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Pharmacy Law Trends Q&A: Opioids, Specialty Drugs Among Top Issues for Retail Pharmacies

By Roger N. Morris and Amy Cotton Peterson

The opioid crisis in the United States continues to worsen, with the Centers for Disease Control reporting more than 33,000 human deaths by overdose in 2015 – up from about 29,000 in 2014 and quadruple the number in 1999. As in-house counsel from some of the nation’s 65,000 retail pharmacies prepare to meet in Chicago for Quarles & Brady’s 2017 Pharmacy Law Symposium this July, partners Amy Cotton Peterson and Roger Morris discussed the opioid epidemic. The partners also discussed specialty pharmacies, another important and evolving topic for those involved in the sector in 2017.

Q: Given the severity of the opioid crisis, what are some of the challenges pharmacies are facing?

RM: Pharmacies – an important link in the chain that gets products from the manufacturer to the consumer – are continuing to be criminalized for the dispensing of opioids. This generates significant concerns for the pharmacies and their legal counsel, and some might wonder whether it’s worth it to continue selling opioids at all.

While deciding to discontinue carrying opioids would be a drastic step to take, it’s understandable that some pharmacies might at least entertain the notion, given the overall thorny nature of the issue. It’s worth noting that opioids make up only about 10 percent of all prescriptions.

Going deeper, pharmacies are faced with a lot of difficulties – how do they verify the validity of prescriptions? How do they determine if doctors are overprescribing, and what’s the pharmacist’s responsibility when it looks like they are? How do you work across state lines, given the different rules and regulations in each state? How do you work with different sets of records that might be maintained in a myriad of different ways?

We’ll address these questions, and more, at the Symposium in July.

Q. In what ways are pharmacies trying to address these problems?

ACP: Pharmacies, rightfully, have taken a lot of responsibility and initiative to address the epidemic. The steps they’ve taken include “Know Your Client” initiatives, in which pharmacists and wholesalers track suspicious ordering patterns. Some pharmacies are even using technologies like Google Maps to see if certain delivery locations have the potential to be pill mills.

Going a step further, regulatory requirements and state laws tell pharmacists what has to be on a prescription for it to be valid, but a lot falls on pharmacists’ professional judgment. Because there are gray areas – states don’t always make it easy to know what isn’t valid – pharmacies face some potential liability. To counter that, 49 states, the exception being Missouri, have Prescription Drug Monitoring Programs (PDMP), an electronic database that monitors prescriber and patient activity related to controlled substances such as opioids, for example. Some states have even gone as far as to enact regulations (some emergency) as to how PDMPs are monitored.

Arizona extended the reach of its PDMP by agreeing to share information with 22 other states, but there are major differences in how the data is kept in each state and by each pharmacy. Some states gather the data in real time, others daily and a few only weekly. Each state also identifies patients in different ways so that patient John Smith in Arizona might not be easily identified as Johnathan A. Smith Jr. in New Mexico even though they are the same person.

Big picture, the industry should step back and look at the overall processes from a public health perspective as opposed to a law enforcement perspective. Where’s the demand? Where’s the supply coming from? Where do the drugs end up?

Q: We’ve seen a growing trend with specialty pharmacies in recent years. What are the causes and challenges stemming from this growth?

ACP: Specialty pharmaceuticals, which treat complex and often rare diseases, are expensive and hard to handle, and their use is growing at a phenomenal rate. They’re expected to account for 50 percent of pharmacy revenues by 2020, and some estimates say they’ll surpass traditional brand name drug spend in the next few years. A growing number of hospitals and health systems, including the Cleveland Clinic, Rush University Medical Center and others have or are in the process of integrating specialty pharmacies.

RM: But this growth – which is spurred in part by an aging American population, but also innovation – brings with it a host of different licensure and regulatory issues. There’s also a lot of money on the line, as many of these drugs cost between $30,000 and $50,000 a month. This has generated a lot of excitement among manufacturers and developers, but when it comes to those distributing the drugs – pharmacies, among them – we’re really in a sort of “wild west” period when it comes to regulations.

Q: What are some best practices when it comes to specialty pharmacies that would be useful to pharmacies and their legal counsel?

RM: Specialty pharmacies must strictly comply with all pharmacy laws. Failure to be licensed correctly, at the facility or personnel level, can result in false or rejected claims. When prescriptions cost $30,000 each, a single misstep could eliminate any profit in this area for months. Moreover, specialty pharmacies must be vigilant in their compliance with Anti-Kickback and referral laws. Traditional gifts and benefits to prescribers from yesteryear are today’s inappropriate incentives.

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