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Questionable Expansion of State Pharmacy Board Regulatory Activities

In an excellent piece published in the BNA Pharmaceutical Law and Industry Report, “Confounded in Compounding Apothecaries: The Critical Need for Confining State Pharmacy Boards to Self-Regulation,” William G. Schiffbauer takes a close look at state pharmacy boards and the conflicts of interest and other problems that have arisen in connection with recent expansions of their activities. 

He finds that pharmacy boards, mostly made up of pharmacists, have strayed from their core mission of “self-regulating” pharmacists – that is maintaining the competence of professional pharmacists and identifying and disciplining problem pharmacists.   An example of inappropriate pharmacy board regulatory activity is the regulation of compounding pharmacies such as the New England Compounding Center whose negligence is reported to have caused 44 deaths and sickened 678 people in 19 states.  Schiffbauer notes that it took 25 deaths and 344 injuries to “move” the Massachusetts Board of Pharmacy to adopt emergency regulations – long after the facts were known and after similar tragedies had already occurred.  According to Schiffbauer, compounding pharmacies act more as pharmaceutical manufacturers than as local pharmacists, and pharmacy boards have neither the resources nor the competence to regulate pharmaceutical manufacturing processes.

Another striking area where pharmacy boards have strayed is in seeking to regulate pharmacy benefit managers (PBMs).  Schiffbauer suggests that in doing so, pharmacy board members are seeking to optimize their own incomes rather than exercising legitimate state police powers.  He cites recent Federal Trade Commission staff comments that giving the Mississippi Board of Pharmacy the power to regulate pharmacy benefit managers “would create tensions and conflicts of interest for the pharmacy board.”  The FTC was blunt in its assessment – it said giving the Mississippi Pharmacy Board this power would be “likely to increase prescription drug costs and reduce competition.”  The FTC also noted “that the antitrust laws recognize that there is a real danger that regulatory boards composed of market participants may pursue their own interests rather than those of the state.”

Schiffbauer makes the case that state pharmacy boards should be confined to appropriate self-regulatory activities.  He makes several suggestions for “reforms for states to consider if they want to retain the state primacy of regulating the ‘practice of pharmacy.’” 

Quis custodiet ipsos custodes?

  1. C. Callihan.
    C. Callihan.02-05-2013

    If PBMs are to be regulated by states, it makes sense that the appropriate agency should, in fact, be the State Boards of Pharmacy. To suggest that pharmacist Board member oversight would lead to increased drug costs is ludicrous. Current State-based rules/regulations being seen and proposed do not regulate pricing, but rather the practices within our industry. Practices that often prove counter to the best interest of plans or plan members. For example: If a state were to require fiduciary duty by PBMs practicing within their borders, the cost of healthcare and pharmaceuticals would decrease, not increase. It remains clear that the FTC has little knowledge of drug distribution, nor the adverse impacts precipitated on plans and consumers through their continuing to give tacit approval of PBM ownership of pharmacies.