Michigan Office of Administrative Hearings and Rules

Administrative Rules Division (ARD)

MOAHR-Rules@michigan.gov

REGULATORY IMPACT STATEMENT

and COST-BENEFIT ANALYSIS (RIS)

Agency Information:

Department name:

Licensing and Regulatory Affairs

Bureau name:

Bureau of Professional Licensing

Name of person filling out RIS:

Jennifer Shaltry

Phone number of person filling out RIS:

517-241-3085

E-mail of person filling out RIS:

ShaltryJ1@michigan.gov

Rule Set Information:

ARD assigned rule set number:

2022-6 LR

Title of proposed rule set:

Pharmacy - Controlled Substances

Comparison of Rule(s) to Federal/State/Association Standard

1. Compare the proposed rules to parallel federal rules or standards set by a state or national licensing agency or

accreditation association, if any exist.

Under the Controlled Substances Act, (CSA), 21 USC 801 et seq., the federal government regulates the production,

possession, and distribution of controlled substances. The CSA places drugs, chemicals, and plants into one of five

schedules based on certain factors, including, but not limited to, the medical use of the substance and the potential

abuse of the substance. In addition, the CSA requires individuals who manufacture, distribute, or dispense a

controlled substance to be registered with the Drug Enforcement Administration in the U.S. Department of Justice.

Registrants are required to keep a record of each controlled substance that was manufactured, received, sold,

delivered, or disposed of, and maintain detailed inventories.

Each state establishes its own requirements with respect to the manufacture, distribution, and dispensing of controlled

substances. In Michigan, Article 7, Controlled Substances, of the Michigan Public Health Code (Code) provides for

the scheduling of controlled substances as well as establishes requirements for the licensure to manufacture,

distribute, and dispense controlled substances. The CSA requires individuals who are registered under the CSA to

keep certain records.

A. Are these rules required by state law or federal mandate?

MCL 24.245(3)

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The following provisions of the Code mandate rules:

MCL 333.7203 requires the board to promulgate a rule to schedule a substance if it finds the substance has a potential

for abuse.

MCL 333.7303 requires the board to designate by rule the controlled substances in Schedules 3 to 5 to be reported.

MCL 333.7333a requires the department to establish an electronic system for monitoring controlled substances.

MCL 333.17754a requires the department to establish by rule the requirements for obtaining a waiver from

electronically transmitting all prescriptions, including controlled substances.

B. If these rules exceed a federal standard, please identify the federal standard or citation, describe why it is

necessary that the proposed rules exceed the federal standard or law, and specify the costs and benefits arising out

of the deviation.

There are various substances that are scheduled more stringently in the proposed rules than in the CSA. In the CSA,

substances have been divided into 5 schedules as published in 21 CFR 1308.11 to 1308.15. The authority for the

more stringent rule is MCL 333.7214, MCL 333.7201, and MCL 333.7220. It is necessary that these substances are

listed in a higher schedule in this state than in the CSA as the legislature or Michigan Board of Pharmacy has applied

the criteria for scheduling substances in MCL 333.7202, and have found that the substance has the potential for abuse

in this state. The benefit of scheduling a substance more stringently is greater protection for the public from misuse of

the substance. The costs of scheduling a substance more stringently are additional regulation of the misuse or

diversion of the substance.

The remaining proposed rules do not exceed federal standards.

2. Compare the proposed rules to standards in similarly situated states, based on geographic location, topography,

natural resources, commonalities, or economic similarities.

Although there are similar provisions to some of the proposed rules at the federal level and other states, the proposed

rules do not exceed similar regulations, compliance requirements, or other standards adopted at the state, regional, or

federal level.

Part 2 Schedules: The rules currently adopt the complete list of drugs and other substances that are considered

controlled substances under the CSA, that have been divided into 5 schedules as published in 21 CFR 1308.11 to

1308.15. The adoption of the federal scheduling is subject to state laws that schedule, reschedule, or deschedule

drugs, and MCL 333.7201. MCL 333.7201 allows the Michigan Board of Pharmacy to add substances, delete, or

reschedule all substances that are enumerated in the schedules listed in state statutes. The proposed changes to R

338.3111 clarify that the federal schedule is adopted subject to drugs scheduled by the state after January 6, 2022, and

the rules promulgated by the Michigan Board of Pharmacy. The proposed rules are consistent with the standards

required by the Code and are largely consistent with the requirements of other states in the Great Lakes Region.

Brorphine was removed from the rule as an exception to the federal schedule because it is scheduled federally as a

Schedule 1 drug. It is not scheduled in Illinois, Indiana, Minnesota, Ohio, and Pennsylvania. It is a Schedule 1 drug

in Wisconsin and New York.

Gabapentin is not a scheduled federally or in Indiana, Ohio, Minnesota, New York, or Pennsylvania. However,

Illinois and Wisconsin are monitoring this drug. The proposal is to remove Gabapentin from the rule as a Schedule 5

drug to align with the federal scheduling and the majority of the states in the Great Lakes Region. It will not be

classified as a controlled substance upon removal.

Isomers are scheduled federally and are considered a Schedule 1 drug but are defined differently depending upon

what section of the Code of Federal Regulations they are listed in. Isomers are Schedule 1 drugs in all of the Great

Lakes Region states except for Indiana and Ohio. The proposed rules provide an exception to the federal scheduling

so that the broader definition of this form of drug, defined in MCL 333.7212(3) would be adopted.

