The Texas Higher Education Coordinating Board produced the following higher education impact statement.

    EDUCATIONAL IMPACT STATEMENT ON HB2802 (78th LEGISLATURE)

Bill Summary:  The bill would authorize The Board of Regents of the University of North Texas System to establish a pharmacy school at the University of North Texas Health Science Center at Fort Worth (UNTHSC). The Board may offer courses leading to degrees in pharmacy education and award those degrees.

· Texas currently has four pharmacy schools which offer the six-year Doctor of Pharmacy (PharmD) degree required for practice and licensure: The University of Texas at Austin (UT-Austin); Texas Southern University; University of Houston; and Texas Tech University Health Sciences Center (TTUHSC) at its facilities in Amarillo.

· The 77th Legislature (2001) authorized a new pharmacy school at Texas A&M University – Kingsville (TAMUK) and appropriated $350,000 in start-up funding for the school during the 2002/03 biennium.  Since 2001, TAMUK has broken ground on a 60,000 square foot pharmacy school building and plans to enroll its first class of 75 students in August 2005.

· Pharmacy students must take a minimum of 1,500 hours of on-site clinical training in a variety of venues (i.e., drug stores, hospitals, nursing homes, industry) to be licensed in Texas; therefore, one-third to one-half of their instruction occurs off-campus.  Out-of-state students, primarily from neighboring states, also do clinical training in Texas.

 · Fall 2002 “county of origin” data suggest that students from eight of the 11 regions of the state (including the Metroplex) are underrepresented in pharmacy education.   (Under- or over-representation is determined by comparing the percent of PharmD students from a region to the region’s percent of the state population.)

· Fall 2002 data show that the state’s pharmacy graduates were more ethnically diverse than graduates from other professional schools:  37 percent were White; 24 percent were Black; 24 percent were Asian/Pacific Islander; and 10 percent were Hispanic.  While Hispanics are still under-represented (as compared to their percentage of the total population), TAMUK should increase Hispanic enrollment given its location in the state.

Recent Trends in Pharmacy Education:

· Pharmacy education transitioned from a five-year to a six-year degree program in the mid-1990’s to accommodate expanded clinical training requirements.  Applications and enrollments dipped during this transitional period, and some analysts believe it was a contributing factor in causing the recent shortage of pharmacists.

· Since the late 1990’s, the state’s schools have shown an upturn in enrollment and expected graduates.  Enrollments have increased by 34 percent from 1999 to 2002 and graduates are expected to increase 32 percent from 2000 to 2005.

· The increased emphasis on clinical training in pharmacy education and the favorable job market has created a shortage of clinical practice faculty.  Sixty-seven of the nation’s 84 pharmacy schools reported 417 faculty vacancies in 2002.  One-half of those vacancies were in pharmacy practice positions.

· The faculty shortage has been compounded by the fact that other states besides Texas have authorized the creation of new pharmacy schools to meet expected workforce needs.  Five schools admitted their first class of students in 2002 or 2003.  Another 10-13 universities have shown interest in starting a school.   As a result, TAMUK has found it more difficult than expected to hire a dean due to the competition for faculty from other new schools.

· In recent years, schools have developed satellite programs to provide opportunities to students in other locations with existing resources.  For example, UT-Austin has cooperative or joint programs in Edinburg, El Paso, and San Antonio.

· Distance education has become another viable alternative for providing opportunities to students in other locations.  Three universities in other states currently offer some or all of the PharmD program by this method.  At the University of Florida at Gainesville, the school was able to double its class size by offering instruction via distance education at three remote sites.  

· The state’s pharmacy schools train approximately 90-108 students at clinical sites in the Metroplex each year.

· TTUHSC currently has the greatest presence in the region, training 60 students each year under the supervision of 16 full-time faculty.

· TTUHSC plans to expand its activities in the next few years, training an additional 12-18 students in the Metroplex each year, building an addition to its South Dallas facility, and developing a proposal to deliver the PharmD degree via distance education by Fall 2004.

Texas Workforce Issues and Trends:

· Despite recent fluctuations in the number of graduates from state schools, the number of pharmacists in Texas has kept pace with the state’s increase in population.  From 1980 to 2000, the number of pharmacy school graduates decreased 9 percent; the number of licensed pharmacists increased 44 percent and the state’s population increased by 47 percent.

· Texas is a net importer of pharmacists.  During FY2002, 855 new licenses were issued in the state:  365 to new Texas graduates; 447 to out-of-state applicants; and 43 to foreign applicants.

· Workforce estimates show the state will need 870 new pharmacists per year to fill new and replacement job openings through 2009.  

