Title 201 | Chapter 002 | Regulation 470
SUPERSEDED
This document is no longer current.
BOARD AND COMMISSIONS
Board of Pharmacy
(New Administrative Regulation)
201 KAR 2:470.Change of ownership.
Section 1.
Change of entity ownership requiring a new license or permit means:(1)
Partnership. In the case of a partnership, the removal, addition, or substitution of a partner.(2)
Unincorporated sole proprietorship. In the case of an unincorporated sole proprietorship, the transfer of title and property to another party.(3)
Corporation.(a)
In the case of a corporation, the merger of the licensed corporation into another corporation or the consolidation of two (2) or more corporations, resulting in the creation of a new corporation.(b)
Transfer of corporate stock or the merger of another corporation into the licensed corporation does not constitute change of entity ownership; however, notification pursuant to Section 2 of this administrative regulation shall be provided within thirty (30) days of the transaction occurring.(4)
Limited liability company (LLC).(a)
In the case of an LLC, the merger of the licensed LLC into another LLC or the consolidation of two (2) or more LLCs, resulting in the creation of a new LLC.(b)
Transfer of company stock or the merger of another LLC into the licensed LLC does not constitute change of ownership; however, notification pursuant to Section 2 of this administrative regulation shall be provided within thirty (30) days of the transaction occurring.Section 2.
Procedure.(1)
Written notice of the following shall be provided to the board no more than thirty (30) calendar days after the transaction occurs:(a)
A transfer of stock of greater than ten (10) percent in a non-publicly traded corporation which is the direct owner of an entity;(b)
A transfer of membership interest in a limited liability company which is the direct owner of an entity; and(c)
A change of corporate officer.(2)
Written notification shall include providing a copy of the purchase agreement in the case of a stock or membership interest transfer. Purchase amounts and proprietary information may be redacted.Section 3.
Responsibility. A permit or license which has been served with a complaint and notice of hearing pursuant to KRS Chapter 13B for a pending disciplinary proceeding with the Board of Pharmacy may not change ownership until the issuance of a final order by the board or upon the agreement of all parties to the terms of a settlement.CHRISTOPHER HARLOW, Pharm.D., Executive Director
APPROVED BY AGENCY: June 4, 2024
FILED WITH LRC: June 4, 2024 at 11:15 a.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on August 28, 2024, at 10:00 a.m. Eastern Time via zoom teleconference. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through August 31, 2024. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.
CONTACT PERSON: Christopher Harlow, Executive Director, Kentucky Board of Pharmacy, 125 Holmes Street, Suite 300, State Office Building Annex, Frankfort, Kentucky 40601, phone (502) 564-7910, fax (502) 696-3806, email Christopher.harlow@ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Christopher Harlow
(1) Provide a brief summary of:
(a) What this administrative regulation does:
This regulation provides rules around changes of ownership when a facility regulated by the Board of Pharmacy changes owners.
(b) The necessity of this administrative regulation:
To codify the process the board already utilizes to ensure regulated parties know when a change of ownership application is needed and when simple notice is needed.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
KRS 315.191(1)(a) authorizes the Board of Pharmacy to make rules to govern any matter related to pharmacies.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
315.191(1) authorizes the board to promulgate administrative regulations to regulate pharmacists, pharmacies, wholesalers and manufacturers. KRS 315.035 discusses changes of ownership of a pharmacy and requires notice to be provided no fewer than five days before the transaction occurs and authorizes a buyer to operate under a seller’s permit pending the application. Due to the nature of business structures, it is not clear when a change of ownership of a regulated entity is considered to occur, and therefore this regulation provides clarity for making those determinations.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
n/a
(b) The necessity of the amendment to this administrative regulation:
n/a
(c) How the amendment conforms to the content of the authorizing statutes:
n/a
(d) How the amendment will assist in the effective administration of the statutes:
n/a
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
Pharmacies, wholesalers, manufacturers, third party logistics providers and outsourcing facilities are affected by this regulation.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
The Board is not changing the process we currently utilize, we are simply placing it in rule so that it’s easier for regulated parties to find it and know what to do should an ownership change arise.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
nothing.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
The entities will have greater clarity about what is required to provide the board if they are going through an ownership change. (5) Provide an estimate of how much it will cost to implement this administrative regulation:
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
There is no cost.
(b) On a continuing basis:
There is no cost.
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
Board revenues from pre-existing fees provide the funding to enforce the regulation.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
No fee increase will be needed.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
No fees are established directly or indirectly by this regulation.