MCL 24.245(3)

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Pentazocine was removed from the rule as a Schedule 5 drug and will become a Schedule 4 drug to align with federal

scheduling. This drug is scheduled similarly in all other Great Lakes Region states.

Salvia Divorum and Salvinorum A are not scheduled federally. However, they are Schedule 1 drugs in all of the Great

Lakes Region states except for Minnesota and New York. The proposed rules provide an exception to the federal

scheduling so these drugs would be included in the Michigan Board of Pharmacy schedule. These drugs were

scheduled by the Michigan legislature before January 6, 2022, MCL 333.7212(1)(v) and (w), and are included in the

board’s schedule list for ease of public use.

Synthetic Cannabinoids are Schedule 1 drugs federally. They are Schedule 1 drugs in all of the Great Lakes Region

states. The proposed rules provide an exception to the federal scheduling so that the broader definition of this form of

drug, defined in MCL 333.7212(1)(e), would be adopted.

Synthetic Cathinones are Schedule 1 drugs federally. They are Schedule 1 drugs in Illinois, Indiana, Ohio, and

Pennsylvania. They are not scheduled in Minnesota, New York, or Wisconsin. The proposed rules provide an

exception to the federal scheduling so that the broader definition of this form of drug, defined in MCL 333.7212(1)

(x), would be adopted.

Part 3 Licenses:

Clarifying language was provided to R 338.3132, which pertains to controlled substance licenses. The rules require a

separate controlled substance license for each automated device located at an affiliated hospital location, or a hospital,

county medical care facility, nursing home, hospice, or other skilled nursing facility. The proposed changes state that

if substances are stored at a health facility without an on-site pharmacy or an automated device stocked by a

pharmacy, a designated prescriber must obtain a controlled substance license for the address where the drugs will be

stored.

Additionally, a license exception was made for an emergency kit that contains controlled substances. All of the Great

Lakes Region states have regulations about automated devices and emergency kits. None require a separate controlled

substance license for the emergency kit. Further, the Drug Enforcement Agency does not require a separate

registration for emergency kits in long term care facilities.

Part 5 Records:

R 338.3153, regarding invoices, acquisition, dispensing, administration, and distribution records, requires a licensee

to maintain patient sales receipts and dispensing records in paper or electronic form for 90 days in the pharmacy for

review. Additionally, a licensee must keep the original prescription record for 5 years after the last date of dispensing.

The proposed rules permit a licensee to make an electronic duplicate of the original paper prescription, which will

become the original prescription, 2 years from the last dispensing date. The proposed rule also requires a pharmacy

that holds an additional license for an automated dispensing system that dispenses controlled substances to store

inventories and schedule order forms at the licensed location of the automated device. This rule was changed to

ensure consistency with the Pharmacy – General Rules. This rule was moved from another section and clarified the

requirement that patient sales receipts and dispensing records need to be available for review by the department.

The proposed changes to R 338.3154, regarding medication records in medical institutions, clarify that if a controlled

substance is dispensed from an automated device, then the documentation maintained on-site in the pharmacy must

include the automated device’s manufacturer name and model number and the name and address of the facility where

the automated device is located.

All states in the Great Lakes Region have regulations regarding the maintenance of receipts and dispensing records

for controlled substances.

Part 6 Dispensing and Administration of Controlled Substance Prescriptions:

The proposed changes to R 338.3161, pertaining to controlled substance prescriptions, clarify that a paper prescription

complies with the rule if it contains preprinted numbers representing the quantity next to a box or line that the

MCL 24.245(3)

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prescriber can check. The prescription is not required to have preprinted numbers representing the quantity next to a

box or line. The changes also add the requirement that the professional designation for the prescribing practitioner

must be stored electronically so that the pharmacy can look up the credential of the prescriber instead of it being

required to be written on the prescription. This will allow pharmacists to fill more prescriptions instead of declining to

fill a prescription that is missing the information on the written document.

The SUPPORT Act and corresponding Code of Federal Regulations, 42 CFR 423, require electronic prescribing under

Medicare Part D for Schedule II to V controlled substances and provide for exceptions to this requirement. Pursuant

to MCL 333.17754a, proposed R 338.6162a allows a prescriber to seek waiver of electronic prescription transmission

requirements if the prescriber can attest that he or she intends, within 12 months, to not regularly practice their

licensed profession for financial gain or as a means of livelihood. This broadens the exception to the electronic

transmission requirements and permits licensees in this situation to seek a waiver so that they do not have to purchase

the necessary equipment to comply with the requirements.

Lastly, the proposed changes to R 338.3165, pertaining to emergency dispensing of Schedule 2 substances, clarify that

the prescriber must deliver to the dispensing pharmacist a written prescription postmarked within 7 days after the date

the prescription was dispensed, or electronically transmit the prescription under R 338.3162a.

Part 7 Distributions: R 338.3185 pertains to discontinuances and transfers of business activities or practice. The

proposed changes state that a licensee must provide written notification to the department 15 days before the

controlled substances are transferred.

A. If the rules exceed standards in those states, please explain why and specify the costs and benefits arising out of

the deviation.

The rules do not exceed standards of other states in the Great Lakes region.

3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the proposed

rules.

MCL 24.245(3)

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Schedules: The proposed rules adopt the complete list of drugs and other substances that are considered controlled

substances under the CSA except for those drugs or other substances treated differently by this state’s laws and rules

including: Isomers, Salvia Divorum, Salvinorum A, Synthetic Cannabinoids, and Synthetic Cathinones.

