Legislation
Point-of-Care Drug Dispensing
In the State of California

In April 1997, the Legislative Council of California (the "law firm" for the state legislature) published a definitive eighteen- page opinion letter (Federal and Sate Laws) detailing California's legal position on the practice of physician dispensing at the point-of-care. (Click Here to download a PDF with the complete text of this opinion letter.) The following key points summarize the State's interpretation of the law (Section I describes current dispensing regulations, and Section II summarizes current drug repackaging regulations).

I. It is legal for a physician/clinic to repackage and dispense prescription medication to his/her own patients at the point-of-care so long as certain criteria are met. Failure to meet all of these requirements is a violation of State law. The key points to the dispensing process included:

A. Physician office or clinic without a Clinic Pharmacy Permit - Business and Professions Code, Section 4170 (a)
Medications may only be dispensed to the physicians' clinic's own patients; the medication must be necessary for the treatment of the condition for which the physician/clinic is treating the patient; the physician may not keep a pharmacy; the physician/clinic must fulfill all of the labeling requirements imposed on pharmacies; the physicians/clinic may not use a dispensing device unless the device is owned by the physician/clinic; all producers dispensed must be properly labeled and recorded in accordance with paragraph (4); and the physician/clinic must offer the patient a choice between getting the prescription filled at the physician/clinic office or at a pharmacy of the patient's choice. Drugs can only be owned and shipped to a specific physician or Medical Director at the practice. Group practices can share drug inventories so long as appropriate records are maintained.
B. Clinic Pharmacy Permit - Community clinics with a Clinic Pharmacy Permit from the California Board of Pharmacy are authorized to repackage medication that does not comply with the federal cGMP’S. Registered nurses are allowed to dispense drugs from the clinic pharmacy (California Pharmacy Law Section 4051.5). However, ONLY a licensed physician or licensed pharmacist is allowed by law to perform the actual drug-repackaging task. Commercially produced repackage drug products, packaged drug products, packaged and labeled by the FDA licensed drug repackager are approved for dispensing in the clinic in the same manner as those products repackaged by a physician or pharmacist. All clinics with a Pharmacy Permit must utilize the services of a consulting pharmacist to oversee the process and review records, etc. on a routine basis. All drugs are allowed by the clinic (via pharmacy permit) and not by a specific physician.



II. Other Regulations that apply to locations without a pharmacy permit.

A. Repackaging Drugs in a Physician's Office- California Health and Safety Code sections- 110105, 110030, 109970, 111615, 111260, 109930 and 111825
Physicians are licensed to repackage drugs for their own patients. However, physicians who choose to repackage prescription drugs in their office or clinic, must follow the same manufacturing, quality control documentation processes followed by the original drug manufacturer. (Virtually impossible in a physician's office/clinic).
• Section 110105- Establishes Federal FDA current Good Manufacturing Practices as the current Good Manufacturing Practices for the state of California and requires any entity except a licensed pharmacy that repackages prescription medication to follow these regulations in their entirety.
• Section 110030- Establishes the Federal Sherman Food and Drug Cosmetic Act as the regulations applicable to physicians in the state of California and provides the definition of an "adulterated" and "misbranded" drug product.
• Section 109970- Identifies the practice of "repackaging’ as a manufacturing process covered by the Federal law, and State law equally.
• Section 111615- Identifies the licensing requirements for " manufacturing" (repackaging) prescription drugs in the State and specifically ties physicians to Section 111260.
• Section 111260- Identifies any drug as "adulterated" if it is not packaged in full compliance to the federal current Good Manufacturing Practices.
• Section 111825- Make it a misdemeanor/felony to violate the Federal Sherman Food Drug and Cosmetic ACT (dispensing an "ADULTERATED" drug). Establishes fines up to $1,000 per day and other civil penalties for violating these laws.
B. Dispensing Drugs to patients- As stated earlier, every physician in state of California is licensed to dispense prescription drugs to his/her own patients. Certain staff members are permitted to assist in this process.
• Section 2725.1 of the California Business and Professions Code authorizes a registered nurse to dispense properly packaged and labeled drugs upon the order of a licensed physician in conformance with standardized procedures.
• Section 3502.1 of the California Business and Professions Code authorizes a physician's assistant (PA) to dispense a properly packaged and labeled prescription drug to a patient at the direction of and under the supervision of a physician.
The benefits of utilizing DSI’s repackaged drug procedures products and dispensing systems include:
• The DSI system faster, safer, cleaner, easier, and it significantly reduces the likelihood of packaging errors, labeling errors or drug product contamination (legal liability is reduced).
• The DSI system significantly increases patient safety (All products are packaged and labeled under strict FDA control (Packaging/dispensing/labeling errors are virtually zero, versus an increasing error rate in pharmacies that is currently documented at from one to five percent).
• Product liability is carried by DSI not the physician/clinic. If the physician repackages and labels any prescription drug and fails to follow federal cGMP’s in their entirety, the product is automatically" adulterated". It is a felony to dispense an "adulterated" drug product to a patient. If a pharmacist in a clinic makes a packaging or labeling error, the clinic is fully liable for the consequences of that error.
• No open bulk drugs (reduced danger of cross-contamination, drug product mix-ups, loss of drug strength, damage and/or theft).
• No need to inventory more product than is actually needed.
• No need to maintain an inventory of empty bottles/caps/other pharmacy supplies.
• The DSI system is highly space and time efficient. Most prescriptions can be dispensed and completely documented in less than one minute. The DSI Drug Dispensing system includes color-coded product labels, tamper evident induction safety seals on each container, automatic first in first out (FIFO) inventory control, space efficient DEA approved drug storage cabinets and a manual and automated dispensing process that is simple, fast and automatically assures complete compliance to all existing State and Federal prescription drug dispensing regulations.


Physicians in the state of California are licensed to dispense prescription drugs directly to their own patients so long as certain criteria are met. The drugs must be packaged in full compliance to federal good manufacturing practices. Each drug dispensed to a patient must be labeled in full compliance to both federal and state pharmacy regulations. The label must include the patients name; the physicians name; the practice name; address and phone number; the name, strength, form, and quantity of the drug dispensed; any caution statements required for that drug and any other information specifically required for the drug dispensed. Records must also be maintained allowing for full accountability and tracking of every drug dispensed. Drugs must be stored in the physicians’ office in a safe and secure manner.

A clinic has several options available to provide medication to the clinic patients.

A. On site Dispensing- the first step is to obtain a Clinic Pharmacy permit from the California Board of Pharmacy. Completing the necessary application and paying a $400 fee can easily obtain this permit. A specific area within the clinic must be identified as the designated dispensary. Once the permit is obtained, the clinic has two methods to dispense medication.
1. Purchase bulk medication, empty vials and caps; bulk prescription labels, hardware and software to track the dispensing process and to generate prescription labels. Hire a pharmacist to oversee the proper packaging, labeling, and dispensing and drug tracking systems necessary to maintain compliance to California Pharmacy Law. Product liability for any packaging error will fall to the clinic.
Benefits- Convenience to patients, and capture additional revenue for the clinic.
Concerns- Complicated time consuming processes, high potential for drug dispensing errors, full liability to clinic if an error occurs.
2. DSI’s FDA approved prepackaged medication and drug dispensing system to automatically assure complete compliance to all of the above requirements. Any packaging error would automatically fall to Quality Care Pharmaceuticals.
Benefits- Convenience to patients and capture additional revenue for the Clinic, fast, simple, and easy dispensing process that automatically assures complete compliance to all state and federal packaging, labeling, dispensing and drug tracking regulations. All product liability covered by DSI.