California Board Proposes Central Fill Amendments That Clarify (but Limit) Shared Service Models in the State

Newsletter

The California State Board of Pharmacy (the “Board”) has proposed amendments to its rule regulating central fill pharmacies, Cal. Code Reg. tit. 16, § 1707.4, through a recent Notice of Proposed Action. The comment period is open until December 1, 2025. The Board has not scheduled a public hearing but will schedule one upon written request from an “interested person.”

While the Board’s stated intent is to clarify and modernize California’s central fill provisions, the proposal would effectively narrow the types of permissible shared service arrangements in the state. If adopted, pharmacies could only employ central fill arrangements in-state and such models would be limited to “traditional” central fill models where the prescription is returned to the originating California pharmacy for dispensing. Should the amended rule go into effect, existing interstate and direct-to-patient models may no longer be permitted.

Background:

In October 2023, the Board announced its plan to revise central fill provisions to better align regulations with long-standing enforcement policies. After multiple committee and Board discussions, these proposed amendments were released to formally codify those interpretations. The full text of the proposed amendments to Cal. Code Regs. tit. 16, § 1707.4 can be accessed here.

Key Changes:
  • Removal of “Refill” Limitation: References to “refill” prescriptions are being deleted from the rule. Although the current rule appears to limit central fill to refill prescriptions, the Board has historically allowed central fill for both new and refill prescriptions. The amendment formally adopts this long-standing interpretation.
  • In-State Requirement: The proposed rule expressly requires that the central fill pharmacy be licensed by the Board and physically located in California. Accordingly, a California pharmacy can utilize central fill services only from another in-state pharmacy. The proposed rule does not specify whether the Board likewise intends to restrict California pharmacies from providing central fill services to nonresident pharmacies, leaving that issue unresolved. Note, nonresident pharmacies will not be able to serve as a central fill pharmacy for a pharmacy located in California.
  • Defined Terms Limit Central Fill Models: The proposed rule introduces definitions for “central fill pharmacy” and “originating pharmacy” to clarify each entity’s role. Notably, an “originating pharmacy” is defined as the pharmacy that receives the patient’s original prescription and dispenses the medication to the patient. By defining the originating pharmacy in this manner, the rule appears to limit permissible activity to traditional central fill arrangements, potentially prohibiting direct-to-patient fulfillment models in which the central fill pharmacy ships medication directly to the patient.
  • Automated Final Product Verification: The proposed rule would allow a pharmacist to forgo final verification at the time of dispensing if a pharmacist has already verified the product when stocking the automated dispensing device, provided the device is not subsequently accessed by pharmacy personnel and the medication is dispensed in a properly labeled container.

Our team will continue to monitor developments related to shared services in California and other states. For questions about how these proposed changes may affect your operations, assistance drafting comments to the Board, or related licensing issues, please contact your Quarles attorney or:

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