Recovery for Purchases of Diabetic Testing Supplies from Non-Authorized Distributors in California

Some PBMs require that pharmacies purchase diabetic testing supplies from “authorized distributors.” While the term varies from manufacturer to manufacturer, an authorized distributor is essentially an approved wholesaler that is contracted with the manufacturer to sell and distribute the manufacturer’s product or diabetic testing supply.  Although the requirement to purchase from an authorized distributor is often associated with particular PBMs, such a requirement has also been implemented in some State Board of Pharmacy rules and regulations, namely California’s. Specifically, under California law, a pharmacy must purchase nonprescription diabetic testing supplies from an authorized distributor (Cal. Business & Professions Code § 4301(t),), which must be identified and listed on the California Board of Pharmacy website by manufacturers. Cal. Business & Professions Code § 4160.5. 

In that vein, recently, manufacturers have sought monetary recoveries from California pharmacies who did not appropriately purchase their diabetic testing supplies from an indicated authorized distributor, and instead, purchased from a secondary or tertiary wholesaler, in alleged violation of California law.

How Frier Levitt Can Help

Pharmacies should be aware of such rules and regulations and proactively ensure their own compliance with State Board of Pharmacy rules and regulations, as well as PBM terms and conditions, to avoid any monetary recoveries and penalties. If your Pharmacy has been subject to a monetary recovery from a manufacturer of diabetic testing supplies, contact us for assistance in responding and mitigating any penalties associated with the recovery effort.

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