Licenses: There are no other laws or rules that duplicate, overlap, or conflict with the changes requiring that a

designated prescriber obtain a controlled substance license for the address where drugs are stored at a health facility

without an on-site pharmacy or an automated device stocked by a pharmacy. The same holds true for exempting an

emergency kit from licensure.

Records: There are no other laws or rules that duplicate, overlap, or conflict with the changes requiring a licensee to

maintain patient sales receipts and dispensing records for 90 days, allowing a licensee to make an electronic duplicate

of a paper prescription 2 years from the last dispensing date, and requiring inventories and Schedule 2 order forms to

be stored at the licensed location of the automated device that dispenses controlled substances.

Dispensing and Administration of Controlled Substance Prescriptions: The SUPPORT Act, and corresponding Code

of Federal Regulations, 42 CFR 423, require electronic prescribing under Medicare Part D for Schedule II to V

controlled substances and provide for exceptions to this requirement. Pursuant to MCL 333.17754a, the proposed

rules provide a waiver from electronic prescribing in certain circumstances where the licensee will not regularly

practice their licensed profession for financial gain or as a means of livelihood within the next 12 months. Lastly,

there are no other laws or rules that duplicate, overlap, or conflict with the changes that add the requirement that the

professional designation for the prescribing practitioner be stored electronically or requiring a prescriber, who made

an emergency prescription of a schedule 2 drug to deliver to the dispensing pharmacist the written prescription

postmarked within 7 days of the date the prescription was dispensed, or to electronically transmit the prescription

under R 338.3162a.

Distributions: With regard to the transfer of controlled substances, the licensee must obtain approval by the Drug

Enforcement Agency pursuant to 21 CFR 1301.52.

A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and local laws

applicable to the same activity or subject matter. This section should include a discussion of the efforts undertaken

by the agency to avoid or minimize duplication.

As a result of the Michigan Board of Pharmacy Rules Committee Work Group process with the public and research

regarding federal laws and regulations, the proposed rules are not in conflict with and are consistent with federal laws

and regulations.

The proposed rules adopt the complete list of drugs and other substances that are considered controlled substances

under the CSA except for those drugs or other substances treated differently by this state’s laws and rules including:

Isomers, Salvia Divorum, Salvinorum A, Synthetic Cannabinoids, and Synthetic Cathinones.

The rules are consistent with federal and state laws applicable to controlled substance licensing, required records

pertaining to controlled substances, dispensing and administration of prescriptions, distributions, and the federal

requirements and exceptions to electronic prescribing.

4. If MCL 24.232(8) applies and the proposed rules are more stringent than the applicable federally mandated

standard, provide a statement of specific facts that establish the clear and convincing need to adopt the more

stringent rules.

The federal government has not mandated that the state promulgate the proposed rules, consequently, MCL 24.232(8)

is not applicable.

5. If MCL 24.232(9) applies and the proposed rules are more stringent than the applicable federal standard,

provide either the Michigan statute that specifically authorizes the more stringent rules OR a statement of the

specific facts that establish the clear and convincing need to adopt the more stringent rules.

There are various drugs that are scheduled more stringently in the proposed rules than in the CSA. The authority for

the more stringent rules is MCL 333.7214, MCL 333.7201, and MCL 333.7220.

MCL 24.245(3)

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Purpose and Objectives of the Rule(s)

6. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.

The proposed rules are designed to do the following:

-Reduce confusion by the public and licensees regarding which substances are scheduled in this state.

-Clarify that if controlled substances are stored in an automated device at a facility without an on-site pharmacy, a

designated prescriber must obtain a controlled substance license for the address where the drugs will be stored.

-Clarify that a controlled substance license is not required for an emergency kit that contains controlled substances.

-Clarify records requirements by stating that licensees must maintain, for department review, patient sales receipts and

dispensing records for 90 days and that 2 years from the date of the last dispensing, an electronic duplicate of an

original paper prescription may be made and utilized as the original prescription.

-Clarify that inventories and Schedule 2 order forms must be stored at the licensed location for the automated device

that dispenses controlled substances.

-Clarify that a pharmacy in control of an automated device that dispenses controlled substances must document the

manufacturer’s name, and the name and address of the facility where the device is located.

-Clarify that a prescription is not required to have preprinted numbers representing the quantity next to a box or line.

-Clarify that the professional designation for the prescribing practitioner may be stored electronically instead of

written on the prescription.

-Clarify that a prescriber may seek a waiver of the electronic transmission requirements if the prescriber can attest that

he or she intends, within the next 12 months, to no longer regularly practice in the licensed profession for financial

gain or as a means of livelihood.

-Clarify that a prescriber who prescribed a Schedule 2 substance in an emergency, must deliver to the dispensing

pharmacist a written prescription postmarked within 7 days of the dispensing date, or electronically transmit the

prescription under R 338.3162a.

-Require that a licensee provide written notification to the department 15 days before the controlled substances are

transferred.

A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.

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The proposed rules are expected to alter the frequency of the targeted behavior as follows:

-The public and licensees will know which substances are scheduled in this state.

-Licensees will know that if substances are stored at a health facility without an on-site pharmacy or an automated

device stocked by a pharmacy, a designated prescriber must obtain a controlled substances license for the address

where the drugs are stored.

-Licensees will understand that a separate controlled substance license is not needed for an emergency kit that

contains controlled substances.

