Looking Back: Pharmacy Issues in 2019
January 30, 2020
Intro: This is the Darshan Talks Podcast, Regulatory Guy, Irregular Podcast with host Darshan Kulkarni. You can find the show on twitter @DarshanTalks or the show’s website at darshantalks.com.
Darshan: So the number one issue I would talk about is the rise of cannabis. And as you may know, and there are numerous talks that I’ve put out there already. There have been several states that actually have legalized the use of medical cannabis. There have also been States that have legalized the use of recreational cannabis.
Darshan: However, you should also consider that simultaneously there is a federal law that makes the general use of what we call medical cannabis to be illegal. On the other hand, there are concerns, well there are some advantages in that you have the Farm Bill which goes out there and actually says that in specific situations you can actually wind up using CBD in specific scenarios. It’s important to recognize what that means.
Darshan: For example, if you’re making claims, medical claims using CBD, you’re probably going to have problems. There have been numerous citations for companies that are making medical claims. If you’re a pharmacist either selling them or making medical claims for CBD, stay tuned, be careful, there may be issues. There have been in the last year. The FDA itself has actually taken a more proactive role. They’ve gone after CBD companies and THC companies for misbranding and adulteration issues, so stay tuned, look out for those as we continue.
Darshan: The next issue that’s popped up over time has been the issue of telepharmacy. Telepharmacy is, as some of you may know, is the use of, I think I’m going to call it Skype, or call it some of these web conferencing services. Obviously it’s not as simple as that because you have some protection issues that have to kick in. But using a tools like Epic, people are using ways to virtually consult and connect with patients, with other pharmacists, to provide better care to their patients. There has been a rise of this primarily in the West Coast and in the Midwest. I would expect that you would see the East Coast starting to join this more and more. The East Coast tends to be a little bit more conservative, so we’ll see how that plays itself out, but there has been a rise in uptake for telepharmacy as well.
Darshan: The next thing to think about is the TCP and unwanted calls. So essentially if you’re using unsolicited auto dial calls, you may have concerns under the TCPA. CVS Pharmacy agreed to pay $50 million to resolve 8 class action claims that had made unsolicited auto dial flu shot reminder calls to consumers. This went out to about 230,000 individuals and they were called with a message offering a CVS Pharmacy shopping pass during this flu shot reminder calling campaign. So again, when big players like CVS are being targeted, if you are using auto dialing if you will, as part of your marketing campaign, be very careful as a pharmacist.
Darshan: Next comes the issue of privacy. California has passed its own version of what’s called GDPR. That was a European privacy law and it’s called CCPA. If you are a California pharmacy, you should be careful with patient information anyways for HIPAA, but again, you may want to be careful with it under CCPA as well. I recognize CCPA has certain exceptions for HIPAA, but whether your use is contained within that exception is still up for grabs. So again, if you have questions about what that means for you as a pharmacist, feel free to reach out. I’d be happy to talk t
Darshan: Another issue that pops up is if you are a large conglomerate of pharmacies, one of the big things that you need to start thinking about is how are you going to keep your executives from moving? Because again, as a pharmacist, one of the things you want to do is go after the best place you can get paid. There was a CVS executive who tried to do that and essentially what they were told, a Rhode Island federal court judge actually pushed back because this individual was moving over to Amazon’s mail order service and apparently violated his non-compete.
Darshan: Again, if you have individuals like this, you might get the sense of, “Oh you know what that means? That I can actually protect my intellectual property. This is going to be great.” However, there have been numerous other situations where the courts have pushed back against non-competes for being over broad. So what does it mean in your specific state? You need to be aware of it. You need to make sure that your contract controls it. What a lot of lawyers do in these specific situations is they’ll say, “You know what? If you as a judge decide that you don’t like it, just delete that one part and everything else remains enforceable.” There have been states where the judge basically said, “You can’t put it on me to decide what your contract should be. You need to do your own work.” So, you’ve got to sort of balance this all out. How are you going to play it as you continue?
Darshan: What’s going to also be interesting is that in December in 2019, HHS for the first time unveiled proposed regulations at letting states import prescription drugs from Canada. You actually have to submit a proposal to the FDA for authorization to import and then be given a new NDC code. And group of governors from Maine, Colorado, Vermont, and New Hampshire, have already expressed interest in this new pathway. And again this sort of goes in simultaneously with some of the other ideas that President Trump has around drug costs. That specifically talks about things like most favored nation status where you can cap the cost of drugs based on the lowest one paid in certain other countries.
