Pharmacy Law Tidbits
- Legislatures make law by enacting laws or statutes.
- Administrative agencies make law by enacting regulations and by making enforcement decisions through hearings.
- Federal agencies publish their regulations and other information chronologically in the Federal Register and publish final regulations at the appropriate location in the Code of Federal Regulations.
- Courts make law by issuing judicial opinions, which is known as common law.
- The practice of courts relying on prior judicial opinions is called stare decisis.
- A pharmacist’s wrongful act could subject him or her to either or all criminal, civil, or administrative actions.
- Congress is composed of the Senate and the House of Representatives.
- State legislatures are generally modeled after Congress
- The federal court system consists of district courts, circuit courts of appeal, the U.S. Supreme Court, and specialty courts, and has jurisdiction over certain specified controversies.
- Every state has a highest review court and trial courts, and more populous states also have intermediate appellate courts.
- The jury selection process is known as voir dire.
- Witnesses may be ordered to appear in court by means of a subpoena.
- At any time before or during a trial, either side may ask the judge for summary judgment, meaning that the other side’s claim or defense has no merit.
- At the conclusion of each side’s trial presentation, the other side may ask for a directed verdict, meaning the party has not produced enough evidence to prevail.
- Only questions of law may be appealed.
- A defendant can be charged with a crime by means of either an indictment or an arrest.
- The burden of proof in a criminal trial (beyond a reasonable doubt) is much higher than that of a civil trial (preponderance of the evidence).
- Case citations enable a person to find a particular judicial opinion and to know what court issued the opinion.
- The practice of pharmacy and distribution of drug products are subject to both state and federal law.
- Federal authority to regulate drug distribution comes primarily from the Interstate Commerce Clause.
- State authority to regulate pharmacy practice and drug distribution comes primarily from the Tenth Amendment and the inherent authority of a state’s police powers.
- State laws that conflict with federal law are preempted.
- Although the first law directed to protecting the public from food and drugs was enacted in 1906, the nucleus of the FDCA as we know it today was enacted in 1938. The 1938 law required drug products not already on the market could not be marketed until proven safe and required drug labeling to contain adequate directions for use and warnings.
- The Durham-Humphrey Amendment established two classes of drugs: prescription and OTC.
- The Kefauver-Harris Amendment, passed in 1962, added the efficacy requirement for drug products, which was made retroactive to 1938. Drug products marketed prior to 1938 remained exempted. (effective)
- The Orphan Drug Act of 1983 provides incentives for manufacturers to develop and market drugs and biological for the treatment of rare diseases or conditions.
- The DPC/PTRA of 1984 facilitated the approval process of generic drugs while affording patent extensions to innovator drug products.
- The PDMA of 1987 established requirements for prescription drug sample distributions and prohibits the resale of pharmaceuticals by hospitals and other healthcare entities to other businesses.
- The PDUFA of 1992 requires manufacturers to pay applications fees for NDAs.
- The DSHEA of 1984 created the class of products called dietary supplements and required the FDA to regulate these products more as foods than as drugs.
- The FDAMA, passed in 1997, streamlined regulatory procedures to expedite the availability of drugs and devices and created a fast-track process for drugs intended for serious or life-threatening diseases.
- The FDAAA, passed in 2007, provided the FDA with significantly enhanced authority to regulate drug safety, including requiring REMS when necessary.
- The FDASIA of 2012 adds user fees for generic drugs and biosimilars, among several other provisions.
- The DQSA of 2013 clarified the law related to pharmacy compounding, created a new sterile compounding entity called “outsourcing facilities,” and established track and trace requirements for prescription drugs.
- The Cures Act of 2016 streamlines and adds flexibility to the drug development and approval process as well as allowing for more patient experience data during the process.
- The primary goal of the FDCA is to protect the public; however, there is also a trend away from direct regulation to indirect regulation.
- The Office of Medical Products and Tobacco includes CDER, which is responsible for drugs, biologics, and devices, and which most directly affects pharmacy practice.
- The FDA interprets the FDCA through both rulemaking (regulations) and by means of guidance documents.
- The term “drug” has a very broad meaning as defined under the FDCA, and includes any articles intended for use in disease or intended to affect the structure or function of the body.
- Foods are excluded from Part C of the drug definition, raising the issue of what is the definition of food for the purposes of Part C.
- Foods that fall into either the category of “special dietary foods” or “medical foods” are excluded as drugs even though they are marketed with the intent of meeting certain health needs and may be prescription only.
- A food could become a drug if it makes a disease or health claim, unless the claim has been approved by FDA regulation or by “significant scientific agreement.”
- DSHEA defined and created dietary supplements as a special class of products.
- A product that meets the legal definition of a dietary supplement may make four types of nutritional support statements without running afoul of Part C of the drug definition.
- A product that meets the legal definition of a dietary supplement may make an “unqualified” health or disease claim without being categorized as a drug if the FDA has approved the claim by regulation, because the claim meets the significant scientific agreement standard.
- A product that meets the legal definition of a dietary supplement may make a “qualified” health or disease claim even though the claim does not meet the significant scientific agreement test provided the claim is not misleading.
- Dietary supplement products containing drugs are likely drugs unless the dietary supplement was approved prior to the drug.
- As the ephedra product situation demonstrates, the FDA can remove a dietary supplement from the market only if it can prove the product is adulterated, meaning under DHSEA that the product presents a significant or unreasonable risk of illness or injury.
- The dietary Supplement and Nonprescription Drug Consumer Protection Act of 2006 requires manufacturers of dietary supplements and nonprescription drugs to warn of serious adverse events.
- Current criticisms of DSHEA include that the law prevents the FDA from evaluating unsafe products prior to market entry and makes it very difficult for the agency to remove unsafe products from the market.
- Since 2007, the FDA has required the dietary supplements must comply with the CGMP to prevent misbranding and adulteration and must evaluate the identity, purity, quality, strength, and composition of its products. However, the FDA has no authority to inspect the products prior to marketing.
- Pharmacists play an important role in counseling patients in the use of dietary supplements and should direct them to products labeled as conforming to USP or NF standards, if possible.
- The distinction between device and drug can blur and a device could become a drug based upon its intended use; however, the MDA generally gives the FDA adequate authority to regulate devices without taking that step.
- The definitions of label and labeling are different. Any written, printed, or graphic matter “accompanying” an article is labeling, making the definition of accompanying important for distinguishing labeling from advertising.
- The USP and the HPUS are official compendia under the FDCA. The USP establishes drug standards and the HPUS establishes homeopathic product standards.
- Most all violations of the FDCA are either misbranding or adulteration, or both.
- Violators, including pharmacists, of the FDCA are subject to strict liability; however, if the violation occurred in good faith, penalties will not likely be imposed if the violator complies with the FDA investigation.
- The FDA has authority to enforce the FDCA in several manners, ranging from criminal actions to warning letters.
- Corporate officers of pharmaceutical companies can be prosecuted for corporate violations of the FDCA pursuant to the Park Doctrine, even if they had no knowledge of the violations.
- The FDA has the authority to order recalls for certain products, but not drugs, and pharmacists are responsible for knowing when a product has been recalled.
- Product recalls are divided into three classes, depending upon the probability and severity of adverse health consequences.
- A drug is adulterated, even if pure, if subject to conditions that “may” contaminate it or if its manufacture is not in conformance with the CGMP.
- A drug is adulterated if its strength, quality, or purity differs from compendia standards, unless stated on the label or if its strength, quality, or purity differs from what is stated on the label.
- The CGMP is a set of regulations establishing minimum standards for manufacturing methods, facilities, and controls.
- OTC drugs not packaged in tamper-evident packaging, as required by regulation, may be considered both adulterated and misbranded.
- A drug is misbranded if its labeling is false or misleading or if HCEI is not accurate and reliable. Section 502 provides for several other labeling requirements and packaging requirements.
- A drug is misbranded unless its labeling contains a list of any active ingredient and the quantity of each. In most situations the labeling must also contain a list of inactive ingredients in alphabetical order.
