Hospital Pharmacy Associated Clinic FAQs

What is the difference between a health care entity (HCE) and a hospital pharmacy associated clinic (HPAC)?

A health care entity or HCE is an organization that provides health care services in a setting that is not otherwise licensed by the state to purchase and possess legend drugs. A health care entity includes but is not limited to any of the following: outpatient surgery centers, cardiac care centers, residential treatment facilities or kidney dialysis centers.

A hospital pharmacy associated clinic or HPAC is an individual practitioner's office or multi-practitioner clinic owned, operated, or under common control of a parent hospital or health system, where the physical address of the office or clinic is identified on a hospital pharmacy license.

	Hospital Pharmacy Associated Clinic (HPAC)	Health care entity (HCE)
Purpose	Allows a parent hospital to transfer controlled and non-controlled substances to a clinic that is a division, subsidiary, affiliated company, or related company under common ownership and control of the corporate entity. The hospital may do so without a wholesaler's license. See 70.41.490 and WAC 246-873A-050(2)	Allows the facility (HCE) to possess drugs on the premises and: Purchase drugs from a licensed wholesaler Perform an intracompany sell/transfer from a pharmacy who is under common ownership and control of a corporate entity or for emergency medical reasons. See 70.41.490 and WAC 246-879-010(10)(d).
Definition	HPAC is defined in emergency rule WAC 246-873A-010(4) as “An individual practitioner's office or multi-practitioner clinic owned, operated, or under common control of a parent hospital or health system, where the physical address of the office or clinic is identified on a hospital pharmacy license.” See also RCW 18.64.043(2).	HCE is defined in RCW 18.64.011(15) as “an organization that provides health care services in a setting that is not otherwise licensed by the state to acquire or possess legend drugs. Health care entity includes a freestanding outpatient surgery center, a residential treatment facility, and a freestanding cardiac care center.” In addition an individual practitioner's office or multi-practitioner clinic, regardless of ownership may seek licensure as a health care entity. HCE is defined in RCW 18.64.011(15) as “an organization that provides health care services in a setting that is not otherwise licensed by the state to acquire or possess legend drugs. Health care entity includes a freestanding outpatient surgery center, a residential treatment facility, and a freestanding cardiac care center.” In addition an individual practitioner's office or multi-practitioner clinic, regardless of ownership may seek licensure as a healthcare entity.
Determination of Licensure	An individual practitioner's office or multi-practitioner clinic owned, operated, or under common control of a hospital or health system may elect to be licensed as either an HPAC or HCE. A hospital or health system that has multiple commonly owned, operated, or clinics under common control may elect to have some clinics licensed as HPACs and others as HCEs.
Licensure	A hospital pharmacy can add or remove clinics at any time by filing an addendum to their hospital pharmacy license with the department and pay appropriate fees. However, the parent hospital pharmacy must notify the commission 15 days prior to the anticipated date of removing or closing of a HPAC from the parent hospital pharmacy license. Renewal: Follow renewal of the hospital pharmacy license instructions.	New Licensure: Entity must submit an application and appropriate fees to the Department of Health and be inspected prior to licensure. Renewal: Follow renewal cycle instructions.
Credential	Doesn't receive a printed credential for each clinic, the parent hospital receives a credential with a letter containing the list of clinics it identified with the department.	Receives a printed credential
Multi-clinic locations	If multiple practitioners under common ownership or affiliation of a parent hospital or health system are practicing under one physical location or facility, that physical location or facility can be listed as a single clinic.	Each organization (e.g., a clinic) must obtain a separate license for each of its locations. One organization occupying multiple suites in one facility is deemed to be occupying one location requiring one license. Separate organizations occupying the same location must obtain separate licenses.
DEA registration	Each clinic that will store and administer controlled substances must register with the DEA. See 21 CFR 1301.12.	Each separate organization (HCE) that will store and administer controlled substances must register with the DEA. See 21 CFR 1301.12.
Inspections	Category 1 HPACs – Representative sample inspected when hospital pharmacy is inspected. Category 2 HPACs – All inspected when hospital pharmacy inspection takes place. See WAC 246-873A-020(3) for category distinctions.	Inspected upon initial licensure and may be subject to re-inspection. See RCW 18.64.310(4). RCW 18.64.470 states “The record of [a health care entity's] drugs shall be open for inspection by the commission, who is authorized to enforce chapter 18.64, 69.41, or 69.50 RCW.”
Accountability	The responsible manager for the parent hospital is responsible for compliance with all laws and any areas of non-compliance. See WAC 246-873A-030.	The HCE responsible manager (pharmacist employed or on contract) is responsible for compliance with all laws and any areas of non-compliance. See WAC 246-904-030.
Procurement of Controlled Substances	The parent hospital pharmacy may transfer controlled substances to an identified HPAC that has a DEA registration number. The total amount transfers from the parent hospital should not exceed five percent of controlled substances for the hospital pharmacy or the HPAC for any 12 consecutive month period. See 21 CFR 1307.11(a)(1)(iv). HPACs are required to maintain formal documentation and transfer of controlled drugs from the hospital to the clinic with the date shipped and date received. See 21 CFR 1304.03 and 21 CFR 1304.04.	HCEs may procure controlled substances, if they have a DEA registration number and have paid the appropriate fee to the Department. See WAC 246-904-040 and WAC 246-907-030(15). The total amount of transfers from a pharmacy to an HCE by intracompany sale/transfer should not exceed 5% of controlled substances for the supplying pharmacy or the HCE for any twelve consecutive month period. See 21 CFR 1307.11(a)(1)(iv). HCEs are required to maintain formal documentation and transfer of controlled drugs from the hospital to the clinic with the date shipped and date received. See 21 CFR 1304.03 and 21 CFR 1304.04.
Controlled Substance Generally	HPACs must follow all federal and state laws and rules regarding controlled substances.	HCEs must follow all federal and state laws and rules regarding controlled substances.
Dispensing of Drugs	Practitioners may dispense drug samples in accordance with state and federal laws and regulations. WAC 246-873A-050(2) states “A licensed hospital pharmacy dispensing appropriately labeled, patient specific drugs to a HPAC licensed under the parent hospital pharmacy may do so only pursuant to a valid patient order or prescription and the order or prescription information is authenticated in the medical record of the patient to whom the legend drug or controlled substance will be provided according to the policy and procedures of the parent hospital pharmacy.” No other dispensing may take place.	Dispensing is allowed but must comply with dispensing requirements and labeling requirements in RCW 18.64.450 and chapter 246-904 WAC.
Cost	See WAC 246-907-0302	WAC 246-907-030(3)(g)