Darshan: The administration was also looking to finalize a international pricing index that would slash reimbursement by pegging it to prices offered in other developed countries as well. So stay tuned. There’s going to be a lot of work around both drug importation and drug pricing, so that should be interesting as we continue as well.
Darshan: If you are a pharmacist another thing that’s … well let’s sort of catch up. We’ve got cannabis, the rise of cannabis. You have telepharmacy. You’ve got TCPA and unwanted calls. You have the issue of privacy and what that means in California for example, and again, if you’re not in California, don’t think that you’re actually on Easy Street There are I think about seven other states that are considering various versions of laws that look at patient and individual privacy. The idea of non-competes and how that should be written into your contracts with either your pharmacists, your marketing people or your executives. The idea of drug importation, what that means for you as a pharmacist because pharmacies are going to have a lot more control in the context of drug importation.
Darshan: Then let’s talk about another one which is a bipartisan bill was introduced in December requiring that drug manufacturers and distributors and pharmacies actually, well pharmacists, would more frequently report on the use of controlled substances from drug manufacturers and distributors. This would actually impose additional requirements of pharmacies. I believe we used to do it quarterly, it might become monthly. Again, this has broad bipartisan support, so we’ll see how that goes, as well. So stay tuned for that piece.
Darshan: And again, if you are following Surescripts saga, the FTC actually sued Surescripts in DC Federal Court. It alleged the company used contract terms and other tactics to illegally maintain a monopoly on electronic prescription services. The result of that was there was a riot. Surescripts was trying to allegedly preserve it’s 95% market share to markets and this resulted in what the FTC called vertical and horizontal restraints to preserve its monopoly position.
Darshan: FTC alleges that Surescripts did this in four ways. One is the use of loyalty contracts, preventing competitors from attaining the critical mass that would be necessary to be a viable competitor in either routing or eligibility. The use of alleged threats and other non-merit based competition to further ensure no competitors could emerge, this was some of their own executives, referred to them as nuclear missiles. The third prong was the use of anti-competitive methods such as inking a deal with Relay Health, subsidiary of McKesson that resells Sure scripts writing transactions to pharmacies and this provided, really helped with incentives to convince its customers to be loyal to Surescripts. And again, this was another problem. Surescripts obviously asserted that it was reducing the price. It had reduced the price of electronic prescribing by 70% since 2009 but they were removing these loyalty provisions in their contracts with pharmacies. Falconer Pharmacy also proposed a class action lawsuit based on this issue, as well. So stay tuned, we’ll see how Sure scripts goes. I think it’s going to be really interesting as we continue.
Darshan: So we had Surescripts, the drama around Surescripts if you will. The DEA proposed bill, drug importation, the use of non-competes, the California privacy law. There was TCPA and unwanted calls. Then there was telepharmacy and what that means and how that’s being adopted. Then the rise of cannabis.
Darshan: As a final issue, this is really not within the US, but a UK pharmacy. We talk about GDPR and we talked about privacy. UK pharmacy got it’s first GDPR fine as well for leaving 500,000 documents in unlocked lockers, unlocked containers at the back of its premises. That obviously means … and they paid a fine for about 275,000 pounds for careless storage of patient data. Now, what does this have to do with us in the US, GDPR perspective? Probably not too much. However, from a HIPPA perspective that is basically the same exact issue.
Darshan: So as I’m sure you guys know, OCR has been looking at fines in the context of not appropriately maintained privacy. What does this mean for you as a pharmacist? What controls do you have? Start looking into those as well. That’s probably a good idea as you continue.
Darshan: If you have questions about what the practice of pharmacy is starting to look like, what does this mean for you? What are some of the issues you might be facing? How do you actually maintain patient privacy? Are you right for cannabis? Is your marketing up to plan or are you going to have other issues? Stay tuned.
Darshan: I’m also going to do another talk on some of the fraud issues that pharmacies have been getting into. There was so much information out there for them for fraud, that I had to do a separate podcast on it. So stay tuned for that as well.
Intro: This is the DarshanTalks Podcast, Regulatory Guy, Irregular Podcast with host Darshan Kulkarni, but you can find the show on Twitter at DarshanTalks or the show’s website at darshantalks.com.