Determines whether bill will go to Senate or House floor
• After bill leaves committee, majority leadership places bill on a calendar
• Bill must be debated and passed in one chamber before being sent to other chamber for
debate and passage
• Conference committees formed to rectify differences
• Role of the President
− Approve or veto bill
• Congress can override veto with two thirds vote
• https://youtu.be/tyeJ55o3El0

Legislative Process: State Level

• State legislatures generally modeled after Congress
• Legislative history generally harder to determine because fewer written records of
committee hearings and reports

The Judicial Process: Federal Court System

• U.S. Supreme Court
− Highest U.S. court. 9 justices with lifetime appointment
− Original jurisdiction only in cases involving ambassadors, other public ministers,
consuls and when a state is a party.
− Other cases heard by writ of certiorari (at its discretion)
• Court of Appeals
− 12 judicial circuits and courts. Primarily hear appeals
• District Courts
− Jurisdiction primarily based upon whether there is a federal law or constitutional
issue; diversity citizenship; or if a state or the U.S. is a party
• Specialty Courts
State Court System
• State supreme court
− Each state has one
• Intermediate appellate courts
− In more populated states
• Trial courts
− Often called county courts, superior courts, district courts or circuit courts
− Nearly unlimited jurisdiction
• Limited Jurisdiction Courts
− Probate, family, juvenile
• Very limited jurisdiction courts
− Traffic, small claims, magistrate court

Civil Court Procedures

• Selection of Court
− State court likely unless:
▪ Federal issue is involved
▪ Parties are from different states
• Parties
− Plaintiff: person bringing the action
− Defendant: person action is brought against
− Plaintiff’s name appears first in title of case
− Plaintiff must prove “standing”
▪ The challenged conduct has caused the plaintiff injury.
▪ There is a legally protectable interest.
• Statute of Limitations
− Limits the period of time in which a case can be filed
• Complaint, Summons, and Answer
− Complaint: contains all material facts of case and remedy requested
− Summons: issued by court notifying defendant of suit and commanding defendant to
file an answer
− Answer: admitting to or denying allegations
▪ Default judgment if answer not filed
• Discovery
− Pretrial process in which each side must give the other all facts, evidence, and names
of witnesses upon which it will rely
− Deposition: out-of-court testimony by a witness under oath
• Jury Selection
− Voir dire examination: the questioning by each side of potential jurors
− The jury’s role is to determine questions of fact.
− The judge must determine questions of law.
 • Witnesses
− Witnesses
▪ May be subject to subpoena, an order to appear in court
▪ Failure to appear may result in contempt of court.
− Expert witnesses
▪ Called when the factual subject matter is beyond the scope of jurors
• The Trial
− Motion for summary judgment: one party attempts to convince the judge that the
claims of the other side have no merit, even if correct.
− Motion for directed verdict: after the introduction of evidence, one party alleges that
the other lacks sufficient evidence.
− Objections: attempt to restrict the introduction of evidence or testimony; might
constitute issues of law for appeal
− After all evidence is presented, the judge instructs the jury as to the applicable law.
• Verdict and Appeal
− Judgment notwithstanding the verdict (NOV): the judge may rule contrary to the jury
if the jury clearly reached the wrong verdict.
− A mistrial may be granted if a major error or violation of law or procedure occurred
during the trial.
− Either party may appeal the final verdict based on an error of law.
− For an appeal, attorneys submit a “brief” to the court, citing the legal principles and
precedent involved and why the lower court erred.
• Criminal Court Procedures
− A defendant can be either indicted or arrested.
− Indictments are issued by a grand jury when it determines that enough evidence
exists for an arrest and trial.
− If arrested, the judge must determine at a preliminary hearing if there is enough
probable cause for an arrest; if so, the defendant must enter a plea at an arraignment.
− The parties may agree to a “plea bargain,” in which the defendant agrees to a lesser
charge rather than face a trial.
− Burden of proof is “beyond a reasonable doubt,” rather than a “preponderance of
the evidence” as in a civil trial.

Case Citations
• State and federal appellate court decisions are often reported and have citations.
• From the citation, one can tell the names of the parties, which court decided the case, and
the volume and page number where the case can be found.
Federal vs. State Law
• When federal and state law conflict, federal law will preempt state law under the Supremacy
Clause of the U.S. Constitution
• Conflicts generally exist when state law is less strict than federal law.
• Federal authority to regulate drugs generally arises from the Interstate Commerce Clause of
the U.S. Constitution
• State authority to regulate generally derives from the Tenth Amendment to the U.S.
Constitution and under its inherent police powers.
• State laws must bear a reasonable relationship to the public health safety and welfare.

Guide to Reading Court Opinions

• Purpose of Court Opinions
− Explanation of how court reached decision
− Application of laws to specific facts ("case")
− Sometimes court opinions don't describe "fullness" of the case
▪ Case may be dismissed, or reach confidential settlement
▪ Case may be appealed
▪ Published court opinions may not include all facts presented in the case
• 1–Parties
− Plaintiff(s)
− Defendant(s)
• 2–Procedural History
− Federal or State system
− Trial (District) or Appellate court
− Intermediate appellate or supreme appellate
− Case dismissed w/o trial?
− Case remanded to trial court from app. ct
• 3–Issue
− Issue being decided by the court is the purpose for reading the opinion
− Issue is often concisely stated in the opinion
▪ "The issue before the court..."
▪ However, court may be subtle in identifying the issue
• 4–Facts
− Court will only include the facts necessary to render the opinion
• 5–Standard of Review
− Is a factual issue or a legal issue being decided?
▪ Usually, trial courts are directed to deciding factual issues, whereas appellate
courts decide legal issues
− Terms that are sometimes used to signal std of review
▪ "de novo"
▪ Deference
 • 6–Result or Conclusion
− Outcome of the case
▪ Relief granted to plaintiff(s)
▪ Case dismissed in favor of defendant(s)
▪ Case remanded to trial court
• 7–Language "Jargon"
− Consider using internet-based or other legal resources to understand terms

Case Summary
I. Issue
II. Facts
III. Court Interpretation and Decision
IV. Implications for Pharmacy Practice