How do I add HPACs to my current hospital pharmacy license?

Interested parties will need to file a "Hospital Pharmacy Associated Clinics" addendum application to their current hospital pharmacy license and the appropriate fee with the Department of Health (DOH). The addendum will require the hospital pharmacy to identify all clinics and their associated category. A new license will be issued when the addendum application processing is completed. All clinics listed will be added to the existing parent hospital pharmacy license file.

The Washington State Pharmacy Quality Assurance Commission (Commission) webpage has been updated with the addendum application information and the fee schedule. The form titled "Hospital Pharmacy Associated Clinics" includes instructions for completing the required information. The updating of clinic information will then become part of the annual hospital pharmacy license renewal application. All licensees will be required to use the addendum form throughout the year if adding clinics to the hospital pharmacy license.

Do I need to report a clinic that has closed, is sold, or is no longer receiving drugs from the hospital pharmacy?

Yes. The parent hospital pharmacy needs to notify the commission no later than 15 days before the anticipated date of removal, sale, or closing of the HPAC. The notice must be in writing and contain specific information outlined in the emergency rule WAC 246-873A-095. The parent hospital will also need to submit the $55 processing fee for an amended license to the department.

How will the clinics be inspected? Will deficiencies be noted for the responsible manager?

The intent is to have the inspections conducted in conjunction with the parent hospital pharmacy inspection. The number of clinic site locations being inspected will be based on the type of clinic category you have listed on your hospital pharmacy license. All deficiencies found at the clinic locations will be noted on the hospital pharmacy inspection form for the responsible manager to review and correct.

What is the cost for adding clinics to the hospital pharmacy license? Is there a cost associated with the addition or removal of a clinic mid-year?

The fee chart will be provided through email notification and available on the Pharmacy Commission fee webpage for reference. The fee structure is broken down into two categories, 1 and 2, with Category 1 HPACs broken down further into tiers (1 to 10, 11 to 50, 51 to 100 and more than 100) based on the number of clinics reported on the parent hospital pharmacy license.

