Could a Kentucky mail-order pharmacy fill a prescription from a doctor licensed only in another state?

Plain-English summary

A company considering a Kentucky mail-order pharmacy expected to receive prescriptions from practitioners around the country. The Cabinet for Economic Development asked whether Kentucky-licensed pharmacists could fill prescriptions written by practitioners licensed in their home states but not in Kentucky. The Attorney General concluded in 1999 that they could, including under the controlled-substances framework examined in the opinion.

The opinion read Kentucky's practitioner-licensing restriction as conflicting with the federal Controlled Substances Act when applied to out-of-state practitioners licensed by their home state or registered under the federal law. It also concluded that applying the restriction that way would burden interstate commerce more than Kentucky's stated health and safety interests justified. The opinion acknowledged the state's interest in regulating drugs and licensed practitioners; its conclusion was about the additional Kentucky-license requirement for the out-of-state prescriber.

Currency note

This opinion was issued in 1999. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did an out-of-state doctor need a Kentucky license for a Kentucky pharmacy to fill the doctor's prescription under this opinion? A: The Attorney General said no if the practitioner was licensed in the home state or under the federal Controlled Substances Act. It concluded that Kentucky could not apply the additional in-state licensing requirement in that situation.

Q: Did the opinion cover mail-order pharmacies?
A: Yes. A proposed Kentucky facility receiving and filling prescriptions by mail prompted the request, and the opinion addressed prescriptions written by practitioners in other states.

Q: Was the Attorney General saying Kentucky had no role in regulating controlled substances? A: No. The opinion recognized Kentucky's health and safety interests and authority over its licensed pharmacists. It rejected the specific restriction that would keep Kentucky pharmacies from filling prescriptions from otherwise licensed out-of-state practitioners.

Background and statutory framework

The opinion examined Kentucky statutes in Chapters 217, 218A and 315, with particular attention to Chapter 218A's definition of a practitioner. It compared that definition with federal registration under the Controlled Substances Act. Its preemption analysis asked whether the Kentucky requirement obstructed the federal scheme for interstate prescriptions.

The opinion also applied Commerce Clause reasoning. It accepted that Kentucky's law regulated in-state and out-of-state practitioners in the same words, then looked at its practical effect on interstate prescriptions. It identified federal registration and reciprocal agreements as less burdensome ways to serve the state's stated interests.

Citations and references

Statutes: KRS 217, 218A and 315; Federal Controlled Substances Act.

Cases: Hines v. Davidowitz, 312 U.S. 52 (1941); Pike v. Bruce Church, Inc., 397 U.S. 137 (1970).

Source

• Landing page: https://kdla.access.preservica.com/uncategorized/IO_284a6490-8e99-4505-b55f-c1d4d2a387b5/
• Original PDF: https://kdla.access.preservica.com/download/file/IO_284a6490-8e99-4505-b55f-c1d4d2a387b5

Original opinion text

OAG 99-1
January 12, 1999
Subject:

Authority of Kentucky pharmacies and pharmacists
to fill prescriptions written by out-of-state practitioners licensed in their home state but not licensed in Kentucky.

Requested by:

Robin Fields Kinney, General Counsel
Cabinet for Economic Development

Written by:

Jennifer Carrico, Assistant Attorney General
Janet Graham, Assistant Attorney General

Syllabus:

Kentucky pharmacies and pharmacists may fill prescriptions written by practitioners licensed in their home state, in Kentucky, or according to the Federal Controlled Substances Act.

Statutes construed:

KRS 217, 218A and 315

Opinion of the Attorney General
I.