-Licensees will further understand the records requirements for controlled substances. Specifically, licensees will

know that they must maintain, for department review, patient sales receipts and dispensing records for 90 days and

that 2 years from the date of the last dispensing, an electronic duplicate of an original paper prescription may be made

and utilized as the original prescription.

-Licensees will be aware that inventories and Schedule 2 order forms must be stored at the licensed location for the

automated device that dispenses controlled substances and that a pharmacy in control of an automated device that

dispenses controlled substances must document the manufacturer’s name, and the name and address of the facility

where the device is located.

-With regard to dispensing and administration of controlled substance prescriptions, licensees will understand that a

prescription is not required to have preprinted numbers representing the quantity next to a box or line.

-Licensees will be aware that the professional designation for the prescribing practitioner may be stored electronically

instead of written on the prescription.

-Licensees will be aware that a prescriber may seek a waiver of the electronic transmission requirements if the

prescriber can attest that he or she intends, within the next 12 months, to no longer regularly practice in the licensed

profession for financial gain or as a means of livelihood.

-The licensee will understand that a prescriber who prescribed a Schedule 2 substance in an emergency, must deliver

to the dispensing pharmacist a written prescription postmarked within 7 days of the dispensing date, or electronically

transmit the prescription under R 338.3162a.

-The licensee will know that written notification of a transfer of controlled substances must be given to the department

15 days before the transfer.

B. Describe the difference between current behavior/practice and desired behavior/practice.

The proposed rules have been written to provide clarity for licensees. The difference between current behavior and

desired behavior is as follows:

-Instead of frequently contacting the department, licensees and the public will understand that the federal schedule of

controlled substances is adopted with exceptions that are provided for in statute and rule.

-Instead of contacting the department to ask if a license is needed, candidates will know when they must apply for a

controlled substance license.

-Licensees will know the record requirements for controlled substances in that they must maintain, for department

review, patient sales receipts and dispensing records for 90 days and that 2 years from the date of the last dispensing,

an electronic duplicate of an original paper prescription may be made and utilized as the original prescription.

-Licensees will be aware that inventories and Schedule 2 order forms must be stored at the licensed location for the

automated device that dispenses controlled substances and that a pharmacy in control of an automated device that

dispenses controlled substances must document the manufacturer’s name, and the name and address of the facility

where the device is located.

- Licensees will clearly understand that a prescription is not required to have preprinted numbers representing the

quantity next to a box or line and that the professional designation for the prescribing practitioner may be stored

electronically instead of written on the prescription.

-Licensees will know when they can seek a waiver from the electronic transmission requirements.

-Licensees will know that that a prescriber must deliver a written prescription for a Schedule 2 substance, that was

written in an emergency, to the dispensing pharmacist. It must be postmarked within 7 days of the dispensing date or

transmitted under R 338.3162a.

-The licensee will know that written notification of a transfer of controlled substances must be given to the department

15 days before the transfer.

C. What is the desired outcome?

MCL 24.245(3)

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The desired outcome of the proposed rules is as follows:

-Licensees and the public will understand how to follow the federal, state, and board scheduling of controlled

substances.

- Licensees will better understand what situations require a controlled substance license.

-Licensees will have clearer requirements for the records that must be kept for controlled substances and controlled

substance prescriptions.

-Licensees will better understand when a waiver from the electronic prescription requirements can be granted and when

the prescriber must send the written controlled substance prescription to the dispensing pharmacist in emergency

situations.

-The department will know when transfers of controlled substances are taking place.

7. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood

that the harm will occur in the absence of the rule.

The proposed rules are designed to alter the following harm:

-The use of a drug by the public without proper protections because it is not clear to the public and licensees that it is a

controlled substance.

-Licensees dealing with controlled substances without a proper license.

-Licensees not keeping proper records pertaining to controlled substances.

-Licensees not being aware of when they can seek a waiver from the electronic prescribing requirements.

-Licensees not knowing when a prescription must be sent or received in situations when a controlled substance

prescription was written and dispensed in an emergency situation.

-The department would not be aware that dangerous substances are being transferred therefore increasing the risk of

drug diversion.

The harm that will result from the behavior that the proposed rules are designed to alter will continue in the absence of

the proposed rules.

A. What is the rationale for changing the rules instead of leaving them as currently written?

The harm that will result from the behavior that the proposed rules are designed to alter will continue in the absence

of the proposed rules.

8. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting a

regulatory environment in Michigan that is the least burdensome alternative for those required to comply.

The proposed rules provide a regulatory system for controlled substances. To protect the health and safety of

Michigan’s citizens, it is important that health professionals that deal with controlled substances adhere to the rule

requirements and professional standards of care. The rules are created with public safety in mind with scheduling

designations, clear requirements for licensure, records, and dispensing and administration of controlled substance

prescriptions.

9. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.

R 338.3137 Eliminate drug-treatment program prescriber license requirement. This rule was rescinded because the

drug treatment prescriber license was eliminated, and the rule was no longer needed.

R 338.3163 Individual with substance use disorder; prescribing, dispensing, and administering controlled substance.

This rule was rescinded because Congress passed the Mainstreaming Addiction Treatment (MAT) Act that removed

the federal “DATA 2000” or “DATA-Waiver Program. This change is intended to reduce barriers to obtaining

medications for opioid use disorder (OUD) by eliminating burdens on providers who currently prescribe medications

and new providers who wish to treat patients with OUD. Due to this movement at the federal level, the Michigan

Board of Pharmacy recommends that this rule be rescinded, which regulates prescribing, dispensing and

administering a controlled substance to an induvial with substance use disorder. The Bureau of Professional

Licensing announced in July 2023 that it will not be enforcing this rule until the rule is either modified or rescinded.

