As a national healthcare and life sciences boutique law firm, Frier Levitt represents Dispensing Physician Practices and Dispensing Physicians throughout the country and has an in-depth understanding of the complexities and nuances Dispensing Physician Practices and Dispensing Physicians face. These Practices and Physicians are confronted with numerous legal complexities based on their unique position and role within the healthcare delivery system. Frier Levitt has developed extensive knowledge and understanding of these unique issues, but more importantly, has consistently achieved successful results for Dispensing Physician Practices and Dispensing Physicians in addressing these issues and challenges, whether they arise from the process of establishing a Dispensing Physician Practice or from disputes with third parties, including pharmacy benefit managers (PBMs).
Dispensing Physician Practices and the physicians working within those practices are referred to by many names or phrases including “in-office dispensing,” “point-of-care dispensing” and “physician dispensing.” This practice is especially pronounced in the oncology setting—oncologists, specifically those in independent oncology practices (as opposed to hospitals), dispense cancer drugs directly to patients under one of two primary practice models based on applicable state board of pharmacy regulations and practices. One type of practice, commonly referred to as a “Dispensing Physician Practice,” is a physician practice that dispenses medication pursuant to the physician’s plenary medical license as permitted by state and federal law. These types of practices do not hold a pharmacy license. The State of New York, for example, permits oncologists to dispense medication directly to patients as part of their medical license. N.Y. Educ. Law § 6807(2)(a)(8). Another prominent type of practice in the oncology space is a practice known as a “Physician-Owned Pharmacy,” which is a practice that dispenses all types of drugs through a licensed retail pharmacy located in the practice. In this instance, the licensed retail pharmacy may be the same entity as the medical practice. This model is similar to a Dispensing Physician Practice with the exception that the physician-owned pharmacy is independently licensed as a pharmacy by the applicable state board of pharmacy and follows all requirements necessary to operate as a licensed pharmacy. The State of Texas is one example of a state that permits oncologists to own and operate a pharmacy. See Tex. Occ. Code Ann. § 102.003.
Whether a Dispensing Physician Practice is operating in the oncology space or in other areas of healthcare and pharmacy, the terms referenced above all share the commonality that prescription drugs are provided to the patient directly by a physician at the physician’s office. This is separate and distinct from traditional pharmacy practice wherein a physician writes a prescription in the office, gives it to the patient, and the patient takes the prescription to the pharmacy to obtain the corresponding medication prescribed. The practice of dispensing prescription drugs directly to patients in a physician’s office comes with numerous benefits for both the patient and the physician and can help improve patient outcomes. For example, many of the medications that are dispensed directly to patients in a physician’s office are among the most complex medications in the country including oncology medications, HIV medications, and other rare diseases that only a few years ago had little or no treatment options. In addition to being complex, these medications are often extremely expensive, have serious (and in some cases potentially life-threatening side effects), and have specialized handling and administration requirements. The ability of a patient to work directly with their physician in taking their prescribed medication is directly tied to an increase in positive outcomes because it ensures proper administration of these drugs to ensure optimal results. Further, in this setting, physicians can respond much quicker when medications are not effective. Despite the potential benefits of this model, the legal framework that permits this practice to take place is exceedingly complex and requires advanced legal expertise to accurately and effectively navigate.
In addition to the practical challenges of navigating the complex legal framework governing Dispensing Physician Practices and Dispensing Physicians, Dispensing Physician Practices also face challenges in dealing with third-party payers including insurance companies, PBMs, and the Centers for Medicare & Medicaid Services (CMS). More recently, PBMs have presented significant challenges for Dispensing Physician Practices. PBMs have become extremely consolidated, resulting in only a few PBMs throughout the country managing the majority of prescriptions. These PBMs have almost complete control over reimbursement within their provider networks, effectively functioning as monopolies on a state or regional basis. As a result, Dispensing Physician Practices are forced to contract with these PBMs on whatever terms the PBMs offer, often resulting in unsustainable reimbursement. Moreover, PBMs have also created many obstacles to gaining access to PBM created pharmacy networks. In some instances, PBMs do not grant Dispensing Physician Practices access to their pharmacy networks based on arbitrary distinctions in how the practices operate. In other instances, PBMs attempt to improperly terminate Dispensing Physician Practices from their networks. Improper denial of access to PBMs’ pharmacy networks, as well as improper terminations, directly interfere with patient care and patient outcomes and should not be tolerated. In addition to Frier Levitt’s comprehensive understanding of the legal framework governing these practices, Frier Levitt has an in-depth knowledge of the laws governing PBMs vis-à-vis Dispensing Physician Practices as well as the various PBM contracts between PBMs and the providers participating in PBMs’ pharmacy networks. Frier Levitt offers expert legal advice to Dispensing Physician Practices and Dispensing Physicians regarding these various legal issues.
Frier Levitt represents Dispensing Physician Practices and Dispensing Physicians in numerous legal matters throughout the United States, including at the state and federal level as well as in transactional and litigation matters. Frier Levitt has legal expertise, including in the areas of licensing issues, state board of pharmacy matters including legal representation in connection with state board of pharmacy proceedings, network access issues including challenging PBMs’ improper denial of network access and network termination issues, and issues related to reimbursement. Many Dispensing Physician Practices may also unfairly face increased scrutiny by PBMs, and Frier Levitt stands ready to challenge issues arising from unwarranted PBM scrutiny, including audits and investigations. Frier Levitt also has a wealth of experience in assisting Dispensing Physician Practices in other related legal matters, including transactional matters related to establishing a Dispensing Physician Practice, change-of-ownership matters, as well as mergers and acquisitions—matters which can prove to be even more complex in this highly regulated space.
Frier Levitt’s legal services related to Dispensing Physician Practices and Dispensing Physicians include:
Review and negotiation of pharmacy benefit manager (PBM) contracts, provider agreements and manuals
Frier Levitt provides tailored solutions to our clients backed by nearly 20 years of experience in the healthcare and life sciences industry. For more information, contact Frier Levitt today to speak with an attorney.