Introduction

The Attorney General’s opinion is requested on whether Kentucky Revised Statutes, Chapters 217, 218A or 315 prohibit pharmacies or pharmacists licensed in Kentucky from filling prescriptions written by out-of-state practitioners who are not licensed in Kentucky, but duly licensed in their home state. Such a prohibition serves Kentucky’s legitimate interest in regulating controlled substances for the health, safety and welfare of its citizens. However, this prohibition obstructs uniform federal regulation of commerce in controlled sub-

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stances, and excessively burdens interstate commerce. For these reasons, Kentucky pharmacies and pharmacists may fill prescriptions written by practitioners licensed in Kentucky, their home state, or under the Federal Controlled Substances Act. The Cabinet for Economic Development requested this opinion upon receiving an inquiry from an out-of-state corporation regarding the location of a pharmacy facility in Kentucky. The corporation is considering a substantial capital investment and would employ approximately six hundred to eight hundred people. The facility would receive and fill prescriptions by mail. Kentucky licensed pharmacists employed by the facility would fill the prescriptions and return them to the patients. The facility would process and distribute a substantial volume of prescriptions including prescriptions written by medical practitioners from every state in the nation. In other words, the mail order facility necessarily would fill prescriptions written by practitioners who are licensed to practice in other states, but who are not licensed in Kentucky. This type of facility is governed by Chapter 218A of the Kentucky statutes. Chapter 218A regulates commerce in controlled substances and therefore determines a pharmacy’s authority to fill prescriptions. 1 KY. REV. STAT. ANN. Ch. 218A (Baldwin 1992). This chapter provides that “[e]xcept when dispensed directly by a practitioner to an ultimate user, no controlled substance…may be dispensed without the written prescription of a practitioner.” Id. at 218A.180(1),(2) (emphasis added). A practitioner is defined for the purposes of Chapter 218A as a “physician…or other person licensed, registered, or otherwise permitted to distribute, dispense…or administer a controlled substance in the course of professional practice in this state.” Id. at § 218A.010(19) (emphasis added).

Chapter 217, Foods, Drugs and Poisons, governs quality standards and labeling requirements for food, drugs, cosmetics and poisons. KY. REV. STAT. ANN. § 217.175 (Baldwin 1992). This Chapter is relevant to the extent that it prohibits the sale of misbranded, mislabeled or adulterated drugs. Chapter 315, Pharmacies and Pharmacists, establishes licensing requirements for pharmacists, and authorizes the Kentucky Board of Pharmacy to regulate the practice of pharmacy in the Commonwealth. KY. REV. STAT. ANN. § 315.191 (Baldwin 1997). Both Chapters define a “practitioner” in general as a person licensed under the professional licensing laws of Kentucky. KY. REV. STAT. ANN. § 217.015(23) (Baldwin 1992). 1

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The issue is whether Chapter 218A prohibits Kentucky pharmacies and pharmacists from filling prescriptions written by practitioners licensed in their home state but not licensed in Kentucky. The Attorney General concludes that Chapter 218A permits Kentucky pharmacies and pharmacists to fill prescriptions written by practitioners licensed in Kentucky, their home state, or under the Federal Controlled Substances Act. Although an argument may be made to the contrary, the Supremacy Clause and Commerce Clause mandate this conclusion. II.

Preemption

The issues implicated by the mail-order pharmaceutical facility
require examination of both state and federal law. Sections (1) and (2)
of Chapter 218A.180 almost are identical to provisions in the Federal
Controlled Substances Act that regulate both intrastate and interstate
commerce in controlled substances. FED. CONT. SUB. ACT, 21 U.S.C.A. §
801 (1998). The registration standards in this Act require information
from practitioners such as their primary place of business, effective
management of controlled substances, prior conviction record, compliance with state and local law, and past experience. 21 U.S.C.A. § 823, 21 C.F.R. § 1301. In contrast, Kentucky’s licensing requirements are more complex. In addition to fulfilling similar informational requirements, an out-of-state practitioner must complete Kentucky’s licensing examination if the practitioner’s license does not meet Kentucky’s standards. 201 KY. ADMIN. REGS. 2:030 (1998). The practitioner also must successfully complete an examination in jurisprudence, and an extensive application process. Id. The question under the Supremacy Clause is whether federal registration requirements preempt state licensing requirements for out-of-state practitioners. Congress’ intent to preempt state statutes may be found in its express language, or inferred from the comprehensive scope of federal law. Hillsborough County, Fla. v. Automated Medical Laboratories, Inc., 471 U.S. 707, 105 S. Ct. 2371 (1985). The Federal Controlled Substances Act states that it will not preempt state law “unless there is a positive conflict between that provision of this title and that State law so that the two cannot consistently stand together.” 21 U.S.C.A. §