(9) TIERING: Is tiering applied?
Tiering is not applied because the regulation is applicable to all pharmacists and pharmacies equally.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 315.191(1)(a).
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
The Kentucky Board of Pharmacy
(a) Estimate the following for the first year:
Expenditures:
none.
Revenues:
none.
Cost Savings:
none.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no expenditures or cost savings.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None, only the Kentucky Board of Pharmacy is impacted.
(a) Estimate the following for the first year:
Expenditures:
none.
Revenues:
none.
Cost Savings:
none.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
This regulation does not create any expenditures, revenues or cost savings.
(4) Identify additional regulated entities not listed in questions (2) or (3):
none.
(a) Estimate the following for the first year:
Expenditures:
none.
Revenues:
none.
Cost Savings:
none.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
This regulation does not create any expenditures, revenues or cost savings.
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
There is no fiscal impact from this regulation.
(b) Methodology and resources used to determine the fiscal impact:
There are no fees or costs associated with this regulation.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This administrative regulation will not have an overall negative or adverse major economic impact to the entities identified.
(b) The methodology and resources used to reach this conclusion:
There are no costs, expenditures or revenues from this regulation.
BOARD AND COMMISSIONS
Board of Pharmacy
(New Administrative Regulation)
201 KAR 2:470.Change of ownership.
Section 1.
Change of entity ownership requiring a new license or permit means:(1)
Partnership. In the case of a partnership, the removal, addition, or substitution of a partner.(2)
Unincorporated sole proprietorship. In the case of an unincorporated sole proprietorship, the transfer of title and property to another party.(3)
Corporation.(a)
In the case of a corporation, the merger of the licensed corporation into another corporation or the consolidation of two (2) or more corporations, resulting in the creation of a new corporation.(b)
Transfer of corporate stock or the merger of another corporation into the licensed corporation does not constitute change of entity ownership; however, notification pursuant to Section 2 of this administrative regulation shall be provided within thirty (30) days of the transaction occurring.(4)
Limited liability company (LLC).(a)
In the case of an LLC, the merger of the licensed LLC into another LLC or the consolidation of two (2) or more LLCs, resulting in the creation of a new LLC.(b)
Transfer of company stock or the merger of another LLC into the licensed LLC does not constitute change of ownership; however, notification pursuant to Section 2 of this administrative regulation shall be provided within thirty (30) days of the transaction occurring.Section 2.
Procedure.(1)
Written notice of the following shall be provided to the board no more than thirty (30) calendar days after the transaction occurs:(a)
A transfer of stock of greater than ten (10) percent in a non-publicly traded corporation which is the direct owner of an entity;(b)
A transfer of membership interest in a limited liability company which is the direct owner of an entity; and(c)
A change of corporate officer.(2)
Written notification shall include providing a copy of the purchase agreement in the case of a stock or membership interest transfer. Purchase amounts and proprietary information may be redacted.Section 3.
Responsibility. A permit or license which has been served with a complaint and notice of hearing pursuant to KRS Chapter 13B for a pending disciplinary proceeding with the Board of Pharmacy may not change ownership until the issuance of a final order by the board or upon the agreement of all parties to the terms of a settlement.CHRISTOPHER HARLOW, Pharm.D., Executive Director
APPROVED BY AGENCY: June 4, 2024
FILED WITH LRC: June 4, 2024 at 11:15 a.m.
PUBLIC HEARING AND COMMENT PERIOD: A public hearing on this administrative regulation shall be held on August 28, 2024, at 10:00 a.m. Eastern Time via zoom teleconference. Individuals interested in being heard at this hearing shall notify this agency in writing by five workdays prior to the hearing, of their intent to attend. If no notification of intent to attend the hearing is received by that date, the hearing may be canceled. This hearing is open to the public. Any person who wishes to be heard will be given an opportunity to comment on the proposed administrative regulation. A transcript of the public hearing will not be made unless a written request for a transcript is made. If you do not wish to be heard at the public hearing, you may submit written comments on the proposed administrative regulation. Written comments shall be accepted through August 31, 2024. Send written notification of intent to be heard at the public hearing or written comments on the proposed administrative regulation to the contact person.
CONTACT PERSON: Christopher Harlow, Executive Director, Kentucky Board of Pharmacy, 125 Holmes Street, Suite 300, State Office Building Annex, Frankfort, Kentucky 40601, phone (502) 564-7910, fax (502) 696-3806, email Christopher.harlow@ky.gov.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact Person:
Christopher Harlow
(1) Provide a brief summary of:
(a) What this administrative regulation does:
This regulation provides rules around changes of ownership when a facility regulated by the Board of Pharmacy changes owners.