- OTC drugs must be labeled with “adequate directions for use” directed to the consumer and prescription drugs must be labeled with “adequate information for use” directed to the healthcare professional. Some drugs can be both OTC and prescription, depending upon the intended indications and whether those indications can be labeled with “adequate directions for use.”
- A drug is misbranded if it is an imitation of another drug or offered for sale under the name of another drug.
- OTC drug labeling has several points of information, including a Drug Facts panel.
- Professional OTC labeling is OTC drug labeling for certain indications intended specifically for the healthcare professional and not the consumer.
- Prescription drug labels must contain several points of information, although the label of unit dose packaging is allowed to contain less information.
- The FDA may require a black box warning in the labeling when the use of the drug may lead to death or serious injury.
- The type of risk warnings for a drug’s use during pregnancy were changed for drugs approved after June 30, 2015 from a five categories of risk approach to a three detailed subsection approach. The new warning requirements will be phased in for drugs approved prior to June 30, 2015.
- The NDC number identifies drug products and is not only used by the FDA, but also in billing and claim submissions. The first segment of the NDC code number identifies the manufacturer or distributor; the second segment identifies the strength, dosage form, and formulation; and the third segment identifies the package size and type of drug.
- No “new drug” may be introduced into interstate commerce unless the FDA has approved it.
- An approved drug can become a new drug if the manufacturer makes certain changes in the product or its labeling.
- The new drug approval process starts with an IND application and requires a substantial amount of information before the application is granted, including pharmacological, pharmacokinetic, and toxicological evaluations.
- Patient informed consent is required during all three IND phases with very limited exceptions.
- The IND period culminates with the filing of the NDA for FDA approval and by statute the FDA has 180 days to act, but significant delays are common.
- The PDUFA of 1992 and its subsequent 5-year extensions have greatly reduced the FDA review time for NDAs.
- The Cures Act encourages the consideration of novel clinical trial designs and the incorporation of real-world evidence into NDA decision-making. The FDA is required to consider how patient experience data can best be utilized. The law also creates or amends four pathways or programs for drugs that treat serious or life-threatening diseases that affect smaller populations or diseases with significant public health risk.
- After NDA approval, any changes a manufacturer may wish to make in the production or labeling of the drug are usually made by means of a supplemental NDA, of which there are three procedural categories: prior approval, change being effective (CBE), and very minor changes.
- After marketing, a manufacturer must maintain a postmarketing surveillance program and submit reports of any serious adverse drug reactions and any other pertinent new safety and efficacy information to the FDA when warranted. The FDA maintains this information in an online database (FAERS).
- The FDA has the authority to require a manufacturer to engage in phase IV testing.
- The FDA has the authority to require a manufacturer to develop a REMS, either during the NDA process or postmarket, in order to manage known or potential serious risks of the drug product. An FDA database of drugs with REMS is available online.
- The FDA can compel safety-related labeling changes postmarket.
- The PTRA, enacted in 1984, codified the FDA’s ANDA policy, expediting generic drug approval while awarding patent extensions and market exclusivity in certain situations for NDA holders.
- The FDA does not approve OTC drug products individually, but rather on the basis of therapeutic category by means of enacting regulations. Thus, a new OTC drug can be marketed if it meets the relevant monograph standards.
- There are several reasons why a drug may be on the market without FDA approval, including that it was marketed prior to 1938; it is a generic drug marketed between 1938 and 1962 that escaped DESI review, is still pending DESI outcome, or just remained on the market despite adverse DESI review; it is a nongeneric drug marketed between 1938 and 1962 that the FDA felt was not a new drug; it is a drug marketed by an unscrupulous manufacturer who intentionally avoided FDA approval for profit purposes.
- When there are marketed unapproved identical or similar drug products, none of which have NDAs and one manufacturer obtains NDA approval, the other products generally must obtain NDA approval within 1 year or risk FDA enforcement action.
- The FDA may approve an investigational drug for widespread patient treatment of serious or immediately life-threatening diseases if certain conditions are met.
- The FDA may approve an investigational drug for an individual patient with a serious disease or condition where there is no comparable or satisfactory alternative therapy provided certain conditions are met.
- Despite FDA efforts to expand access to IND drugs, several states have passed right-to-try laws believing the FDA process is too restrictive.
- The FDA can expedite the approval of a new drug for life-threatening or serious injury if certain conditions are met.
- Biologics are products derived from living organisms and used for the prevention, treatment, or cure of a disease or condition of humans.
- The FDA must approve biologics prior to marketing; however, they are licensed by the Public Health Service.
- As part of the ACA, the BPCIA allows the FDA to approve biosimilar products.
- Biosimilarity means that the biological product is “highly similar” to the reference product with no clinically meaningful differences.
- The voluntary MedWatch program allows healthcare professionals as well as public to report any serious adverse events and other suspected medical product problems directly to the FDA.
- Pharmacies have an obligation to notify patients of the MedWatch phone number via five methods.
- The MDA of 1976 establishes a comprehensive system of device regulation, including device classification, premarket testing, and standards of performance.
- The FDA places all medical devices into one of three classes, with Class III devices requiring premarket approval.
- Cosmetics do not require premarket approval; however, they are subject to certain misbranding and adulteration laws and the FDA can take regulatory action against them.
- The FDA regulates prescription medical product advertising, while the FTC regulates nonprescription drug advertising.
- Advertising and promotion, with certain exceptions, must conform to the true statement requirements of Section 502(n) and the regulations.
- The true statement requirement is violated if the advertising is false or misleading, does not provide “fair balance,” or fails to reveal material facts.
- Brochures, booklets, mailings, bulletins, calendars, price lists, and other information disseminated by the manufacturer for use by healthcare professionals is labeling, not advertising.
- The FDA regulates scientific and educational activities performed by or on behalf of drug manufacturers; however, the agency will not regulate the activity if it is independent and nonpromotional, a determination of which requires the evaluation of several factors.
- The Physician Payment Sunshine Act requires that medical product manufacturers disclose nontrivial payments to prescribers and teaching hospitals.
- Historically, the FDA prohibited any dissemination of off-label use information by manufacturers despite the fact that healthcare professionals commonly prescribe and dispense medical products for off-label uses, and this practice is legal.
- First amendment lawsuits challenging the FDA’s restrictive policy of off-label use promotion have held that the FDA cannot prohibit off-label promotional statements that are truthful and non-misleading.
- The FDA has issued guidance documents providing instruction regarding communications about approved uses of a medical product that are consistent with, but not included in, FDA-required labeling, and communications about HCEI to payors and formulary committees.
- The FTC regulates nonprescription drug advertising under the FTC Act, which prohibits unfair or deceptive acts or practices. The FTC has the authority to order companies to cease and desist, issue corrective advertising, and make affirmative disclosures.
- The Lanham Trademark Act allows for private causes of action for false advertising situations.
- The Durham-Humphrey Amendment established the criteria for differentiating between prescription and OTC drugs; the legality of orally communicated prescriptions; the legality of refills; and labeling requirement exemptions for drugs dispensed pursuant to prescriptions.
- Some states now require patient-centered standardized labels on the containers of dispensed drugs.
- The FDA can authorize a switch of a drug from prescription to OTC status by means of an approved NDA or SNDA, a petition, or by adding or amending an OTC monograph.
- State law determines prescriptive authority and pharmacists must be aware of not only who is authorized to prescribe, but also the scope of that prescriptive authority.
- The EC, Plan B, has experienced a tortuous regulatory history, ultimately ending up as an OTC drug without age and point of purchase restrictions.
- State law determines who can dispense prescriptions, including physicians, although state laws or regulations cannot restrict physicians more than pharmacists or pharmacies without valid justification.
- Community pharmacies and, in many situations, institutional pharmacies must dispense PPIs to patients for oral contraceptives, estrogen-containing drugs, and DES drugs.
- CMI is written information other than a PPI or MedGuide that a pharmacy distributes to a patient and is not reviewed by or regulated by the FDA.
- The FDA requires that manufacturers produce and that pharmacies dispense MedGuides for drugs that pose a “serious and significant concern.”