This rule limited the circumstances under which a practitioner could treat an individual with substance use disorder,

as well as the number of individuals that could be treated. All other laws and rules, both federal and state, that deal

with treating a substance use disorder must still be followed.

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Fiscal Impact on the Agency

Fiscal impact is an increase or decrease in expenditures from the current level of expenditures, i.e. hiring additional staff,

higher contract costs, programming costs, changes in reimbursements rates, etc. over and above what is currently

expended for that function. It does not include more intangible costs for benefits, such as opportunity costs, the value of

time saved or lost, etc., unless those issues result in a measurable impact on expenditures.

10. Please provide the fiscal impact on the agency (an estimate of the cost of rule imposition or potential savings

for the agency promulgating the rule).

The department does not expect the implementation of the proposed rules to result in additional costs or savings for

the department.

11. Describe whether or not an agency appropriation has been made or a funding source provided for any

expenditures associated with the proposed rules.

The licensing and regulation of controlled substances, including the promulgation and implementation of rules, is

funded by the collection of licensing fees. As a result, there was no reason to make an agency appropriation or

provide a funding source. Also, the department does not expect the proposed rules to increase expenditures.

12. Describe how the proposed rules are necessary and suitable to accomplish their purpose, in relationship to the

burden(s) the rules place on individuals. Burdens may include fiscal or administrative burdens, or duplicative

acts.

MCL 24.245(3)

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The proposed rules adopt the complete list of drugs and other substances that are considered controlled substances

under the CSA except for those drugs or other substances treated differently by this state’s laws and rules including:

Isomers, Salvia Divorum, Salvinorum A, Synthetic Cannabinoids, and Synthetic Cathinones. These are necessary to

provide public protection from misuse of the drugs and substances. The burdens caused by the rules are increased

regulations that need to be followed.

The proposed changes regarding licenses clarify that if substances are stored at a facility without an on-site pharmacy

or an automated device stocked by a pharmacy, a designated prescriber must obtain a controlled substance license for

the address where the drugs will be stored. Additionally, the proposed rules clarify that a separate license for an

emergency kit is not needed. These changes are necessary to provide clarity regarding licensure and alleviation from

a license regulation for emergency kits.

The proposed changes regarding records clarify that: the licensee must maintain patient sales receipts and dispensing

records for 90 days; a licensee may make an electronic duplicate of a paper prescription 2 years from the last

dispensing date; and require inventories and Schedule 2 order forms to be stored at the licensed location of the

automated device that dispenses controlled substances. Further, the clarification of what records must be maintained

and in what form allows for the licensee to clearly understand the requirements to know how to comply with the

rules. The changes did not create additional burden to the licensee.

The proposed changes to the rules regarding dispensing and administration of controlled substance prescriptions,

provide for a waiver from electronic prescribing in situations where the licensee will not regularly practice their

licensed profession for financial gain or as a means of livelihood within 12 months. This reduces a burden on

licensees that fall into this category.

The proposed change that adds the requirement that the professional designation for the prescribing practitioner be

stored electronically or requiring a prescriber, may be considered an additional burden but will result in fewer

problems with a prescription that may cause it to go unfilled. Lastly, the change that requires that a prescriber who

made an emergency prescription of a Schedule 2 drug, to deliver to the dispensing pharmacist a written prescription

postmarked within 7 days of the date the prescription was dispensed, or to electronically transmit the prescription

under R 338.3162a promotes compliance with the dispensing and administration regulations to allow for complete

records of the incident to be given to the pharmacist.

The proposed change that adds the requirement that a licensee notify the department 15 days before controlled

substances are transferred will help protect the health and safety of Michigan residents to decrease the chances of

drug diversion and to ensure proper record keeping.

The rules are required to provide a mechanism for controlled substance licensing and regulation of controlled

substances. The rules are not any more restrictive than is allowed by statute. Despite the cost-related burden the rules

and regulations are necessary.

A. Despite the identified burden(s), identify how the requirements in the rules are still needed and reasonable

compared to the burdens.

The requirements in the proposed rules are needed and reasonable compared to the minimal burdens outlined above

in order to protect the health, safety, and welfare of Michigan residents. The changes to the rules will protect

Michigan residents by scheduling dangerous drugs/substances, reducing the number of prescriptions that go unfilled

due to incomplete information on the prescription, and clarifying license, record, and distribution requirements to

reduce the frequency of abuse and diversion. The rules are required to provide a mechanism for controlled substance

licensing and regulation of controlled substances. The rules are not any more restrictive than is allowed by statute.

Despite the minimal burden, the rules and regulations are necessary.

Impact on Other State or Local Governmental Units

MCL 24.245(3)

RIS-Page 11

13. Estimate any increase or decrease in revenues to other state or local governmental units (i.e. cities, counties,

school districts) as a result of the rule. Estimate the cost increases or reductions for other state or local

governmental units (i.e. cities, counties, school districts) as a result of the rule. Include the cost of equipment,

supplies, labor, and increased administrative costs in both the initial imposition of the rule and any ongoing

monitoring.

There are no anticipated increases or decreases in revenues or costs to other state or local government units as a result

of the proposed rules.

14. Discuss any program, service, duty, or responsibility imposed upon any city, county, town, village, or school

district by the rules.