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903. Therefore, Chapter 218A is preempted to the extent it “conflicts”
     with the Federal Controlled Substances Act. A conflict occurs when a
     state law stands as an obstacle to the accomplishment of a federal
     goal. Hines v. Davidowitz, 312 U.S. 52, 61 S. Ct. 399 (1941). A conflict
     also may occur when the state statute disrupts a system of national
     uniformity or, in governing the same subject matter for the same purpose, subjects the object of regulation to varying standards. Fidelity Federal Sav. and Loan Ass’n. v. de la Cuesta, 458 U.S. 141, 102 S. Ct. 3014 (1982); Huron Portland Cement, Co. v. City of Detroit, Mich., 362 U.S. 440, 80 S. Ct. 813 (1960). Congress promulgated the Federal Controlled Substances Act to regulate commerce in controlled substances uniformly nationwide. 21 U.S.C.A. § 801. The Act accomplishes this purpose by authorizing registered practitioners to write prescriptions in interstate commerce. Id. Preventing Kentucky pharmacies from filling prescriptions written by out-of-state practitioners prevents interstate pharmaceutical transactions and subjects the nation’s practitioners to Kentucky’s complex licensing requirements. Such a prohibition is preempted because it obstructs uniform regulation of interstate pharmaceutical transactions contemplated by the Act. See Huron, 362 U.S. at 444 (a state may not impose a burden which materially affects interstate commerce in an area where uniformity of regulation is necessary). Even if state statutes merely add to federal registration requirements, they are nevertheless preempted to the extent that they obstruct the federal scheme. Hines v. Davidowitz, 312 U.S. 52, 61 S. Ct. 399 (1941) (“Our primary purpose is to determine whether, under the circumstances of this particular case, Pennsylvania’s law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of congress”). Although Kentucky’s licensing requirement seems to add to federal registration standards, the Commonwealth’s unique licensing requirements operate to obstruct the uniform federal scheme. In this context, Kentucky’s statute is preempted to the extent it applies to practitioners licensed by their home state or under the Federal Controlled Substances Act. This principle provides the distinction between Chapter 218A and the ordinances challenged in Hillsborough County, Fla. v. Automated Medical Laboratories, Inc., 471 U.S. 707, 105 S. Ct. 2371 (1985). In Hillsborough, the court found that

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state ordinances merely added to federal statutory requirements. Id.
However, unlike Kentucky’s licensing requirements, such ordinances
did not obstruct the purpose of the federal provision. Id. at 2379.
Chapter 218A also differs from the Oregon statute discussed in
Nichols v. Board of Pharmacy, 657 P.2d 216 (Or. Ct. App. 1983). In
Nichols, the court upheld Oregon statutes authorizing registered pharmacists to dispense controlled substances only upon a prescription written by a practitioner licensed in Oregon. Id. The court found that the state statute was not preempted because it was consistent with the Federal Controlled Substances Act. Id. This decision is not instructive regarding the present question because the Oregon statutory framework differed significantly from Chapter 218A. Requiring out-of-state practitioners to be licensed in Kentucky before their prescriptions may be filled there prevents uniform federal regulation of interstate commerce in controlled substances, and subjects practitioners to varying standards. Therefore, Kentucky’s licensing requirement is preempted by the Federal Controlled Substances Act to the extent it applies to practitioners licensed by another state or registered under the Act. However, in the event that Chapter 218A is not preempted by federal law, prohibiting Kentucky pharmacies and pharmacists from filling prescriptions written by out-of-state practitioners who are not licensed in the Commonwealth excessively burdens interstate commerce. III.

Interstate Commerce

Chapter 218A is analyzed under the Commerce Clause in a twotiered approach. Brown-Forman Distillers Corp. v. New York State Liquor Authority, 476 U.S. 573, 106 S. Ct. 2080 (1986). When a state statute regulates or discriminates against interstate commerce on its face or in effect, the statute is virtually per se invalid. See City of Philadelphia v. New Jersey, 437 U.S. 617, 98 S. Ct. 2531 (1978); Edgar v. MITE Corp., 457 U.S. 624, 102 S. Ct. 2629 (1982). When a statute only indirectly affects interstate commerce and regulates evenhandedly, courts examine whether the state’s interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits. Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S. Ct. 844 (1970); Huron