- Subject to certain exceptions, a MedGuide is not required when the drug is dispensed to a healthcare professional for administration to a patient in an inpatient setting or in an outpatient setting such as in a clinic or dialysis or infusion center.
- The FDA may require that a MedGuide be all of or part of a REMS, or simply be required as labeling.
- Although the promotion of drug products for off-label uses is subject to restrictions and could constitute misbranding, healthcare professionals may legally prescribe and dispense drugs for off-label uses.
- Pharmacists dispensing drugs for off-label use should exercise professional judgment and evaluate the risks to the patient.
- State drug product substitution laws vary from mandatory in some states to permissive in others.
- The FDA’s Orange Book rates pharmaceutically equivalent drugs on the basis of therapeutic equivalence using a two-letter coding system, with the first letter either an A or a B.
- NTI drugs are those with a narrow window between their median toxic or lethal dose and their median effective dose.
- The BPCIA created a regulatory framework to facilitate the approval of generic biologics, also called biosimilars.
- To guide healthcare professionals in evaluating biologics, the FDA electronically publishes the “Purple Book,” where biosimilars are noted with a “B” and, if interchangeable, with an “I”.
- The PDMA requires that prescription drug samples be distributed only to prescribers or pharmacies of hospitals or healthcare entities, and subject to certain requirements.
- The PDMA prohibits the sale, purchase, or trade of prescription drugs purchased by a hospital, healthcare entity, or charitable organization, with certain exceptions.
- Wholesalers must be licensed by the state in which they are located.
- The FDAAA required the FDA to develop standards to identify, authenticate, and track and trace (pedigree) prescription drugs.
- The DSCSA requires that trading partners have systems in place to quarantine, investigate, and notify the FDA and certain trading partners of suspect products by January 1, 2015, and requires that a full system electronic, interoperable track and trace system be implemented by November 2023.
- The DSCSA requires that trading partners, including pharmacies, must receive and transfer transaction data which includes the transaction information, history, and statement
- Manufacturers must affix a uniform product identifier (UPI) on each individual package and homogenous case by November 2018
- In general, the importation of prescription drugs is illegal; however, persons may import a limited amount for personal use if certain conditions are met.
- Courts have ruled that state and local government actions to obtain drugs from Canada or other countries for their employee benefit plans violate federal law.
- U.S. pharmacies or other entities assisting patients in purchasing prescription drugs from other countries could face prosecution by the FDA.
- The FDCA exempts pharmacies from FDA inspection authority when they do not manufacture, prepare, or compound drugs or devices other than in the regular course of their retail business.
- The courts have held that the FDA can inspect pharmacies based on the probable cause that they might be in violation of the law in order to determine that fact.
- FDA agents do not need a warrant to search.
- If community pharmacies use alcohol in compounding, it is most likely tax-paid ethyl alcohol.
- Hospitals, hospital pharmacies, and nonprofit outpatient clinics may use tax-free alcohol to compound drug products for their patients, provided certain requirements are followed.
- The CPSC is responsible for enforcing the PPPA, which requires the use of child-resistant containers for packaging most OTC drugs and nearly all prescription drugs that the pharmacist will dispense directly to the consumer.
- A drug may be dispensed only one time in a child-resistant container, unless it is glass or threaded plastic, in which case it may be reused with a new safety closure.
- Either the physician prescribing the drug or the patient may request noncompliant containers for a dispensed prescription drug. These requests may be oral, but writing is preferable.
- The patient may make a blanket request for noncompliant containers orally, but writing is preferable and the pharmacist should recheck the request with the patient periodically.
- Certain drugs are exempt for the PPPA, including sublingual nitroglycerin and sublingual and chewable isosorbide dinitrate in strengths of 10 mg or less.
- Price advertising of prescription drug products by pharmacies is considered reminder advertising and is exempt from advertising regulations, provided certain conditions are met.
- The FDCA exempts compounding pharmacies from registering as manufacturers when doing so in the regular course of dispensing and selling drugs or devices at retail.
- The DQSA of 2013 reinstated the provisions of § 503A (less the unconstitutional provisions) and again stripped the FDA of its authority to declare exempt pharmacy-compounded drugs as new drugs.
- Some of the conditions a § 503A pharmacy must meet to be exempt include:
o Compounding upon receipt of a prescription for an individual patient
o Compounding a “limited quantity” in anticipation of receiving a prescription
o Compounding copies of commercially available products only occasionally and not in inordinate amounts
o Compounding in accordance with USP standards if in existence
o Compounding only with FDA approved drugs that have not been withdrawn or removed from the market because of safety and efficacy issues
- The DQSA also created a new category of sterile compounding pharmacies under § 503B known as “outsourcing facilities,” a status for which pharmacies could voluntarily register, although an outsourcing facility need not be a pharmacy.
- Neither 503A nor 503B allow an exemption to 501(a)(2)(A) related to insanitary conditions.
- The FDA has determined that pharmacies may not supply compounded drugs for “office use” to physician offices and other healthcare entities. However, this determination is controversial.
- The FDA has issued a guidance interpreting “limited quantity” for the purposes of anticipatory compounding.
- A pharmacy that compounds an OTC product not pursuant to prescription would likely be violating the new drug provision of the FDCA, 503A, and state law.
- Patent rights of a drug manufacturer supersede the rights of a pharmacy to compound that product even pursuant to prescription.
- All healthcare entities, including pharmacies, whether they compound or not that handle HDs, must follow the standards established in USP chapter <800>.
- USP 800 requires at a minimum that a healthcare entity handling HDs must maintain a list of HDs, proper facility and engineering controls, competent personnel, safe work practices, proper use of PPEs, and policies for HD waste segregation and disposal.
- NIOSH defines, identifies, and maintains a list of HDs
- When the handling of an HD does not present a significant risk, the entity may make an assessment of risk and determine alternative containment strategies rather than have to comply with all the standards of the chapter.
- OBRA ‘90 recognizes a public expectation of pharmacists that goes beyond oversight of drug distribution to include the detection and resolution of problems with drug therapy.
- States were required to adopt the minimal standards under OBRA ‘90 to continue to participate in Medicaid; however, some states may have stricter requirements.
- The basic framework of OBRA ‘90 includes rebates, demonstration projects, and DUR.
- The DUR process includes retrospective review, educational programs, and prospective review.
- The components of the prospective review are screening of prescriptions prior to dispensing, the offer of patient counseling, and documentation of patient information.
- In the screening function, pharmacists are required to detect potential problems (therapeutic duplication, drug[1]disease contraindications, drug-drug interactions, incorrect drug dosage or duration of treatment, drug-allergy interactions, and clinical abuse/misuse) and react to concerns appropriately.
- OBRA ’90 requires an offer to counsel, although some states have stricter requirements that mandate counseling. When counseling, pharmacists are to use their professional judgment to determine what information is relevant for a particular patient.
- Patients may refuse counseling, but the refusal must be informed and voluntary. Pharmacies may request a written waiver from the patient.
- Pharmacists must make a reasonable effort to obtain, record, and maintain patient information. This includes the patients name, address, telephone number, birthdate, gender, significant medical history, and pharmacist comments.
- HIPAA regulates four aspects of health information: (1) transaction and code sets, (2) national provider identities, (3) security, and (4) privacy.
- Covered entities, such as pharmacies as well as business associates must comply with HIPAA.
- PHI is protected by HIPAA. PHI includes all forms of health information that (1) relate to past, present, or future physical or mental health; the provision of care; or payment for care; and (2) identify the patient or could reasonably be expected to identify the patient. De-identified information is not PHI.
- “Notice of Privacy Practices” must include how the pharmacy intends to use and disclose information, the pharmacy’s obligation to notify the patient of a breach of unsecured PHI, a statement that the individual can restrict certain disclosures to a health plan when they pay for the treatment out of pocket in full, a description of the legal duties of the pharmacy to protect PHI, a statement regarding uses and disclosures that require authorization, a statement of the patient’s rights and how they can exercise those rights, a statement that the patient may complain to DHHS and how to file a complaint, and contact information for a company representative to contact with privacy concerns.