(b) The necessity of this administrative regulation:
To codify the process the board already utilizes to ensure regulated parties know when a change of ownership application is needed and when simple notice is needed.
(c) How this administrative regulation conforms to the content of the authorizing statutes:
KRS 315.191(1)(a) authorizes the Board of Pharmacy to make rules to govern any matter related to pharmacies.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes:
315.191(1) authorizes the board to promulgate administrative regulations to regulate pharmacists, pharmacies, wholesalers and manufacturers. KRS 315.035 discusses changes of ownership of a pharmacy and requires notice to be provided no fewer than five days before the transaction occurs and authorizes a buyer to operate under a seller’s permit pending the application. Due to the nature of business structures, it is not clear when a change of ownership of a regulated entity is considered to occur, and therefore this regulation provides clarity for making those determinations.
(2) If this is an amendment to an existing administrative regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation:
n/a
(b) The necessity of the amendment to this administrative regulation:
n/a
(c) How the amendment conforms to the content of the authorizing statutes:
n/a
(d) How the amendment will assist in the effective administration of the statutes:
n/a
(3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation:
Pharmacies, wholesalers, manufacturers, third party logistics providers and outsourcing facilities are affected by this regulation.
(4) Provide an analysis of how the entities identified in question (3) will be impacted by either the implementation of this administrative regulation, if new, or by the change, if it is an amendment, including:
(a) List the actions that each of the regulated entities identified in question (3) will have to take to comply with this administrative regulation or amendment:
The Board is not changing the process we currently utilize, we are simply placing it in rule so that it’s easier for regulated parties to find it and know what to do should an ownership change arise.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the entities identified in question (3):
nothing.
(c) As a result of compliance, what benefits will accrue to the entities identified in question (3):
The entities will have greater clarity about what is required to provide the board if they are going through an ownership change. (5) Provide an estimate of how much it will cost to implement this administrative regulation:
(5) Provide an estimate of how much it will cost the administrative body to implement this administrative regulation:
(a) Initially:
There is no cost.
(b) On a continuing basis:
There is no cost.
(6) What is the source of the funding to be used for the implementation and enforcement of this administrative regulation:
Board revenues from pre-existing fees provide the funding to enforce the regulation.
(7) Provide an assessment of whether an increase in fees or funding will be necessary to implement this administrative regulation, if new, or by the change if it is an amendment:
No fee increase will be needed.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees:
No fees are established directly or indirectly by this regulation.
(9) TIERING: Is tiering applied?
Tiering is not applied because the regulation is applicable to all pharmacists and pharmacies equally.
FISCAL IMPACT STATEMENT
(1) Identify each state statute, federal statute, or federal regulation that requires or authorizes the action taken by the administrative regulation.
KRS 315.191(1)(a).
(2) Identify the promulgating agency and any other affected state units, parts, or divisions:
The Kentucky Board of Pharmacy
(a) Estimate the following for the first year:
Expenditures:
none.
Revenues:
none.
Cost Savings:
none.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
There will be no expenditures or cost savings.
(3) Identify affected local entities (for example: cities, counties, fire departments, school districts):
None, only the Kentucky Board of Pharmacy is impacted.
(a) Estimate the following for the first year:
Expenditures:
none.
Revenues:
none.
Cost Savings:
none.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
This regulation does not create any expenditures, revenues or cost savings.
(4) Identify additional regulated entities not listed in questions (2) or (3):
none.
(a) Estimate the following for the first year:
Expenditures:
none.
Revenues:
none.
Cost Savings:
none.
(b) How will expenditures, revenues, or cost savings differ in subsequent years?
This regulation does not create any expenditures, revenues or cost savings.
(5) Provide a narrative to explain the:
(a) Fiscal impact of this administrative regulation:
There is no fiscal impact from this regulation.
(b) Methodology and resources used to determine the fiscal impact:
There are no fees or costs associated with this regulation.
(6) Explain:
(a) Whether this administrative regulation will have an overall negative or adverse major economic impact to the entities identified in questions (2) - (4). ($500,000 or more, in aggregate)
This administrative regulation will not have an overall negative or adverse major economic impact to the entities identified.
(b) The methodology and resources used to reach this conclusion:
There are no costs, expenditures or revenues from this regulation.