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FTC OPPOSITION TO PHYSICIAN DISPENSING RESTRICTIONS

Executive Summary

FTC OPPOSITION TO PHYSICIAN DISPENSING RESTRICTIONS was reiterated in a May 1 letter responding to a request for Federal Trade Commission comments on California Assembly Bill No. 1732. The California legislation would allow physician dispensing only if the nearest pharmacy was over five miles away from the MD's office, the dispensed medication did not exceed a 72-hour supply and no dispensing fee was charged to the patient. Under the California bill, physicians choosing to dispense would have to be licensed by the state Board of Pharmacy. In the May 1 letter to California Assemblyman Tim Leslie, FTC Bureau of Competition Director Jeffrey Zuckerman asserted that the "effect of the bill would be to prohibit physician dispensing in most areas of the state and to eliminate any financial incentive for physicians to dispense in the remainder of the state." Maintaining that the bill is "likely to be harmful to consumers," Zuckerman said that FTC "does not endorse physician dispensing as preferable to pharmacist dispensing. Rather, we support consumer choice among qualified providers of prescription drugs." In a disclaimer, Zuckerman said his comments "represent the views of the [FTC's] Bureaus of Competition, Economics, and Consumer Protection, and not necessarily those of the Commission itself." However, he pointed out that the Commission authorized the response to the California bill. The letter adds, "The Commission's staff has been investigating restrictions on competition in the sale of prescription drugs and has examined proposals by some members of the pharmacy profession to have states impose restrictions on physician dispensing." The FTC letter is the third recent opinion issued by the Bureau of Competition regarding attempts to restrict physician dispensing on the state level. The first two letters were to state regulatory boards in Maryland and Georgia, in which Zuckerman also said that the Bureau of Competition regarded restrictions on physician dispensing as a restriction of consumer freedom of choice, and thus anti-competitive. The most recent letter comes in the face of Capitol Hill efforts to prevent MD dispensing through legislation. On April 23, the House Health Subcommittee approved a markup of Rep. Wyden's bill, which federally restricts physician dispensing to limited circumstances. The Wyden bill, however, would give ultimate authority in regulating and enforcing MD dispensing to the states. On May 6, the full House Energy & Commerce Committee began to markup the Wyden bill. The next markup session is scheduled for May 13.
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