- “Notice of Privacy Practices” must be provided in paper form on the day the pharmacy first provides service, unless the patient consents to electronic transmission. The notice must also be posted in a prominent and visible location and made available upon request as well as posted on the company website, if they have one.
- Pharmacies must make a good faith effort to distribute and obtain a written acknowledgment of receipt of their “Notice of Privacy Practices.” Only one signed acknowledgment is required for each patient.
- PHI can be used and disclosed for TPO; however, pharmacies are only permitted to disclose the minimum amount of PHI necessary to accomplish the objective.
- Exceptions to the minimum necessary requirement include communications to the patient; communications regarding the treatment of the patient with other providers involved in the treatment; when authorized by the patient; when required by DHHS; and when required by law.
- Complete disclosure of PHI to the patient is required to be given if requested by the patient. In general, covered entities have 30 days to act on requests.
- Patients have a right to request an accounting and disclosure of PHI.
- Pharmacies are not liable for incidental uses and disclosures of PHI, provided they applied “reasonable safeguards.”
- In addition to TPO, pharmacies may disclose PHI for governmental-type reasons, including public health activities, law enforcement purposes, and as required by law.
- Pharmacies are required to address breaches of unsecured PHI with limited exceptions and notify affected individuals.
- Proper disposal of PHI is required under HIPAA. Pharmacies have been involved in violations for improper disposal of PHI in dumpsters and open containers.
- Sale of PHI and use of PHI for marketing with limited exceptions requires individual authorization.
- Exceptions to marketing include communications about general health issues; for patient treatment; face-to-face; for case management or care coordination; to direct or recommend alternative treatments, therapies, and more; and about health-related services offered by the entity.
- In addition to meeting HIPAA requirements for PHI, pharmacies must also comply with FTC and FCC regulations regarding unfair and deceptive business practices, telemarking, and advertising.
- Penalties for HIPAA can be severe and could be the basis for lawsuits in state court.
- The primary federal law that regulates controlled substances is called the Federal Comprehensive Drug Abuse Prevention and Control Act of 1970, more commonly known as the CSA.
- To reduce diversion, the CSA has a system of national registry, which also serves the purpose of establishing national uniformity.
- The DEA is charged with administering all parts of the CSA.
- The CSA regulates all activities regarding controlled substances; however, states may also have laws regulating controlled substances pursuant to their police powers; the pharmacist must follow the stricter of the two laws.
- When pharmacists are faced with conflicting federal and state laws or a federal law where there is no comparable state law, they must follow the federal law.
- The CSA classifies controlled substances into five schedules. It is important to remember the definitions of each schedule and common drugs in each schedule.
- Only drugs in Schedule I are deemed to have no acceptable medical use.
- Drugs with acceptable medical uses are placed in Schedules II through V, depending upon their relative potential for abuse and relative potential for physical or psychological dependence.
- State laws permitting the use of marijuana have advanced dramatically. However, marijuana remains a schedule I drug under the CSA, and the federal government has the right at any time to challenge conflicting state laws or prosecute under federal law.
- The attorney general has the authority to schedule or transfer drugs between schedules. Recent examples include tramadol and hydrocodone combination products.
- Before scheduling or rescheduling can occur, the secretary of DHHS must provide to the attorney general a scientific and medical evaluation of a drug and a recommendation regarding whether the drug should be controlled.
- The secretary must forward to the attorney general any new drug application for a drug having a stimulant, depressant, or hallucinogenic effect, if it appears the drug has abuse potential.
- Commercial containers of controlled substances must be labeled with the “C” symbol and schedule designation. The symbol must be prominently located on the label or labeling.
- The symbol on all labeling must be clear and large enough for identification.
- The CSA achieves control and accountability for activities involving controlled substances through registration. There are 10 categories of registration, and dispensers must renew their registration every 3 years.
- There are limited exceptions to registration, most notably for agents or employees of registrants.
- Individual practitioners may be authorized to prescribe controlled substances under the hospital or institutional registration, provided all conditions are met. These prescriptions can be dispensed in the community setting.
- Under the CSA, the term “dispense” includes the delivery, prescribing, and administering of controlled substances. State law determines which of these activities a practitioner (e.g., physician, pharmacy, hospital, mid-level providers) may perform.
- Pharmacies and pharmacists are included under the definition of practitioner, but not under the definition of individual practitioner or institutional practitioner.
- Manufacturing under the CSA is different than manufacturing under the FDCA. Under the CSA, those engaged in compounding (preparation exceeding 20% of a narcotic substance), repackaging, or relabeling must be concerned with registering as a manufacturer.
- Dispensers may distribute, without being registered as distributors, controlled substances to other practitioners for the purpose of general dispensing by these practitioners to their patients, provided that the total number of dosage units does not exceed 5% of the total units of controlled substances distributed and dispensed in 1 year.
- Registered distributors and manufacturers are required to design and operate a system that is able to detect suspicious orders of controlled substances and inform the DEA upon discovery of suspicious orders.
- The DEA has interpreted that dispensing does not include the act of delivering a compounded product to a practitioner pursuant to prescription for a particular patient. The DEA considers this activity distribution and requires registration as a manufacturer.
- Dispensers may engage in research as a coincidental activity, provided they comply with the conditions.
- Each place of business dispensing controlled substances must register using DEA Form 224. Renewals (Form 224a) are required every 3 years. Registration and renewal can be performed online on the DEA website.
- DEA registrations may be modified, transferred, or terminated, provided that the DEA is notified and approves of any change.
- The DEA can deny, revoke, or suspend a registration if it is determined that the registration would not be in the public interest.
- For practitioners that handle schedule I controlled substances, these must be stored in a securely locked, substantially constructed cabinet.
- Individual practitioners (e.g., physician, dentist) must store C-II–C-V drugs in a securely locked, substantially constructed cabinet.
- Pharmacies and institutional practitioners may store C-II–C-V drugs in a securely locked, substantially constructed cabinet or they may disperse them throughout their stock of noncontrolled substances in a manner that will obstruct theft.
- Any theft or significant loss of any controlled substance must be reported to the DEA in writing, using DEA Form 106, within one business day of discovery.
- A medication order in a hospital or institution is not a prescription and is not required to comply with the strict requirements of the CSA.
- Prescriptions under the CSA must be written for an ultimate user (e.g., a patient); prescribers are thus prohibited from writing controlled substance prescriptions for office use.
- A prescription for a controlled substance may be issued only by an individual practitioner who is both (1) authorized to prescribe controlled substances in the state in which he or she is licensed to practice and (2) registered or exempt from registration under the CSA.
- Individual practitioners may not delegate their prescriptive authority; however, an employee or agent may communicate it to the pharmacist or prepare the prescription for the prescriber’s signature.
- One way to verify that a prescription is valid is by checking the DEA registration number of the prescriber. The DEA number is a nine-character number consisting of two alphabet letters followed by seven digits.
- Pharmacists employed by a pharmacy registered with the DEA can dispense controlled substance prescriptions.
- Controlled substance prescriptions must be dated as of the date of issuance and may not be pre- or postdated.
- Prescribers must include the following information on controlled substance prescriptions: date of issuance; name and address of patient; name, address, and registration number of prescriber; drug name, strength, and dosage form; quantity prescribed; directions for use; and prescriber signature (for written/electronic prescriptions). The pharmacist has to ensure all the required information is included on the prescription prior to filing it. In addition, prior to filing a prescription, the pharmacist must include the name or initials of the pharmacist dispensing the drug, the date dispensed, and the amount dispensed.
- Based on previous DEA guidance, for C-III, C-IV, and C-V medications, the pharmacist can correct inaccurate or missing information on written prescriptions. The pharmacist is never permitted to make changes on a written prescription to the patient’s name, controlled substance prescribed, or the prescriber’s signature. Pharmacists should refer to state guidance on what can and cannot be corrected on C-II prescriptions.
- A prescription for a controlled substance must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his or her professional practice. The responsibility for the proper prescribing and dispensing of a controlled substance is upon the prescriber, but a corresponding responsibility rests with the pharmacist. Pharmacists that knowingly fill an invalid prescription are subject to the CSA penalties.