There are no actions that governmental units must take to comply with the proposed rules.

A. Describe any actions that governmental units must take to be in compliance with the rules. This section should

include items such as record keeping and reporting requirements or changing operational practices.

There are no actions that governmental units must take to comply with the proposed rules.

15. Describe whether or not an appropriation to state or local governmental units has been made or a funding

source provided for any additional expenditures associated with the proposed rules.

No appropriations have been made to any governmental units as a result of these rules. No additional expenditures

are anticipated or intended with the proposed rules.

Rural Impact

16. In general, what impact will the rules have on rural areas?

The proposed rules are not expected to impact rural areas. The proposed rules apply to licensees regardless of their

location.

A. Describe the types of public or private interests in rural areas that will be affected by the rules.

The proposed rules are not expected to impact public or private interests in rural areas. The proposed rules apply to

licensees regardless of their location.

Environmental Impact

17. Do the proposed rules have any impact on the environment? If yes, please explain.

No, the rules will not have an impact on the environment.

Small Business Impact Statement

18. Describe whether and how the agency considered exempting small businesses from the proposed rules.

The proposed rules impose requirements on individual licensees. Even if a licensee’s workplace qualifies as a small

business, the department could not exempt his or her business because it would create a disparity in the regulation of

the profession.

The proposed rules impose requirements on pharmacies and a prescriber’s workplace, both which may qualify as a

small business. The department did not consider exempting small businesses from the proposed rules as the proposed

rules are required by statute and they are necessary for the safety of the public no matter the size of the business.

19. If small businesses are not exempt, describe (a) the manner in which the agency reduced the economic impact

of the proposed rules on small businesses, including a detailed recitation of the efforts of the agency to comply

with the mandate to reduce the disproportionate impact of the rules upon small businesses as described below (in

accordance with MCL 24.240(1)(a-d)), or (b) the reasons such a reduction was not lawful or feasible.

The licensing rules regulate individual licensees. While a licensee may work independently or as part of a small

business, the law does not allow the rules to exempt these individuals from the requirements of the rules.

The proposed rules impose requirements on pharmacies and a prescriber’s workplace, both which may qualify as a

small business. The rules are required by statute and are necessary for the safety of the public no matter the size of

the business. Therefore, reducing any disproportionate impact upon small businesses is not lawful nor feasible.

MCL 24.245(3)

RIS-Page 12

A. Identify and estimate the number of small businesses affected by the proposed rules and the probable effect on

small businesses.

There are approximately 3,517 pharmacies in Michigan that may be considered small businesses depending on their

size and annual sales.

The department does not collect or have access to information that would allow it to identify and estimate the

number of small businesses involving prescribers and dispensers of controlled substances that may be affected. No

matter what type of business environment a licensee works in, he or she will have to take the necessary steps in order

to comply with the proposed rules. The rules do not affect small businesses differently. The anticipated effects on

licensees are minimal because the proposed rules clarify what is already required of licensees and not of the business

in which they may work.

B. Describe how the agency established differing compliance or reporting requirements or timetables for small

businesses under the rules after projecting the required reporting, record-keeping, and other administrative costs.

The agency did not establish separate compliance or reporting requirements for small businesses. The rules were

drafted to be the least burdensome on all affected licensees.

C. Describe how the agency consolidated or simplified the compliance and reporting requirements for small

businesses and identify the skills necessary to comply with the reporting requirements.

The agency did not consolidate or simplify compliance and reporting requirements with the proposed rules.

D. Describe how the agency established performance standards to replace design or operation standards required

by the proposed rules.

The agency did not establish performance standards to replace design or operation standards required by these rules.

20. Identify any disproportionate impact the proposed rules may have on small businesses because of their size or

geographic location.

The proposed rules impact an individual licensee as well as pharmacies. There is no expected disproportionate effect

on small businesses because of their size or geographic location.

21. Identify the nature of any report and the estimated cost of its preparation by small businesses required to

comply with the proposed rules.

There is no separate cost for report preparation specific to small businesses. The rules require a pharmacist and a

controlled substance licensee to comply with statutorily mandated record keeping for controlled substances.

However, there is no report that needs to be generated. Record keeping requirements apply to all licensees who hold

a controlled substance license and pharmacists who fill and dispense controlled substance prescriptions.

22. Analyze the costs of compliance for all small businesses affected by the proposed rules, including costs of

equipment, supplies, labor, and increased administrative costs.

There are approximately 3,517 pharmacies in the state. The department does not determine which licensed

pharmacies qualify as a small business. In addition, the department does not determine the annual gross sales or

number of full-time employees associated with each pharmacy license to allow for determining the number of small

businesses. However, the impact on licensees who qualify as a small business is minimized in the proposed rules

because they are written to provide the minimum amount of regulation necessary to protect the public. There is no

separate cost for report preparation specific to small businesses.

23. Identify the nature and estimated cost of any legal, consulting, or accounting services that small businesses

would incur in complying with the proposed rules.

There are no expected increased costs for small businesses concerning legal, consulting, or accounting services.

24. Estimate the ability of small businesses to absorb the costs without suffering economic harm and without

adversely affecting competition in the marketplace.

All pharmacies that dispense controlled substances in Michigan are subject to the same requirements and costs as a

result of the administrative rules. There are no expected costs that should adversely affect competition in the

marketplace.

