Lecture 1

Role of Law

market failures

• public goods- creates incentives for things that are needed (ex. vaccines, orphan drug production)

• externalities- private choices impact public (ex. vaccine refusal, antibiotic overuse)

• natural monopoly- costs to compete too great (ex. generics vs brand efficacy/safety requirements)

• information asymmetry- one party lacks info (ex. patient counseling, HCP licensing, regulated marketing)

proactive vs reactive law

law not black/white, does/should not address all possibilities, use common sense and professional judgement

Sources of Law- Constitution

broadly worded, creates 3 branches that all “make” law

Interstate Commerce clause- gives Congress right to regulate drugs

Executive Appointment clause- President appoints people

Supremacy clause- federal law supreme when there is conflict (difference isn’t necessary conflict)

First Amendment clause- use common sense, for ex. Congress can regulate marketing

Sources of Law- Statues (legislative)

federal level- bicameralism and presentment (ex. Food Drug & Cosmetic Act, Federal Controlled Substances Act)

state level- same as federal, (ex. pharmacy practice acts, state controlled substances acts)

local ordinances- statue-like, simpler, more focused on procedural (ex. zoning, business licenses)

Sources of Law- “Made” by Judiciary

makes common law in absence of statues, also follows precedence

criminal (punishment) vs civil (reparations) disputes (differentiating factor is power to jail you, NCBOP cannot)

trial courts hear decide all facts, appeals and supreme usually focus on if law was applied correctly, Supreme Court picks which cases to hear

Sources of Law- Administrative Law (executive)

created by legislatures but housed in executive branch, executive appointments with legislative oversight and judicial review

agencies = experts that are creatures of statue, must utilize notice-and-comment rulemaking

United Pharmacal v. Missouri Bd. of Pharmacy

issue- veterinary pharmacy didn’t have a permit but this info was in FAQs

result- court ruled that FAQs weren’t a rule because it didn’t follow the process

Heckler v. Chaney

issue- lethal injections used on death row inmates were off label and thus FDA must regulate and seize the drugs

result- Supreme Court ruled that administrative agencies have very broad responsibilities and cannot enforce everything

TLDR- FDA experts (and other agencies) have the right to choose what to focus resources on

Cohen v. Missouri Bd. of Pharmacy

issue- BOP revoked pharmacist license in 1976 on felony charges, in 1988 license was revoked again for another charge and placed on suspension for 5 years, in 1993 while on probation charged again for stealing and BOP extends probation for another year, in 1995 he relapsed again and license was revoked in 1996; BOP had a list of punishments with a max of a 5 year probation period

result- BOP did not have the authority to extend the probation period, could have instead started a new order or gave another punishment

TLDR- agencies are held very closely to their statue power, court in this case interpreted law very strictly

Sunscript Pharmacy Corp. v. N.C. Bd. of Pharmacy

issue- pharmacist made a dispensing error, both the pharmacist and pharmacy were punished by the board, pharmacy sues the board and said they couldn’t take action against the pharmacy, only the pharmacist

result- trial court read the statue strictly and said BOP didn’t have authority, appeals court eventually ruled that yes the BOP did have the authority because what the pharmacy does is basically what pharmacists do

TLDR- agencies are held very closely to their statue power, court in this case acknowledged wording ambiguity but focused on intent of statue

CVS Pharmacy v. N.C. Bd. of Pharmacy

issue- BOP took action against CVS due to pharmacist errors, it was a “reprimand” but that wasn’t technically listed as one of the punishments the BOP could hand out

result- court ruled that BOP could implicitly hand out a lesser punishment than what they were granted to do

TLDR- law doesn’t require max punishment