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Cement Co. v. City of Detroit, Mich., 362 U.S. 440, 80 S. Ct. 813
(1960).
Chapter 218A regulates evenhandedly, requiring both in-state
and out-of-state licensed practitioners to be licensed in the Commonwealth. KY. REV. STAT. ANN. § 218A.180(1) (Baldwin 1992). However, since it impacts interstate commerce, Chapter 218A is valid only if it furthers a legitimate local interest, and its benefits exceed the burden imposed on interstate commerce. The principal focus when analyzing the burden on interstate commerce must be the practical operation of the statute “since validity of state laws must be determined chiefly in terms of their probable effect.” Lewis v. B.T. Inv. Managers, Inc., 447 U.S. 27, 100 S. Ct. 2009 (1980). In addition, the extent of the burden that will be tolerated depends on the nature of the local interest involved, and whether it may be promoted as well by other means with lesser impact on interstate commerce. Pike, 397 U.S. at 142; Great Atlantic & Pac. Tea Co., Inc. v. Cottrell, 424 U.S. 366, 96 S. Ct. 923 (1976). Kentucky’s legitimate local interests in the area of the distribution of controlled substances include regulating those who dispense controlled substances within its borders, the health and safety of its citizens, and the qualifications and conduct of its licensed practitioners. These interests are presumed valid since they concern public health, safety and welfare. Bibb v. Navajo Freight Lines, Inc., 79 S. Ct. 962, 359 U.S. 520 (1959); Huron Cement Co. v. City of Detroit, Mich., 362 U.S. 440, 80 S. Ct. 813 (1960). The benefits of regulating in these areas include managing commerce in controlled substances in Kentucky, and protecting citizens from fraudulent or incompetent prescriptions. However, the burden Chapter 218A places on interstate commerce far exceeds these benefits. Requiring out-of-state practitioners to be licensed in Kentucky places an enormous burden on practitioners, pharmacies, and consumers. To obtain a license in Kentucky, practitioners must fulfill cumbersome licensing requirements that may include practical and jurisprudential examinations. The practical operation of this statute discourages practitioners from becoming licensed in Kentucky. Tyson Foods, Inc. v. McReynolds, 700 F.Supp. 906, 910-11

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(M.D. Tenn. 1988) (statutes that adversely affect interstate commerce
by subjecting activities to inconsistent regulations violate the Commerce Clause); TLX Acquisition Corp. v. Telex Corp., 679 F.Supp.1022 (W.D. Okla. 1978) (constitution limits state’s ability to impose its chosen theory on other states and their citizens and corporations). In addition to discouraging practitioners from obtaining a license in Kentucky, the statute acts as an economic embargo on commerce between Kentucky and other states. In other words, the requirement prevents Kentucky pharmacies from filling prescriptions written by practitioners in every other state in the nation. Conversely, customers will be deprived of the service of Kentucky pharmacies if they have prescriptions written by out-of-state practitioners. In fact, the statute poses a serious threat to the health and safety of patients who cannot travel to another state to fill a prescription because Kentucky businesses are prohibited from serving them. See e.g. Bibb, 79 S. Ct. at 966-67; Tyson Foods, Inc., 700 F.Supp. at 911-912 (statute requiring offeror in take-over to register in state violates due process for failing to meet stated purpose of protecting shareholders). Most importantly, this burden on interstate commerce hobbles the competitive market in controlled substances in Kentucky. If Kentucky pharmacies cannot obtain business from other states, they will not locate in the Commonwealth. The lack of competition in this market will encourage artificially high prices for pharmaceuticals in Kentucky. Cf. Tyson Foods, Inc., 700 F.Supp. at 911 (considering impact of state regulation on highly integrated national economy). This significant burden on interstate commerce cannot be tolerated if reasonable alternatives exist that preserve the legitimate local interest. Great Atlantic & Pac. Tea Co., Inc. v. Cottrell, 424 U.S. 366, 96 S. Ct. 923 (1976). The interests served by the licensing requirement may be met through less burdensome alternatives. The registration system under the Federal Controlled Substances Act provides a reasonable alternative that serves Kentucky’s interest in regulating intrastate commerce in controlled substances and ensuring the health, safety and welfare of its citizens. In addition, Kentucky is authorized to enter into mutually beneficial reciprocal agreements with other states that permit practitioners licensed in their home state to write

