Update: Will Physicians Soon be Allowed to Dispense Drugs in Texas?

Texas is just one of four states nationwide where physicians are not able to dispense medicine onsite, but a number of organizations are hoping to change that during 2019’s legislative session.

A statewide coalition of employers and healthcare providers called the Texas Employers for Affordable Medications (TEAM Rx) is working to change the law and give patients the option of filling certain common prescriptions right at their doctor’s office rather than their local pharmacy. The DFW Business Group on Health, Texas Business Group on Health, Texas Academy of Family Physicians, Fort Bend County, and others make up the coalition.

A Pew study found that spending on retail prescriptions rose by nearly 27 percent between 2012 and 2016, while a big share of premiums went toward pharmacy benefits. Pharmacy revenues nearly doubled from $30.8 billion to $76.9 billion during the period. Drug manufacturer rebates more than doubled from $40 billion to $90 billion during the same period, with pharmacy benefit managers passing 91 percent of rebate on to payers in 2016. But other revenue, such as administrative fees, shot up which took a chunk out of savings.

Because those numbers exist while 46 other states already allow physicians to dispense drugs, the Texas law is unlikely to take a huge dent out of those profits, but Texas represents a sizable amount of healthcare spending nationwide, so there is resistance from pharmacies and pharmacists.

Texas House Representative Tom Oliverson is an anesthesiologist from northwest of Houston, and authored House Bill 1622 that would allow physicians to distribute medicine at their office, urgent care clinics, or worksite clinics.

Current Texas law says that a physician can dispense up to three days worth of medication if there is an immediate need, and allows the physician to dispense medicine in certain rural areas where access to pharmacies are limited. Until recently, there was an agreement between physicians and pharmacists to not intrude on the other’s responsibility, says Tom Banning, CEO of the Texas Academy of Family Physicians. But retail pharmacies have begun hosting clinics and healthcare providers at their locations.

The bill is currently in the Texas House of Representatives, but with the focus on school finance, Banning knows there is a challenge to get the bill through. “I give it a 30 to 35 percent chance of passing, but it is an important conversation in terms of drug costs and oversight.”

The measure would allow for physicians to counter retail pharmacies’ move to install clinics and providers onsite, allowing both prescribing and dispensing of drugs to happen in either place.

The bill could address the number of unfulfilled prescriptions, which could cause hospital readmissions and other side effects. An Annals of Internal Medicine survey in 2014 found that 31 percent of 37,000 prescriptions for 16,000 patients weren’t filled.

Supporters of the bill say it would reduce cost and improve convenience, cutting out the extra step of finding a pharmacy. TEAM Rx says that missed prescriptions cost the country more than $330 billion each year in increased healthcare costs. Allowing physicians to dispense medicine, they say, will close the gap and make sure patients have the medication they need.

Proponents also note that physicians are able to buy medication at wholesale cost and aren’t allowed to sell them to patients for anything more than they purchase the drugs. The bill isn’t meant to let physicians make money on the transaction, and the wholesale cost is almost always cheaper than the patient could get through their insurance or for cash at retail pharmacies. The bill seeks to battle the price increases that occur with retail pharmacies and pharmacy benefit managers.

An analysis by Northwind Pharmaceuticals, a drug distribution company, showed that employers saved 50-60 percent on purchasing drugs directly from the doctors compared to a retail pharmacy. The savings were reflected in the lower wholesale costs as well as the elimination of copays at the pharmacy.

The bill would only allow physicians to distribute often generic common medications with low risks of abuse, and they must be properly packaged, labeled, and stored just as they would at a pharmacy. It would also make physicians notify patients that their medicine can be obtained at a pharmacy if they wish.

But opponents of physician dispensing worry that the bill could produce safety concerns without an extra check by a pharmacist and software that looks for prescribing errors. A 2015 paper in Pharmacy and Therapeutics by registered pharmacist Matthew Grissinger also says allowing physicians to dispense medication “may lead to lax procedures for medication labelling, record-keeping, storage,” and asks questions about doctors making profits from the sale of the medicine. In 2012, a study from the Workers Compensation Research Institute looked at states that allowed physician to dispense drugs in workers’ compensation systems and found that most of the drugs prescribed by doctors were 60 to 300 percent more expensive per pill than at retail pharmacies. Some physicians charged 5-15 percent more than national pharmacy retailers. Pharmacists say they are better equipped to educate patients on how different medicines might reach with one another or their side effects. In 2011, Senate Bill 546 was met with opposition from pharmacists and died in the Texas House of Representatives.

A study from the University of Utah showed that physician-dispensed medication had the same rate of adverse reactions as pharmacy dispensed nationwide. The Texas Public Policy Foundation has endorsed the HB 1622 as well.

The bill is currently in the Texas House of Representatives, but with the focus on school finance, Banning knows there is a challenge to get the bill through. “I give it a 30 to 35 percent chance of passing, but it is an important conversation in terms of drug costs and oversight.”

Dr. Scott Conard is another proponent and taking on what he calls one of the most powerful lobbies in the country in the pharmacy industry, and is CEO of Converging Health, an employee health and benefits consulting company. “We need to increase  competition and increase opportunities for patients to get their medication and at the best price possible,” he says.  “For the people of Texas, more competition and better free enterprise system will serve their system.”

Update: After the article was published, Chief Executive Officer of the Texas Pharmacy Association licensed Texas pharmacist Debbie Garza responded with the comments below.

In regards to the HB1622, they are not in favor for safety reasons. “The Texas Pharmacy Association is opposed to physician dispensing and believes the practice puts patients’ health and safety at risk.” Garza says. “The proposed legislation provides no oversight nor checks and balances put in place by the Texas Legislature and the Texas State Board of Pharmacy.”

In terms of cost, the TPA is worried about conflict of interest and increased drug prices. “If physicians prescribe and sell medications, an inevitable conflict of interest exists. A 2018 Public Consulting Group study concluded that despite numerous reforms by states, cost remains a major issue with physician-dispensed medications. The study showed medications dispensed by physicians cost patients more than those dispensed by pharmacies,” Garza says.

The TPA notes the abundance of pharmacies throughout the state as well as the ability of pharmacies to deliver medication. “There is no shortage of pharmacists or pharmacies in most areas of Texas. Pharmacies routinely deliver medications to patients who cannot make it to the store,” she says.

For the TPA, safety is their main concern. “Patient safety is a top priority, and pharmacists are the medication experts,” she says. “Pharmacists know all the medications a patient is taking and how those medications interact. They are trained in the side effects. Physicians do not necessarily have the full patient history or depth of knowledge of various medicines. A study by the Institutes of Medicine showed that adverse drug events that harm patients most often originate from prescriber errors. At least half of those errors are caught and corrected by pharmacists.”