- Pharmacists must be vigilant for invalid prescriptions (e.g., fraudulent prescriptions, prescriptions exceeding the scope of practice, or prescriptions by individual practitioners not issued for a legitimate medical purpose), recognize red flags, and take appropriate steps to verify identified concerns.
- A controlled substance prescription must be based on a legitimate physician–patient relationship. Facial validity of a prescription alone does not necessarily mean that a prescription is valid.
- Pharmacists should not use the legitimate medical purpose rule as a reason to deny legitimate pain patients controlled substances because alternative therapies may exist. Rather, decisions should be based upon the exercise of professional judgment weighing all clinical factors in the best interests of the patient.
- It is illegal for a pharmacist to dispense narcotic drugs for maintaining an addiction or detoxifying an addict. A limited exception to this includes authorized prescribers treating patients under the DATA.
- Prescriptions for large quantities and doses of opioid medications may be valid, but the pharmacist should not hesitate to verify the legitimacy of prescriptions for pain patients.
- Schedule II prescriptions can be written or electronically prescribed. States may have additional or stricter requirements for the prescribing of schedule II medications.
- Schedule II medications may be prescribed orally in emergency situations, if specific criteria are met.
- Prescriptions for schedule II medications may be faxed as the original in three limited circumstances.
- Schedule II prescriptions are not permitted to be refilled; however, they may be partially filled up to 30 days or up to 60 days for LTC or terminally ill patients.
- A prescriber can provide a patient multiple prescriptions on the same day for the same schedule II medication, if specific criteria are met.
- Schedule III, IV, or V prescriptions may be transmitted as written, faxed, electronic, or orally ordered.
- No schedule III and IV prescription may be filled or refilled more than 6 months from the date of issuance or more than five times, whichever comes first.
- The DEA requires specific information to be recorded by the pharmacy for each fill and refill.
- Partial fills of schedule III, IV, and V prescriptions are permitted; however, the total quantity dispensed in all partial fillings cannot exceed the total quantity prescribed.
- The pharmacy label for controlled substance prescriptions dispensed must contain date of initial fill, refill date (if applicable), pharmacy name and address, prescription number, patient name, prescriber name, directions for use, and cautionary statement (for CII-IV medications).
- Regulations require that electronic controlled substance prescriptions be transmitted only through an approved application system. Pharmacies must follow specific procedures for the receipt of an e-prescription, if the transmission fails and if changes to the prescription are made.
- Controlled substance prescriptions with refills may be transferred to a different pharmacy one time, if state law allows. Specific information must be documented by both pharmacies.
- Patients may utilize take-back events, mail-back programs, and collection receptacles to dispose of unused or expired controlled medications. For retail pharmacies to offer a collection receptacle, they have to voluntarily register with the DEA as a collector.
- The DEA permits controlled substances to be filled at central fill pharmacies, provided they have a contractual arrangement with the originating pharmacies. The prescription must be dispensed to the patient from the originating pharmacy.
- In an effort to control rogue Internet pharmacies, which operate without a valid physician–patient relationship, the law requires the registration of Internet pharmacies, and that a prescription is valid only if issued for a legitimate medical purpose by a prescriber who has conducted at least one in-person medical evaluation of the patient.
- All states have PDMPs that collect and provide information regarding controlled substances dispensed within the state.
- LTCFs do not have to register with the DEA and have numerous challenges regarding excess supplies of controlled substances. Pharmacies servicing LTCFs may utilize ADSs to decrease the stock of controlled substances. In addition, pharmacies servicing LTCFs may register as a collector to provide LTCFs with an option to dispose of unwanted medications.
- The DEA permits prescribers to have an agency relationship with an LTCF or hospice employee, provided there is a formal, written agreement.
- The DEA permits pharmacies to place sealed emergency kits in LTCFs; however, specific protocol has to be followed to remove a drug from the kit.
- The CSA requires complete and accurate recordkeeping for inventory, drugs received, and drugs dispersed.
- Records must be kept for 2 years, but it is prudent to keep them longer.
- Some records (e.g., invoices and packing slips) are permitted to be kept off-site at a central location. Executed order forms, inventory records, and paper prescriptions cannot be maintained centrally.
- A controlled substance inventory is required to be conducted prior to a new business opening and every 2 years thereafter. An inventory can occur at the beginning of the business day or at the close of business.
- Newly scheduled medications must be inventoried on the effective date of scheduling.
- Inventories for schedule I and II substances must include an exact count. Schedule III, IV, and V substances can be estimated; however, an exact count is required if the container holds more than 1,000 units.
- Records of receipt include invoices for schedule III, IV, and V substances and DEA Form 222 for schedule I and II substances, and must include the date of receipt.
- Records of dispersal include prescriptions, record books, DEA Form 222, invoices, institutional records, records of disposal, and records of theft or loss.
- Prescriptions for controlled substances must be filed using one of two options. One option includes three separate files (CII; CIII-V; and noncontrolled drugs) and the other option includes two separate files (CII; CIII-V together with noncontrolled drugs).
- Various states allow for the nonprescription dispensing of schedule V medications when specific criteria are met.
- Pharmacies are permitted to distribute limited amounts of scheduled medications to other practitioners. An invoice is required for CIII-V medications and a DEA Form 222 is required for CII medications. The pharmacy will have to register as a distributor if it exceeds the 5% rule.
- Distributions of controlled substances to a prescriber for office use must be pursuant to an invoice and not by the issuance of a prescription.
- Medication or chart orders for controlled substances must include the minimum information required of records of dispersal and must be maintained in such a manner as to be readily retrievable.
- DEA Form 41 is to be used by registrants to request authority to dispose of controlled substances in their inventory.
- Registrants must notify the DEA within one day of discovery, by using Form 106, of any theft or significant loss of controlled substances.
- Recordkeeping requirements for individual practitioners (e.g., prescribers) differ from the recordkeeping requirements of pharmacies.
- Inventory records, records of receipt, and records of drugs dispersed must all contain specific information, as outlined in DEA rules.
- Proper execution of DEA Form 222 is required to distribute a controlled substance in schedule I or II to another registrant.
- To obtain Form 222, the registrant must submit an order form requisition to the DEA.
- All three copies of the Form 222 must be executed simultaneously, such that the purchaser keeps Copy 3 and supplies Copies 1 and 2 to the supplier, who in turn keeps Copy 1 and submits Copy 2 to the DEA.
- A registrant may use the CSOS as an alternative to the Form 222 and may order other than only CII substances.
- A pharmacy may authorize a POA to individuals it wishes to have CII order authority.
- Lost or stolen Form 222 forms require the purchaser to execute another Form 222 with required information about the lost or stolen forms.
- Registrants must keep executed DEA 222 Forms separate from all other records for 2 years.
- Criminal penalties under the CSA are harsh and include imprisonment and fines.
- The severity of the penalty often depends on the nature of the activity, the drugs involved, and the defendant’s prior record.
- Practitioners may be prosecuted as drug traffickers under the CSA.
- To be legal, distribution and dispensing under the CSA must meet CSA requirements. Intentional and unintentional violations of the law will be penalized.
- Noncompliance with the CSA could also lead to disciplinary action against a pharmacy/pharmacist license by the state board of pharmacy.
- Administrative agencies, including the DEA and state boards of pharmacy, have the right to inspect pharmacies. Inspections may be routine or triggered by a specific reason.
- The U.S. Constitution (Fourth Amendment) provides protection from unreasonable searches and seizures.
- DEA inspectors are permitted to examine and copy records and reports, inspect the premises, and take inventory of controlled substances. The pharmacist must consent in writing for financial data, sales data, or pricing data to be inspected.
- Prior to an inspection, the inspector must state the purpose of the inspection, present his or her credentials and a written notice of inspection, and obtain a written statement of informed consent by the owner or pharmacist in charge.
- As an alternative to presenting a notice of inspection, an inspector may present an AIW or search warrant for which the consent of the pharmacist is not required.