· Pharmacists are not evenly distributed among the Texas population (Map 3).  South Texas-North (includes San Antonio), High Plains, Gulf Coast, and the Metroplex have the most pharmacists per 100,000 population. All of these regions have major medical centers.  South Texas-South and the Upper Rio Grande regions have the fewest pharmacists per 100,000 population.

· Despite these distributions patterns, UNTHSC reports considerable demand for additional pharmacists in the Metroplex.

· Census projections show significant increases in the most frequent prescription drug users (Texas residents 55 years and older). The projected need for patient-focused pharmacists remains high; however, like most health care disciplines, the future need for pharmacists to serve an aging population will depend on a variety of factors linked to technology, new prescription delivery systems (mail and automated refill services), health care policy, and the success of preventive medicine. 

 

Fiscal Analysis Start-up Funding
	FY 2004	FY2005	FY2006	FY2007	FY2008
Start-Up (Non-formula)	$350,000	U.B.	$2,000,000	$2,250,000	$3,959,734
TRB Bond Retirement			$1,075,893	$1,075,893	$1,075,893
Infrastructure (Formula)					$600,000
Instruction (Formula)
TOTAL	$350,000	$0	$3,075,893	$3,325,893	$5,635,627
Full-Time Equivalent (FTE) Positions	1.5	3.5	5.0	20.0	35.0

Assumptions:

The school would require the construction of a new building located in Fort Worth and financed by tuition revenue bonds.  Construction of a 60,000 square foot pharmacy building (identical in size of the one being built at TAMUK) would cost $21.5 million in tuition revenue bonds and be completed and ready for occupancy in May 2007.  The square footage assumes shared resources and facilities on an existing university campus.  If the building were constructed off-sight, square footage would need to be increased substantially to meet student, faculty and research needs and accreditation requirements.

All other estimates of the number of full-time employees and of the costs of personnel, equipment, instruction and other operating costs mirror the program development, timeline, and appropriation history of the college of the pharmacy at TTUHSC.  The same methodology was used to estimate costs of establishing a pharmacy school at TAMUK during the 77th Legislative Session.

In Fall 2007 (FY2008), the school would enroll the first class of 65 PharmD students, four years after the initial appropriation.  The first class of students would graduate in Spring 2011.

Based on this timeline, UNTHSC would continue to require special item funding for the new pharmacy school through FY2011.

Formula Funding:

 Based on this timeline, the school would be eligible for formula funding for instruction beginning in FY2010.  Using 2002/03 formula funding rates, the Coordinating Board estimates that once UNTHSC reaches full enrollment (260 FTE students), it would receive $5.1 million for instruction and $600,000 for operating and maintaining the pharmacy school building each year.

Summary of Analysis

· The state currently has four existing pharmacy schools located in Austin, Houston (2) and Amarillo.  An additional school is scheduled to open in Kingsville in Fall 2005 and will graduate its first class of students in Spring 2009.

· The number of graduates dropped in the mid- to late 1990s as schools transitioned from a five-year to a six-year degree program.  The transition contributed to a nationwide shortage of pharmacists. The four existing schools now show a significant upturn in enrollment and should graduate at least 351 new pharmacists in 2003.  With new students scheduled to graduate from TAMUK in 2009, the Coordinating Board projects 490 new graduates per year by 2010.

· Texas State Board of Pharmacy reports that it issued 855 pharmacy licenses in FY2002, 15 fewer licenses than were needed to meet projected job openings available each year through 2009.  Distribution varies by region.

· The Metroplex is under-represented in the current pharmacy student population but has more pharmacists per 100,000 population than most other regions of the state. 

· State schools currently have 90-108 students training in the Metroplex.  TTUHSC has the greatest involvement in the area and has plans to expand its activities in the next few years.    

· In recent years, schools have developed satellite and distance education programs to provide educational opportunities to students in other locations.  These programs are usually less costly and have a shorter start-up time for producing graduates.  

· The Coordinating Board estimates that a new school in the Metroplex would cost $12.4 million in start-up funding for the first five-years.  It would continue to require special item funding through FY2011.   Based on 2002/03 Formula Funding rates, the Coordinating Board estimates that the school would receive $5.6 million in formula funding each year, once the school reached full enrollment by Fall 2010.

Recommendation:

With the lag time in graduating pharmacy students from a new school, the costs of a new school should be weighed against less costly alternatives that might provide pharmacy education to residents of the Metroplex.  Furthermore, given limited state resources and a nationwide shortage of clinical faculty, an additional pharmacy school could detract from resources needed at Texas A&M University-Kingsville, which is developing in a region of the state where the need for pharmacists is the greatest.  For those reasons, we respectfully recommend not authorizing the establishment of a new pharmacy school until the Kingsville school is firmly established and trends in pharmacy practice show a continued need for more pharmacists in Texas.