The costs to a pharmacy are outweighed by the benefit of ensuring that the public is protected. Despite the minimal

burdens resulting from the proposed rules, the rules and regulations are necessary in order to provide a framework of

standards for the regulation of controlled substances to protect the public. There are no expected costs to small

businesses that will cause economic harm to a small business or the marketplace as a result of the proposed rules.

MCL 24.245(3)

RIS-Page 13

25. Estimate the cost, if any, to the agency of administering or enforcing a rule that exempts or sets lesser

standards for compliance by small businesses.

Exempting or setting lesser standards of compliance for pharmacies is not in the best interest of the public and would

increase the cost of protecting the public.

The proposed rules also impose requirements on individual licensees rather than on small businesses. Even if a

licensee’s employer qualifies as a small business, the department could not exempt his or her business because it

would create disparity in the regulation of controlled substance licenses. Therefore, exempting or setting lesser

standards of compliance for small businesses is not in the best interest of the public.

26. Identify the impact on the public interest of exempting or setting lesser standards of compliance for small

businesses.

The costs to a pharmacy are outweighed by the benefit of ensuring that the public is protected. Despite the minimal

burdens contained in the proposed rules, the rules and regulations are necessary to protect the public. Exempting or

setting lesser standards of compliance for small businesses is not in the best interest of the public.

The proposed rules also impose requirements on individual licensees rather than small businesses. Even if a

licensee’s employer qualifies as a small business, the department could not exempt his or her employer because it

would create disparity in the regulation of controlled substance licenses. Therefore, exempting or setting lesser

standards of compliance for small businesses is not in the best interest of the public.

27. Describe whether and how the agency has involved small businesses in the development of the proposed rules.

The department worked with multiple stakeholders at the Michigan Board of Pharmacy Rules Committee Work

Group meetings, that included members from the Board of Pharmacy, educational institutions, businesses, and other

members of the public in the development of the proposed rules. The board is composed of members of the

profession and public members who work in businesses in Michigan.

A. If small businesses were involved in the development of the rules, please identify the business(es).

Representatives from businesses were involved in the development of the rules. However, the department is not

aware if they meet the definition of a “small business.”

Cost-Benefit Analysis of Rules (independent of statutory impact)

28. Estimate the actual statewide compliance costs of the rule amendments on businesses or groups.

The department does not expect any statewide compliance costs of the proposed rules on businesses or groups in

addition to the impact on prescribers’ and dispensers’ employers and pharmacies.

A. Identify the businesses or groups who will be directly affected by, bear the cost of, or directly benefit from the

proposed rules.

There are approximately 3,517 pharmacies in Michigan. The proposed rules will impact pharmacies, prescribers, and

dispensers.

A licensee may work in a business, but no matter what type of business environment the licensee works in, he or she

will have to comply with the proposed rules.

The licensees and the public will directly benefit from the proposed changes to the rules.

B. What additional costs will be imposed on businesses and other groups as a result of these proposed rules (i.e.

new equipment, supplies, labor, accounting, or recordkeeping)? Please identify the types and number of businesses

and groups. Be sure to quantify how each entity will be affected.

The department does not expect the proposed rules to result in any other additional costs such as new equipment,

supplies, labor, accounting, or recordkeeping on businesses or other groups in addition to the impact on pharmacies

and employers.

29. Estimate the actual statewide compliance costs of the proposed rules on individuals (regulated individuals or

the public). Include the costs of education, training, application fees, examination fees, license fees, new

equipment, supplies, labor, accounting, or recordkeeping.

MCL 24.245(3)

RIS-Page 14

The department does not expect the proposed rules to result in additional costs for education or training, application

fees, examination fees, license fees, new equipment, supplies, labor, accounting, or record keeping on regulated

individuals or the public.

A. How many and what category of individuals will be affected by the rules?

Prescribers and dispensers of controlled substances will be affected by the proposed rules. There are 82,848

controlled substance licensees.

B. What qualitative and quantitative impact do the proposed changes in rules have on these individuals?

There are no other qualitative or quantitative impacts as it relates to the actual statewide compliance costs of the

proposed rules because the proposed rules create no expected increased or decreased costs for education, training,

experience, application fees, examination fees, or licensure fees.

30. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a result

of the proposed rules.

There may be reductions in costs associated with reductions in diversion and abuse of opioids, however, those costs

cannot be estimated at this time.

31. Estimate the primary and direct benefits and any secondary or indirect benefits of the proposed rules. Please

provide both quantitative and qualitative information, as well as your assumptions.

The proposed rules use clear, concise language, and implement the statutory requirements for scheduling, licensing,

records and dispensing and administration, and distribution of controlled substance prescriptions. The clear, concise

language allows the public and licensees to better understand the requirements.

32. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.

The rules are not expected to have an impact on business growth, job creation, or job elimination.

33. Identify any individuals or businesses who will be disproportionately affected by the rules as a result of their

industrial sector, segment of the public, business size, or geographic location.

There is not expected to be a disproportionate effect due to industrial sector, segment of the public, business size, or

geographic location.

34. Identify the sources the agency relied upon in compiling the regulatory impact statement, including the

methodology utilized in determining the existence and extent of the impact of the proposed rules and a cost-

benefit analysis of the proposed rules.