- The probable cause requirement for an AIW only requires a showing of a “valid public interest,” which is generally satisfied by such factors as large purchases of controlled substances or a substantial period since the last inspection.
- The probable cause requirement for a search warrant is much stricter and requires evidence that a crime has been or will be committed on the premises or that evidence relevant to a crime exists at the premises.
- An AIW must contain certain specified information and may only be served during regular business hours, while a search warrant may be served at any time.
- There are several exceptions as to when an AIW may be required, as established by DEA regulation and court decisions.
- State pharmacy board inspections are governed by state law and may differ from federal law.
- Whether state laws permitting the inspection of a pharmacy without a warrant are constitutional depends upon whether pharmacy can be considered a “pervasively regulated industry.”
- For inspections, pharmacists should ask for the inspector’s credentials, be cooperative and cordial, document important details about the inspection, and never sign anything unless it is completely understood what is being signed.
- Congress authorized the medical community to treat addicts for their addiction in 1974 in response to skyrocketing heroin addiction.
- Methadone, LAAM, and buprenorphine products are approved for the treatment of opioid use disorder in registered OTPs.
- Methadone may not be prescribed or dispensed for the maintenance or detoxification of addicts in the regular course of medical practice. Community pharmacies can only dispense methadone when prescribed for pain.
- DATA allows for the office-based treatment of opioid-dependent patients.
- Under DATA, qualifying prescribers with a special DEA (“X”) number may prescribe approved buprenorphine products to treat opioid use disorder, and pharmacies may dispense these prescriptions.
- Buprenorphine products may be prescribed and dispensed for pain, in which case the special DEA (“X”) number is not required.
- The Controlled Substance Registrant Protection Act of 1984 was passed to help address the threat to pharmacists of robberies and burglaries. Federal investigations are required for most robberies and burglaries, with violations of the law leading to severe monetary and criminal sanctions.
- The Chemical Diversion and Trafficking Act of 1988 was passed to help curb the illicit manufacture of controlled substances. Manufacturers and suppliers of specific chemicals must meet specific recordkeeping requirements.
- Due to serious consequences of the abuse of anabolic steroids by athletes, the Anabolic Steroids Act of 2004 made anabolic steroids for human use a schedule III substance under the CSA.
- Congress enacted the CMEA in 2005 and the MPA in 2008 so as to regulate the OTC sales of products containing ephedrine, PSE, or PPA in an effort to curb the use of these products in the manufacture of methamphetamine. Many states have even stricter laws.
- Sale and purchase quantities apply, including that a retailer may not sell more than 3.6 g of ephedrine base, PSE base, or PPA base to a purchaser per day.
- Recordkeeping requirements apply and all sales must be recorded with all the required information at the time of sale in a written or electronic logbook.
- All retail sellers must self-certify annually.
- If properly packaged, controlled substances may be mailed using the U.S. Postal Service.
- Medicare is the federal government health plan, insuring primarily those individuals over 65 years of age and those with permanent disabilities; it has four components, Parts A, B, C, and D.
- Medicare Part A, in part, insures for hospitalization and certain LTCF stays, home health visits, and hospice; Part B, in part, covers certain outpatient products and services; and Part C, called Medicare Advantage, allows beneficiaries to choose a managed care plan.
- Medicare Part D provides prescription drug benefits through either private stand-alone plans or as a component of a Part C plan.
- Once enrolled in a Part D plan, an enrollee cannot normally change plans until the next open enrollment period, except if making a one-time change to a five-star plan. The open enrollment period is from October 15 to December 7.
- Plans employing a formulary must utilize a P&T committee to develop and review the formulary; and, the formulary must include all therapeutic categories and classes of drugs with at least two drugs in each class, except for certain classes where all drugs must be covered.
- Plans may not change therapeutic categories and classes in the formulary other than at the beginning of the year, except to include new drugs or therapeutic uses.
- Part D plans must ensure that beneficiaries have convenient access to a network of pharmacies and cannot use mail-order pharmacies exclusively in place of community pharmacies. Beneficiaries are entitled to receive the same supply of drugs at either a community or mail-order pharmacy.
- Although the law contains an “any willing provider” provision, many plans presently use networks of preferred pharmacies and some PBMs have excluded pharmacies from plans saying that they are not “similarly situated.”
- Pharmacies are reimbursed the ingredient cost plus a dispensing fee as determined by the plan; claims must be paid within 14 days of electronic submission.
- Pharmacies must provide a printed notice to the patient when a prescription is not covered by the plan.
- The law requires plans to provide MTM programs and pharmacists may receive fees for providing those services. Plans may not require more than three chronic diseases for a beneficiary to qualify for MTM services and must target at least five of nine core chronic conditions.
- False claims under Part D are subject to the federal fraud and abuse statutes, and both plans and pharmacies must have policies and procedures in place to address fraud, waste, and abuse, including pharmacy employee training programs.
- Pharmacies that supply DMEPOS must be accredited; however, the ACA allows an exemption if certain criteria are met.
- Pharmacists are not recognized as healthcare providers under Medicare, affecting their ability to be compensated for services. APhA is currently supporting federal legislation to change the provider status for pharmacists.
- Medicaid provides healthcare costs for certain categories of indigent patients and is administered by the state, jointly funded by the federal government and the state, with each state program subject to federal approval and federal regulation.
- The federal government established the “MAC” program for drugs in 1975 out of concern that state Medicaid agencies were reimbursing pharmacies too much.
- The FUL program replaced the MAC program in 1987. FUL drugs are multiple source drugs for which CMS determines a reimbursement amount.
- The calculation for Medicaid reimbursement to a pharmacy for a dispensed drug product on the FUL list is the FUL price of the drug plus a dispensing fee, as determined by each state.
- Current law provides that the FUL price of a drug is determined as no less than 175% of the weighted average of the most recently reported AMPs for therapeutically equivalent drug products available for purchase by “retail community pharmacy” on a nationwide basis. CMS regulations provide an exception allowing for the use of a higher multiplier when the FUL calculation amounts to less than the average retail community pharmacies’ acquisition cost.
- The definition of “retail community pharmacy” excludes mail order, nursing home, LTCF, hospital, clinic, not-for profit and government pharmacies, and PBMs (42 C.F.R. § 447.504(a).
- AMP is defined as the average price paid to the manufacturer by wholesalers for drugs distributed to “retail community pharmacy” and that “retail community pharmacy” pays for drugs directly from the manufacturer.
- The FUL price must be based on quantities of 100 tablets or capsules or on quantities commonly provided by pharmacists. The agency must specify the compendia source for its price basis for each drug, and an FUL drug must be therapeutically equivalent and available from three different suppliers.
- If a drug is not on the FUL list or the prescriber has designated “brand necessary,” the pharmacy is reimbursed the lower of (1) AAC plus a dispensing fee established by the agency or (2) providers’ usual and customary charges to the general public (42 C.F.R. § 447.512(b).
- Prior to the formula provided earlier, pharmacies were reimbursed based upon the EAC of the drug rather than the AAC. States determined EAC based upon AWP; however, AWP has been determined to be a flawed estimate of what a pharmacy actually pays for a drug product.
- Medicaid prescriptions must be written on tamper-resistant prescription pads.
- The FCA prohibits knowingly presenting or causing to be presented a false or fraudulent claim for payment or approval; it prohibits knowingly making, using, or causing to be made or use a false record or statement material to a false or fraudulent claim.
- Violations of the FCA could result in civil penalties of between $5,000 and $10,000 per claim, plus treble damages and the government has charged chain pharmacies with FCA violations.
- Private persons can sue on their own behalf or on behalf of the federal government, and are known as qui tam lawsuits.
- The AKS prohibits anyone from knowingly and willfully soliciting, receiving, offering, or paying any remuneration (including any kickback, bribe, or rebate) in exchange for inducing referrals or for furnishing any goods or services paid for by Medicare or Medicaid.
- Violations of the AKS constitute a felony punishable by a maximum fine of $25,000 per violation and/or 5 years imprisonment, and the government has charged chain pharmacies with AKS violations.
