Introduction to Law and the Legal Process

Role of Law- Market Failures

public goods- needed and socially desirable, law creates incentives (ex. vaccines and orphan drug production)

externalities- private choices have public consequences, when should law step in (ex. vaccine refusal, antibiotic overuse)

natural monopoly- costs of a socially desirable good too great, law can provide incentives (ex. costs of proving safety/efficacy of drugs, generics vs brand)

information asymmetry- when law steps in when one party lacks info (ex. patient counseling, HCP licensing, regulated marketing)

Role of Law- Limits of Legal Regulation

not black and white and certain, does not and should not address every scenario

law is product of humans and needs common sense and professional judgement in interpretation

Sources of Law- Constitution

short and broadly worded, creates executive, legislative, and judicial branch (all “make” law), federal government can only do what is written, can also be restricted in Bill of Rights

Interstate Commerce clause- gives Congress right to regulate drugs (marijuana case)

Executive Appointment clause- President appoints people

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

First Amendment clause- how can Congress regulate marketing?

Sources of Law- Statues

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 and not on the practice of pharmacy (ex. zoning, business licenses)

Sources of Law- “Made” by Judiciary

makes common law for legal principles in absence of statues when resolving disputes

“Stare Decisis” = follow precedence

criminal (punishment) vs civil (reparations) disputes (NCBOP has criminal authority but can only remove license not jail people so more like a civil dispute)

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

Sources of Law- Administrative Law

created by legislatures but housed in executive branch

agencies = experts that are creatures of statue, 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 drug uses and thus FDA must regulate and seize the drugs

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

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

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