When adding HPACs for initial licensure you will need to pay the fees associated with the category and tier of the HPACs added to the parent hospital license. See examples 1 and 2 below.

If you'd like to add HPACs to a hospital pharmacy license midyear after you have already submitted an addendum application, you'll need to pay the $55 processing fee for an amended license plus the difference between what you initially paid and the fees for adding the HPACs if the number of clinics increase into a different tier. See example 3 below.

If you remove an HPAC midyear you'll need to pay the $55 processing fee for an amended license. See example 4 below. Department of Health doesn't refund any portion of the fee if the number of clinics decrease into a lower tier.

Example 1: You have eight Category 1 clinics; fee will be $640 (total).

Example 2: You have nine Category 1 clinics and one Category 2 clinic; fee will be $1180 (total) ($640 plus $540)

Example 3: You have nine Category 1 clinics, you already paid the $640, but you add another three Category 1 HPACs before the renewal of the hospital pharmacy license; fee will be an additional $960 plus $55 processing fee for amended license (adding another three clinics places you into the next tier and you already paid $640, so $1,600 minus $640 plus $55 equals $1015)

Example 4: You have 11 Category 1 clinics, you already paid the $1,600 and you close one clinic, which drops you into the lowest tier; no refund will be issued. You'll need to pay the $55 processing fee for an amended license. If you still have 10 clinics at license renewal, you'll pay $640.

Will the hospital's director of pharmacy or responsible manager need to notify the investigator regarding how many clinics or what category types of clinics they have associated with their hospital pharmacy license at the time of inspection?

There is no current requirement in the emergency rule to do so, but providing the information will be helpful to the investigator in planning the inspections for the day.

If an HPAC has only a small amount of drugs transferred to it, i.e. a drawer containing only a few drugs, will this clinic need to be listed on the parent hospital pharmacy license?

Yes. It's not the quantity of drugs the clinic possesses, but the fact it possesses the legend drugs and received them from the parent hospital pharmacy that makes the clinic subject to the HPAC license, if it doesn't otherwise have an HCE license.

Who will be responsible for deficiencies found at the HPACs during the investigator inspection?

Any deficiencies or issues found during the inspection by the investigator will be noted on the parent hospital pharmacy inspection form. The responsible manager or director of pharmacy will be responsible for any corrective measures.

How will the responsible manager or director of pharmacy notify DOH, Office of Customer Service (OCS), of a new HPAC needing to be added to the hospital pharmacy license?

By completing and mailing the addendum document, "Hospital Pharmacy Associated Clinics Instructions Checklist (PDF)" with associated fees to the:

Department of Health
P.O. Box 1099
Olympia, WA 98507-1099

Will an entire HPAC be open for inspection during an inspection by a pharmacy investigator?

No. Only those areas where legend drugs are stored, stocked or held, where drugs are compounded, and provided or ordered by the hospital pharmacy are subject to inspection by the department. This excludes physician-ordered and -purchased drug storage areas.

What if the patient-specific drugs, sent to an HPAC for administration, are not used or administered? How should this be handled?

This type of information should be communicated back to the responsible manager at the parent hospital pharmacy immediately upon discovery. The responsible manager or designee shall make arrangements to retrieve the drug(s) in the shortest time possible, return them to the parent hospital pharmacy for proper disposition and update the patient's records accordingly.

Will the compounding activities within a Category 2 HPAC need to meet the standards of the official United States pharmacopeia (USP) as it applies to nonsterile products and sterile administered products?

Yes, unless the licensed individual practitioner, who is not a pharmacist, is compounding the products outside the pharmacy. If a pharmacy is compounding products, then a pharmacist would have to oversee the compounding activities within that Category 2 HPAC. Compounding does not include mixing, reconstituting or other such acts that are performed in accordance with the directions contained in approved labeling provided by the product's manufacturer.

If individual practitioners within an HPAC order drugs directly from a wholesaler, independent from the parent hospital pharmacy, under their own licenses, will those drugs be subject to inspection by the Commission investigator?

No. Individual practitioners are permitted to order from a licensed wholesaler, possess or store drugs under their own license. These drugs will not be subject to inspection by the Commission investigators.