- There are several exceptions to the AKS known as “safe harbors,” and some apply specifically to certain pharmacy activities.
- Drug manufacturer programs that induce healthcare providers to generate business for the manufacturer might violate the AKS. This includes educational grants, research funding, gifts to providers, fees for drug switching or consultation activities, and similar type programs.
- The Stark law prohibits certain healthcare providers from referring Medicare or Medicaid patients to certain entities in which the healthcare provider (or an immediate family member) has a financial relationship.
- Proof of a Stark violation does not require intent or that the defendant acted willfully or knowingly.
- There are federal rules that impact pharmacy practice regarding LTCFs, including the storage, administration, and dispensing of drugs.
- If the interdisciplinary team at a facility determines the practice clinically appropriate, residents may self-administer medications.
- Each resident’s drug therapy must be free from unnecessary drugs. This includes drugs used in excessive doses (including duplicative therapy), excessive durations, without adequate monitoring, without adequate indications for its use, in the presence of adverse consequences, or any combination of these.
- LTCFs are limited in using psychotropic medications (e.g., antipsychotics, antidepressants, anti-anxiety, and hypnotics). Residents are not to be given psychotropic medications unless they are needed for a documented diagnosis, and any psychotropic medications not appropriately prescribed should have gradual dose reductions and discontinued. PRN orders for psychotropic medications are limited to 14 days. CMS limits pharmacies servicing LTCF to dispense not more than a 14-day cycle of medications.
- Medication error rates at a facility cannot be greater than 5%, and residents must be free of any significant medication errors.
- LTCFs must employ or obtain the services of a pharmacist to provide consultation on all aspects of the provision of pharmacy services.
- Each resident of a LTCF must have his or her DRR, in conjunction with the resident’s medical chart, at least once a month by a consultant pharmacist. The consulting pharmacist must document on a separate, dated, written report any irregularities to the attending physician, the facility’s medical director, and the director of nursing. The physician must document in the medical record that the irregularity was reviewed and what, if any, action was taken. If no action was taken, a reason is required to be documented. An LTCF must develop and maintain policies and procedures for DRRs.
- The Sherman Antitrust Act contains two sections: Section 1 prohibits concerted action that unreasonably restrains trade; and Section 2 prohibits exploitation of monopoly power for the purpose of harming competition.
- A violation of Section 1 requires a formal or informal agreement between competitors.
- The amount of market power a defendant possesses is generally critical to an antitrust analysis. The percentage of market power a business must have to be deemed a monopoly depends upon the facts of each situation, but market shares of more than 40% generally raise monopoly concerns.
- Courts generally apply one of two types of analyses when evaluating whether an activity violates the Sherman Act: the rule of reason or the per se rule. Under a “rule of reason analysis” courts will balance the pro- and anticompetitive effects of the defendant’s conduct. Courts will apply the “per se rule” to certain activities such as price fixing, boycotting, and tying arrangements. Price fixing is an explicit or implicit agreement among competitors to affect price or the allocation of services. Boycotting is an agreement among competitors not to deal with another party. A tying arrangement is one where the purchase of one product is conditioned on the purchase of another and when the seller can force the buyer to purchase the tied product.
- PBMs manage the prescription drug portion of a health plan.
- Because PPOs consist of competitors, they must be careful to not engage in prohibited activities such as price fixing or boycotting.
- PSAOs (PPOs) are critical to allowing independent and small chain pharmacies to compete for third-party prescription plans.
- Purchasing cooperatives are generally procompetitive; however, if a cooperative has significant market share, it must be cautious about excluding or expelling members as well as how it conducts business with sellers.
- The 340B law requires that drug manufacturers provide outpatient drugs at special reduced prices to designated covered entities serving underserved and uninsured populations.
- Covered entities may contract with pharmacies to serve their eligible patients; the number of contract pharmacy arrangements has increased dramatically since 2010.
- A 340B contract pharmacy may use either the prepurchased inventory model or the replenishment inventory model.
- A 2014 OIG report revealed that 340B requirements lack clarity and that covered entities differ in their interpretation of the requirements leading to different determinations and inconsistencies.
- Federal law makes it illegal for the covered entity or pharmacy to dispense or sell a 340B drug other than to an eligible 340B beneficiary.
- PSQIA creates a voluntary program through which healthcare providers can share information related to patient safety events with PSOs, and this information is privileged and confidential.
- Self-regulation of the pharmacy profession began in the late 19th century.
- Self-governance continues at the state level, which limits the federal authority over the practice of pharmacy.
- In the United States, pharmacy is regulated through licensure.
- Licensure helps increase the quality of healthcare, reduce the cost of healthcare, and inhibit the criminal abuse of drugs.
- State laws that regulate the practice of pharmacy, often called pharmacy practice acts, create state boards of pharmacy.
- Most board of pharmacy members are practicing pharmacists and represent the spectrum of pharmacy practice.
- Pharmacy boards are responsible for granting licenses to pharmacists and pharmacies, which helps ensure the competence and appropriateness of those practicing pharmacy and the facilities they practice in.
- Licensure by the state boards of pharmacy heavily emphasizes structure and process, with less attention to the outcomes of drug therapy.
- Pharmacy boards determine the standards that must be met for licensure, which may vary between states.
- To become licensed as a pharmacist, state boards require specific criteria, including graduating from a pharmacy school, completing internship requirements, passing licensure exams, and being of good moral character.
- Most state boards require passing scores on the NAPLEX and MPJE exams for licensure.
- Most state boards of pharmacy allow pharmacists to transfer their license to practice from one state to another, if certain conditions are met.
- Pharmacists must renew their licenses periodically, which typically require completion of CPE. CPE Monitor electronically tracks CPE and can be accessed for auditing purposes by pharmacy boards.
- State boards of pharmacy also license pharmacies. Some states have different categories of licenses, and most pharmacies are required to have a designated PIC.
- State pharmacy boards must confront how or whether to regulate nonresident pharmacies that do not dispense and telepharmacy.
- Most states require nonresident (internet and mail order) pharmacies to be licensed within the state they ship medications. NABP has an accreditation process (VIPPS), which requires an active pharmacy domain.
- State boards of pharmacy have discretion on how to discipline pharmacies and pharmacists, which could range from public reprimands, monetary civil penalties, license suspension, and/or license revocation.
- State boards of pharmacy are required to follow disciplinary procedures specified in their state’s pharmacy practice and administrative procedure acts.
- Most states require pharmacists and pharmacies licensed in other states to self-report any discipline. One state may, in and of itself, discipline a license because of discipline in another state.
- Grounds for discipline include providing false information on applications, violation of any statutes or rules pertaining to the practice of pharmacy, court convictions, moral turpitude, unprofessional conduct, and incompetence.
- To help determine what constitutes “unprofessional conduct” or “moral turpitude,” many states provide examples within their rules. Such lists should not be considered all-inclusive.
- State laws may permit the board of pharmacy the discretion to consider reinstating a revoked license.
- Most states have laws in place to assist pharmacists impaired because of drugs or alcohol.
- Pharmacy licenses are subject to the same disciplinary actions and penalties as pharmacist licenses.
- Circumstances may warrant disciplinary action against the pharmacy license or both the pharmacy and pharmacist license.
- States have specific practice standards regarding how pharmacy is to be practiced and who can practice pharmacy in the state.
- How each state legally defines the practice of pharmacy is very important, as it will provide for the scope of practice activities in which pharmacists may participate.
- State-specific practice standards will address how ancillary pharmacy personnel such as pharmacy technicians may be utilized to assist pharmacists in nonjudgmental dispensing functions.
- The current trend for pharmacy technicians in many states is to require registration, licensure, and/or national certification.
- Most states recognize pharmacy students as interns, allowing them to perform pharmacist-only functions while under the direct supervision of the pharmacist.
- States require pharmacists to be on duty while the pharmacy is open; however, pharmacists may be permitted to take breaks in or out of the pharmacy if specific conditions are met.
- All states require pharmacists to complete ongoing CE. CPE Monitor provides an electronic system to help pharmacists, technicians, and state agencies to monitor CE requirements.