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prescriptions in participating states. KY. REV. STAT. ANN. § 315.210
(Baldwin 1997).
The question in this case is distinguished from the issue addressed in Budget Marketing, Inc. v. Com. ex rel. Stephens, 587 S.W.2d 245 (Ky. 1979). In Stephens, the Kentucky Supreme Court held that the legislature could require nonresidents to register in the Commonwealth if they solicited magazine subscriptions from Kentucky residents. Id. at 249. The court reached this holding on the basis of a jurisdictional analysis, limiting the holding to solicitations of long-term subscriptions which amounted to a continuing course of conduct in Kentucky by the solicitor. Id. Thus, the decision was made on the basis of a sufficient nexus between the solicitor and the state, with no meaningful discussion of restrictions on state power imposed by the Commerce Clause. The state may have jurisdiction over persons and conduct under principles of due process that may not be justified as an act of regulation under the Commerce Clause. Therefore, Stephens is not dispositive of this issue.2 Although Kentucky case law is limited in the area of analysis of public health and safety measures under the Commerce Clause, other states have reached the same conclusion. 3 For example, in State v. Rasmussen, 213 N.W.2d 661 (Iowa 1973), the court found that requiring out-of-state physicians to register in order to have their prescriptions filled by Iowa pharmacies was an impermissible burden on interstate commerce. Similarly, in Ferndale Laboratories, Inc. v. Cavendish, 1994 WL 749469 (N.D. Ohio 1994), the court held that a state statute requiring out-of-state wholesalers to register in states where they ship pharmaceuticals violated the Commerce Clause. The court reasoned on the basis of an Ohio Attorney General’s Opinion that “requiring a retailer to obtain licenses from the various states into Similarly, Kentucky Attorney General Opinion 92-28 provides no guidance in this analysis. The question posed in that opinion was whether a Kentucky pharmacy may fill a prescription written by a Tennessee physician if such prescription violates Tennessee’s Medical Board Regulations. Id. The Attorney General’s answer in the negative is not relevant to the instant issue since a physician in violation of state regulations would not be permitted to write prescriptions under the Federal Controlled Substances Act or state law generally. Id. 2

Kentucky case law regarding the Commerce Clause primarily involves taxation of interstate commerce, requiring special analysis not relevant when analyzing public health and safety measures. Carpenter v. Commonwealth, 831 S.W.2d 188 (Ky.Ct.App. 1992). 3

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which it ships its goods will almost certainly impede its interstate business.” Id. at *5. Finally, in National Steel Corp. v. Long, 718 F.Supp. 622 (W.D. Mich. 1989), the court recognized the possibility that a registration requirement could impose an unreasonable burden on interstate commerce. Applying Kentucky’s licensing requirement to licensed out-ofstate practitioners places a tremendous burden on interstate commerce by imposing an economic embargo on pharmaceutical transactions. This burden is too great in light of equally viable alternatives that regulate pharmaceutical commerce and protect the health, safety and welfare of Kentuckians. Kentucky’s interest in regulating commerce in controlled substances fails to support the licensing requirement as it applies to licensed out-of-state practitioners and practitioners registered under the Federal Controlled Substances Act.

IV.

Conclusion

Kentucky has a legitimate interest in protecting the health and
safety of its citizens and regulating traffic in controlled substances in
the Commonwealth. However, Kentucky’s licensing requirement imposes an economic embargo on commerce between Kentucky and other states when applied to out-of-state licensed practitioners. In addition, the licensing requirement thwarts uniform regulation of commerce in controlled substances under federal law. For these reasons, the licensing requirement violates the Commerce Clause and is preempted by the Federal Controlled Substances Act. Therefore, Kentucky pharmacies and pharmacists may fill prescriptions written by practitioners licensed in Kentucky, their home state, or under the Federal Controlled Substances Act. Albert B. Chandler, III Attorney General

Jennifer Carrico
Assistant Attorney General

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Janet Graham
Assistant Attorney General