Board moves to start rulemaking to revise pharmacy fees after DCA audit

The California State Board of Pharmacy voted on March 18 to begin rulemaking to update its fee schedule (California Code of Regulations, title 16, section 17.49) after a Department of Consumer Affairs financial review found the board’s fund is running a structural deficit.

Matt Nishamini, a senior fiscal adviser at DCA, told the board the agency used a driver‑based cost model to map direct and indirect workload costs and forecasted unanticipated costs of about $4,250,000 beginning in fiscal 2026–27. He said proposed fee adjustments would produce roughly $6.25 million in additional annual revenue — including about $4.87 million from renewal fees — which would restore reserve months and cover projected increases in administrative and personal‑services costs.

“This proposal will provide the board with the necessary resources to meet projected future costs and unanticipated costs,” Nishamini said, summarizing the analysis and the methodology used to compute per‑application workload minutes and indirect cost allocations.

Board members pressed DCA on what the analysis did and did not include. Multiple members asked whether the study modeled how higher fees might change the number of licensees (price elasticity) or how California compares to other states. DCA staff said the model did not estimate licensee reactions or cross‑state comparisons; instead it aligned the board’s current licensee population with projected expenditures. Members also asked about process efficiencies and possible IT upgrades; staff confirmed the $4.25 million unanticipated‑cost line was intended to help cover such future needs but said dedicated IT projects were not specifically costed in the study.

Public commenters and some board members raised concerns that large fee increases could disproportionately affect small or nonresident outsourcing pharmacies and might worsen pharmacy closures or “pharmacy deserts,” particularly in rural areas. Several commenters and board members urged monitoring of license counts and stakeholder outreach during the rulemaking process. Petitioner and patient advocates also warned about consequences for patients who rely on scarce compounding or nonresident suppliers for rare‑disease medications.

President Sang o moved to initiate rulemaking, direct staff to submit the text to the Department of Consumer Affairs, and authorize the executive officer to proceed with all steps needed to pursue adoption if no adverse comments are received; Jesse Crowley seconded the motion. After public comment the board voted to initiate rulemaking and the motion passed.

The board’s action starts a formal regulatory process. Stakeholders will be able to comment during the rulemaking periods and the board indicated it will review financial and access impacts through that process. If approved, any changes would be published in the regulatory filing and would be subject to the usual timelines for regulatory adoption.