Physician dispensing: Convenience doesn't always equal benefit

March 10, 2016

In this month's trip down Memory Lane, Drug Topics looks back on an article from 2001 that examined the roots of a problem in full flower today.

The January 1, 2001 edition of Drug Topics examined the issue of physician dispensing through the story of a doctor, Azar A. Korbey of Salem, N.H., who reportedly made an additional $20,000 annually by dispensing drugs. Drug Topics asked whether pharmacists had reason to be worried by such physician activity.

Insurance company executives quoted in the article speculated that physician dispensing would save money, reduce hospital costs associated with medication errors, and improve overall patient care.

However, Todd Dankmyer, then a communications executive with the National Association of Community Pharmacists, warned, “Physician dispensing for profit is anticompetitive and basically erodes the traditional checks and balances that exist between physicians and pharmacists to ensure consumers receive the highest quality pharmacy services.”

See also: Bitter-ender holds out against corporate pharmacy

No bargain for patients

While physician dispensing may be convenient, time has shown that it has not been a bargain for patients or taxpayers. For example, consider a Workers Compensation Research Institute (WCRI) analysis of Workers’ Compensation payouts in 2011 and 2012 in Maryland and Pennsylvania.

It found that physicians routinely charged patients prices that were three times as high as retail pharmacy prices. While the price of a particular drug was dropping throughout the marketplace, the study found that physicians were charging patients rates that remained the same or increased.

“In many states across the country, policymakers are debating whether doctors should be paid significantly more than pharmacies for dispensing the same drug,” said Richard Victor, then WCRI’s executive director, in a 2014 press release.

A subsequent WCRI report examined painkiller prescriptions in Florida after that state banned physician dispensing of strong opioids in 2011. It concluded that before the ban, some doctors had prescribed strong opioids unnecessarily.

“Since Florida has banned physician dispensing of strong opioids, the lessons of this study are relevant for the other states concerned about eliminating unnecessary costs in their system while protecting injured workers from unnecessary medical care,” Victor said in a prepared statement last year.