On The Docket
David B. Brushwood, BSPharm, JD
Success with drug therapy requires effective collaboration between many individuals and businesses in the lengthy chain of pharmaceutical distribution. But efforts to prevent controlled substance diversion may lead to confrontation rather than collaboration in the acquisition of needed medications. A recent case from Arizona illustrates how courts may be asked to resolve disputes about access to pharmaceutical products.
Background
A pharmaceutical wholesaler discontinued distributing controlled substances to a family-owned independent pharmacy after determining that the pharmacy “had filled too many prescriptions for oxycodone from a single prescriber.”
The wholesaler “doubted the validity of that prescriber, a nurse practitioner from a nearby pain clinic.” The pharmacy filed a motion for a preliminary injunction to force the wholesaler to continue providing the pharmacy with controlled substances as required under a contract between the pharmacy and the wholesaler.
The wholesaler contended that the distribution of controlled substances to the pharmacy would not be resumed due to “an unreasonable risk of diversion.”
The wholesaler claimed that the contract allowed it “sole discretion” to terminate drug distribution “based on the totality of the circumstances.” The pharmacy argued that enforcement of the contract was subject to legal principles of “good faith and fair dealing.”
The wholesaler argued that it had acted in good faith after having detected two “red flags” that were “identified by the DEA as factors that may indicate diversion.”
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A “high ratio—98%—of the oxycodone prescriptions being filled at the pharmacy were of the 15 mg and 30 mg varieties, which the wholesaler asserts are the strongest and most abused forms of the drug.”
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A “single prescriber ... issued a disproportionately large amount of those prescriptions for controlled substances.”
The wholesaler also claimed that it was serving “the public’s interest in preventing the diversion of dangerous drugs.”
According to the court, there was no evidence that any controlled substances had been diverted from the pharmacy. There was no evidence that any government agency was investigating the pharmacy or “harbors any concern” about the pharmacy.
Rationale
The court determined that the wholesaler had not acted in good faith. The court first noted that “it is unclear whether these two ‘red flags’ alone were enough to give the wholesaler a good faith basis to believe there was an unreasonable risk of diversion.”
There was no evidence that the wholesaler had “engaged in any ‘discourse or dialogue’ ” with the pharmacy prior to terminating distribution of controlled substances to the pharmacy.
The wholesaler did not “ask for an explanation or for any data related to the diversion concerns.” The wholesaler did not report its concerns to the DEA or to the state board of pharmacy. The wholesaler also did not visit or other-wise contact the nurse practitioner.
The court said that the wholesaler “acted abruptly or even impulsively in terminating distributions.” The court concluded: “All told, the record lacks evidence to suggest that the pharmacy posed any unreasonable risk of diversion. Nonetheless, the wholesaler terminated distributions.”
The court acknowledged that there is a public interest in preventing the diversion of controlled substances; however there was no evidence of any controlled substance diversion at the pharmacy.
The court chose instead to emphasize “the public’s interest in protecting small, family-owned businesses, and the local economy,” as well as “the public’s interest in obtaining prescriptions from the pharmacy of its choice.”
The court issued the preliminary injunction, as requested by the pharmacy. The wholesaler was ordered to immediately resume distributing controlled substances to the pharmacy.
Takeaways
Pharmaceutical wholesalers have a legal responsibility to detect and address suspicious orders of controlled substances from a pharmacy. This is a responsibility that cannot be met by examining numbers alone.
The so-called “red flags” of controlled substance diversion are indicative only. They are not determinative. Good faith is at the core of any pharmacy-wholesaler relationship. Good faith requires careful scrutiny, not abrupt impulsivity. ■