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January 23, 2015

Physician Dispensing: I’ve Changed My Mind

Summary:

The reason: the recent WCRI report showing that re-packagers and doctors are evading rules designed to keep drug costs down.

Photo Courtesy of Chris Potter

In the past, I’ve argued that there are legitimate reasons a doctor might dispense medications to a patient and that legislative and regulatory efforts to curb abuses of physician dispensing should be focused on the elimination of the financial incentive to do so while preserving the practice for the limited circumstances in which it might be necessary.

I’ve changed my mind.

The WCRI report published recently makes it crystal clear that the creativity of physician dispensers will always lead to maximization of revenue (and clearly inappropriate utilization of medications) unless the practice itself is eliminated.

The report shows that, essentially, drug re-packagers in California created novel dosages of certain medications to evade the constraints of the physician dispensing regulations. This allowed them to return to the typical physician-dispensing practice of creating new NDC codes and charging exorbitant amounts of money for drugs that would be have been substantially cheaper had they been secured through a retail pharmacy. Worse, utilization of these medications skyrocketed as a result of the revenue incentive for physicians (my conclusion, not WCRI’s).

Physician dispensing doesn’t make sense. Not in any circumstances. I could see a potential allowance for a one-time, short-term fill, but the routine dispensing of medications by physicians to patients should be banned. Immediately.

(Disclosure: PRIUM, and our parent company, Ameritox, provide financial support to WCRI).

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About the Author

Michael Gavin is president of PRIUM. He is responsible for the strategic direction and management of the medical intervention company. He brought considerable experience in several major sectors of the health care industry to PRIUM when he joined as chief operating officer in 2010, and he is the author of the thought-provoking Evidence-Based blog.

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