- Most states now permit pharmacists to participate in CPAs and many permit pharmacists to prescribe certain medications under state protocols.
- All states now require pharmacists to incorporate prospective DUR into the dispensing process.
- The federal government and some states require pharmacies to take reasonable steps to ensure access to prescription information by LEP individuals.
- Many states have drug repository or take-back programs to allow unused drugs to be recycled for patients that could not otherwise afford them.
- Although some states include controlled substances in these programs, federal law does not consider this legal.
- Drug repository or take-back programs have safety concerns such as adulteration.
- Traditional states laws and rules governing pharmacy practice were specific to community pharmacy, therefore requiring states to amend or pass additional laws regarding pharmacy practice in the hospital setting.
- Hospitals often utilize pharmacists outside the traditional pharmacy setting; therefore, some states have implemented laws allowing for expanded roles of pharmacy technicians in hospital pharmacies such as with tech-check-tech systems.
- States typically regulate pharmacy services provided to LTCFs.
- Pharmacy services and products provided to LTCFs must also comply with all legal requirements of prescriptions.
- The majority of prescriptions dispensed across the country involve a third-party prescription plan, now called PBMs.
- Due to numerous insurance concerns such as inadequate reimbursement rates and unfair audits, the pharmacy profession pursued state legislation to remedy their concerns; however, many of the state laws passed were later preempted by the federal law ERISA.
- Many states have freedom of choice laws allowing pharmacies to participate with third-party plans (PBMs), if the pharmacy agrees to the plans’ terms as well as allowing beneficiaries the right to choose any participating pharmacy.
- Due to concerns with managed care formularies, many states regulate plans and require disclosure to consumers regarding formulary policies and procedures.
- In recent years, there has been an increase in state laws being passed seeking transparency surrounding PBM practices, especially regarding drug pricing.
- State boards of pharmacy primarily regulate for structure and process, not outcomes.
- A pharmacy that meets all regulatory standards for structural requirements and has good processes is a danger to public health if its outcomes are bad.
- CQI laws are one example of a shift toward outcomes-oriented healthcare in pharmacy.
- Negligence is classified as a tort, which is a civil wrong, not a criminal wrong.
- Malpractice law serves to compensate victims and deter people from acting carelessly and irresponsibly toward one another.
- Most pharmacy malpractice cases do not reach a jury verdict, but instead settle out of court.
- When a court ruling grants a pharmacy’s motion for summary judgment, the pharmacy is absolved from liability; however, if the court denies the motion, the jury would then consider the facts to determine the pharmacy’s liability.
- Court rulings on preliminary motions may be appealed to appellate courts.
- To be successful in a malpractice action, the plaintiff must prove four elements: duty owed, breach of duty, causation, and damages.
- Pharmacists must use the degree of care that a reasonable and prudent pharmacist would use under similar circumstances as well as exercise the skill generally possessed by a well-educated pharmacist who is considered competent in the profession of pharmacy.
- Whether a pharmacist owes a duty to individuals other than the patient usually depends on foreseeability.
- Regarding dispensing functions, pharmacists are held to an error-free standard.
- Courts have clearly established pharmacists’ responsibility to dispense the correct medication to patients, and evidence of a misfilling error is sufficient for a presumption of negligence.
- To help determine if a standard of professional practice exists and whether the pharmacy/pharmacist adhered to the standard, expert witness testimony is often used to assist in determining whether a breach of duty occurred.
- Expert testimony can assist in determining actual causation or whether the defendant’s conduct was a substantial factor in the harm that occurred.
- Foreseeability is often an important factor in proximate cause determinations.
- Some jurisdictions have adopted the doctrine of “negligence per se,” in which the statute establishes the standard of care.
- Proof of causation requires establishing that the defendant’s action was both the actual cause and the proximate cause of the plaintiff’s injury and damages.
- Malpractice actions require harm to have occurred for damages to be awarded. Actual (compensation) and punitive (exemplary) damages may be awarded.
- Affirmative defenses, including contributory and comparative negligence and statute of limitations, may be used to absolve all or part of a defendant’s liability.
- Vicarious liability means an employer is liable for the negligent acts of its employees.
- As the pharmacist’s role in healthcare has expanded beyond the mechanical dispensing functions, so has the potential for liability when those responsibilities are not met.
- The traditional rule courts have followed in the past and many continue to follow is that the legal responsibility of the pharmacist is confined to following the prescription orders of the prescriber, which does not include a duty to warn patients of a drug’s potential adverse effects.
- Courts increasingly have recognized the expanded role pharmacists perform based on the pharmaceutical care model and have established that pharmacists owe a legal duty to the patient for those expanded functions on the basis of relationship, foreseeability, and public policy.
- Pharmacies or pharmacists that voluntarily assume a greater duty of care to the patient that may not have existed otherwise will be legally responsible to perform those duties properly based on patient expectations.
- Some courts have adopted a modified approach to the issue of whether a pharmacist has a duty to warn the patient based on whether special circumstances exist, including (1) when the manufacturer gives special instructions to warn patients, (2) contraindications, and (3) when the pharmacist has special knowledge of the patient’s medical condition.
- The purpose of risk management activities is to reduce errors, which in turn reduces the pharmacy’s exposure to legal liability and improves patient care.
- Under the doctrine of “corporate negligence,” a pharmacy is legally responsible to develop and maintain a CQI program to ensure “institutional control” over the system of prescription processing.
- A CQI program should include an incident reporting system and periodic review of employees.
- Pursuant to the doctrine of “corporate negligence,” the corporation is responsible for its own actions apart from those of its employees, and failure to develop and maintain an appropriate CQI program exposes it to punitive damages.
- Failures of quality will occur regardless of how good a CQI program is or how hard pharmacists try; as risk managers, pharmacists should do whatever they can to assist a patient in resolving a pharmacy error and minimizing its impact.
- Verbal and written communications by the pharmacist, if done appropriately and cautiously, are positive risk management tools.
- Being correct, complete, concise, consistent, and cautious are recommended approaches to verbal discussions and written notes in patient care that help provide effective risk management.
- Malpractice insurance is a necessity in pharmacy practice.
- In addition to having coverage through an employer, individual pharmacists should also consider purchasing their own insurance policy.
- Malpractice insurance does not typically cover willful violations or illegal acts.
- Pharmacists should read their policies to understand the scope of coverage and make sure it covers all practice activities in which they are engaged.
- Unlike professional malpractice litigation that focuses on a problem with the way a product is used, drug product liability litigation focuses on the product itself.
- The central issue in all product liability cases is whether the product is defective and whether the defect makes the product unreasonably dangerous.
- Most product liability actions are based on three seemingly separate grounds: (1) negligence, (2) breach of warranty, and (3) strict liability.
- Under strict product liability, the seller of a product is responsible for an injury caused by a defective product that is unreasonably dangerous to the user, even if the seller was not negligent in any manner and exercised all possible care in the design, manufacture, and distribution of the product.
- Pursuant to Comment k of § 402A of the Restatement (Second) of Torts, drug products are regarded by law as “unavoidably unsafe” because they cannot be designed any differently and are manufactured in strict accordance with exacting specifications; therefore, defectiveness in drug product liability is concerned primarily with the adequacy of the warning, that is, whether the warning was defective.
- Under the “learned intermediary doctrine,” manufacturers are required to warn the physician (the learned intermediary), not the patient, of the drug.
- The learned intermediary doctrine rests on the fact that the prescriber selects the drug for the patient, knowing the risks of the medication communicated by the manufacturer. The doctrine can be a defense for manufacturers, but not prescribers, from liability when a patient is harmed by a drug.
- Recent cases have determined that FDA-approved drug labeling preempts state court product liability claims for generic products, but not for brand name products.
- For retail pharmacists sued under strict product liability, the outcome might depend in some courts on whether the court views dispensing a prescription drug product as a sale or incidental to a professional service.
- There is a body of case law in which pharmacists have been joined as a defendant in drug product liability cases. Generally, to date, courts have determined that pharmacists can be held liable for malpractice, but not for strict product liability.