American Society of Consultant Pharmacists

https://www.ascp.com/page/issuedea

Electronic Transmission/Waivers

https://www.cms.gov/Medicare/E-Health/Eprescribing/Adopted-Standard-and-Transactions

https://www.govinfo.gov/content/pkg/FR-2020-08-17/pdf/2020-17127.pdf

Privacy and Security Solutions for Interoperable Health Information Exchange Report on State Prescribing Laws:

Implications for e-Prescribing, Table A-1 (healthit.gov)

Illinois

http://www.ilga.gov/commission/jcar/admincode/077/07703100sections.html

https://casetext.com/regulation/illinois-administrative-code

https://regulations.justia.com/states/illinois/title-68/part-1330/

http://ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1941&ChapAct=720%26nbsp%3BILCS%26nbsp%3B570%

2F&ChapterID=53&ChapterName=CRIMINAL+OFFENSES&ActName=Illinois+Controlled+Substances+Act%2E

MCL 24.245(3)

RIS-Page 15

Indiana

https://www.in.gov/isdh/27380.htm

http://iga.in.gov/legislative/laws/2019/ic/titles/035/#35-48

https://iga.in.gov/laws/2023/ic/titles/25#25-26-13.5

https://secure.in.gov/pla/3026.htm

https://law.justia.com/codes/indiana/2019/title-25/article-26/chapter-13-5/section-25-26-13-5-15/

https://casetext.com/regulation/indiana-administrative-code/title-856-indiana-board-of-pharmacy/article-1-

pharmacies-and-pharmacists/rule-856-iac-1-281-institutional-pharmacies-and-pharmacy-services

Minnesota:

https://www.revisor.mn.gov/statutes/cite/151

https://www.revisor.mn.gov/statutes/cite/151.58

https://www.revisor.mn.gov/statutes/cite/152

https://www.revisor.mn.gov/rules/6800.6700/

New York

https://www.nysenate.gov/legislation/laws/PBH/3306

https://regs.health.ny.gov/content/section-41518-pharmacy-services

Ohio

http://codes.ohio.gov/orc/3719

https://www.pharmacy.ohio.gov/LawsRules/General

https://codes.ohio.gov/ohio-administrative-code/rule-4729:5-3-17

https://codes.ohio.gov/ohio-administrative-code/rule-4729:9-1-01

https://codes.ohio.gov/ohio-administrative-code/rule-4729:5-9-03.1

Pennsylvania

www.pacode.com

https://apps.health.pa.gov/ddc/DDCFaqs.asp

https://www.pacodeandbulletin.gov/Display/pacode?file=/secure/pacode/data/028/028toc.html&d=reduce

https://apps.health.pa.gov/ddc/

https://www.health.pa.gov/topics/Documents/Laws%20and%20Regulations/DDC_Act.pdf

Wisconsin

Wisconsin Legislature: 450.11(5)

MCL 24.245(3)

RIS-Page 16

https://docs.legis.wisconsin.gov/statutes/statutes/961.pdf

https://docs.legis.wisconsin.gov/code/register/2017/740B/insert/phar7

https://dsps.wi.gov/Pages/Professions/ControlledSubstancesSUA/Default.aspx

https://dsps.wi.gov/Pages/RulesStatutes/ControlledSubstances.aspx

https://docs.legis.wisconsin.gov/code/admin_code/phar/7/iii/43#:~:text=December%202020%20No.-,780.,and%

20compliance%20with%20this%20section.

https://docs.legis.wisconsin.gov/code/admin_code/phar/7.pdf

https://docs.legis.wisconsin.gov/code/admin_code/phar/8

A. How were estimates made, and what were your assumptions? Include internal and external sources, published

reports, information provided by associations or organizations, etc., that demonstrate a need for the proposed

rules.

No estimates or assumptions were made.

Alternative to Regulation

35. Identify any reasonable alternatives to the proposed rules that would achieve the same or similar goals.

There are no other reasonable alternatives to the proposed rules that would achieve the same or similar goals.

A. Please include any statutory amendments that may be necessary to achieve such alternatives.

There are no other reasonable alternatives to the proposed rules that would achieve the same or similar goals.

36. Discuss the feasibility of establishing a regulatory program similar to that proposed in the rules that would

operate through private market-based mechanisms. Please include a discussion of private market-based systems

utilized by other states.

Section 7301 of the Code, MCL 333.7301, permits the Board of Pharmacy (administrator) to promulgate rules

relating to the manufacture, distribution, and prescribing of Schedule 2 controlled substances and the dispensing of

controlled substances in this state. MCL 333.7203 requires the board to promulgate a rule to schedule a substance if

it finds the substance has a potential for abuse. MCL 333.17754a requires the department to establish by rule the

requirements for obtaining a waiver from electronically transmitting all prescriptions, including controlled

substances. Since the rules are permitted and mandated by statute, private market-based systems cannot serve as an

alternative. Each state is responsible for implementing its own laws and rules pertaining to scheduling controlled

substances, licenses, records and dispensing and administration of controlled substance prescriptions. Private market-

based systems are not used for regulating controlled substances. These are state functions, so a regulatory program

independent of state intervention cannot be established.

37. Discuss all significant alternatives the agency considered during rule development and why they were not

incorporated into the rules. This section should include ideas considered both during internal discussions and

discussions with stakeholders, affected parties, or advisory groups.

No alternatives were considered during rule development.

Additional Information

38. As required by MCL 24.245b(1)(c), please describe any instructions regarding the method of complying with

the rules, if applicable.

Electronic transmission of prescriptions and waivers: The rules will explicitly inform prescribers how to apply for a

waiver and when the department will grant a waiver.

The rest of the rules include instructions for compliance.

MCL 24.245(3)