Legal Briefs: Lawsuit Launched, Pharmacist Arrest, and More

Lawsuit Launched Against Montana, One of Six States Banning Doctor Dispensing

“Doctor dispensing,” the practice where physicians dispense the medications they prescribe and bypass the patient going to a pharmacy, is becoming increasingly common across the country. Forty-four states allow it, and over half of physicians, report dispensing in their daily practice. But some states frown on it – concerned by claims from pharmacists that it is unsafe to remove pharmacy’s system of checks.

Six states ban patients from getting their medications directly from the physicians prescribing them: New Hampshire, Massachusetts, New Jersey, New York, Texas, and Montana. Three Montana physicians, together with the Institute for Justice, have filed a constitutional lawsuit seeking to strike down the state’s ban on doctor dispensing.  

In a recent op-ed in The Missoulian, the physicians stated their position. “In recent months, states across the country have rolled back scores of unnecessary regulations that were preventing patients from obtaining much-needed medical care. Montana’s law banning doctors from dispensing prescription medications should be next.”

NJ Affirms Prohibiting Doctors from Referring Patients to Affiliated Pharmacy, Even in Same Office

In an important ruling, the Appellate Division of the Superior Court of New Jersey has sided with the state’s Board of Pharmacy and held that an in-house physician-owned specialty pharmacy would violate New Jersey’s Codey Anti-Referral Law.

The case ended up in Superior Court after Summit Medical Group appealed from the final decision of the State Board of Pharmacy denying its application for a specialty pharmacy license. The medical group intended to establish the pharmacy in the same building where its oncology practice was located. The pharmacy was to be wholly owned by the physicians who own the medical practice, and the pharmacy would have only filled prescriptions written by the medical group’s physicians for its patients.  The Board of Pharmacy concluded the that proposed pharmacy would violate the Codey Law, which prohibits physicians from referring patients to health care services in which they maintain a financial interest.

The medical group made many arguments before the Board as to why the on-site pharmacy would be beneficial to its patients and noted that revenue generated by the pharmacy would not be used to pay the referring physicians.  In its argument, the medical group argued that the proposed pharmacy would fall into an exception to the law, which allows for “a medical treatment or a procedure that is provided at the practitioner’s medical office and for which a bill is issued directly in the name of the practitioner or the practitioner’s office.” In support of this, the medical group explained that the pharmacy would bill under the same tax identification number as the medical practice. The Board disagreed, and the medical group appealed to the Superior Court.

The Court sided with the Board of Pharmacy, holding that the so-called “in-house” exception to the Codey law did not apply because the dispensing of medication by a pharmacist pursuant to a valid prescription “is neither medical treatment nor a medical procedure.” This decision is important because the application of the Codey law in many situations had been murky, and this has made clear that in New Jersey, dispensing prescribed medication does not amount to medical treatment.

New York Pharmacist Known as the “Mask Man” Arrested in N95 Scheme

A New York pharmacist is facing over 20 years in prison after being arrested for numerous allegations. The most shocking allegation is that the pharmacist, Richard Schirripa, purchased and hoarded at least $200,000 of 3M N95 masks between February and April 2020, and then sold them at highly inflated prices. Schirripa was alleged to have sold most of the masks out of the trunk of his car, for as much as a 50% markup. Authorities said that the pharmacist’s hoarding of the masks was a violation of the Defense Production Act, signed into law by President Trump during the early part of the Coronavirus pandemic, when personal protective equipment was in short supply. His customers were in eight states and included funeral homes and doctors.

Schirripa faces other serious, but unrelated, charges stemming from an investigation of the closure of his pharmacy. He allegedly told the Drug Enforcement Agency that as part of the closure, he had disposed of all controlled substances that the pharmacy possessed. Instead, however, Federal agents found thousands of controlled substance pills and patches including fentanyl, oxycodone, and oxymorphone, in a safe in Schirripa’s home. In all, nearly 4,000 pills and patches were recovered. He also is accused of Medicare and Medicaid fraud in billing for the controlled substances which he had in his home.

“There is no place in our city for a licensed pharmacist to allegedly victimize New Yorkers, especially at a time when people’s priority is their health and safety,” said DEA Special Agent in Charge Philip R. Bartlett in a press release.

Ann W. Latner, JD, is a freelance writer and attorney based in New York. She was formerly Director of Periodicals at the American Pharmacists Association.