Pharmacies have been significantly impacted by recent actions and increased scrutiny surrounding telepharmacy practices. Regulatory bodies like the Department of Justice (DOJ), Food and Drug Administration (FDA), and Federal Trade Commission (FTC) are actively investigating and penalizing telepharmacy companies for inappropriate practices like misleading advertising, unauthorized prescription methods, and fraudulent schemes. Understanding these changes and knowing how to navigate them is essential for pharmacies to remain compliant and avoid potential legal and financial repercussions.

Implications for Pharmacies
Recent enforcement actions have highlighted key areas of concern for pharmacies:

1. Advertising Compliance:
   The FTC is enabled under the FTC Act to crack down on telepharmacy companies making unsubstantiated claims via misleading advertisements. Claims can include issues with unsupported health claims, claims about unapproved drugs, non-disclosure of relationships with influencers and more. Pharmacies must ensure their marketing materials are truthful and accurately represent their products and services.
2. Prescription and Privacy Regulations:
   Pharmacies must adhere to strict federal and state guidelines regarding the prescription of controlled substances via telehealth services. Compliance with federal privacy laws like HIPAA, and state privacy laws like CMEA, is crucial.
3. Drug Compounding Issues:
   Pharmacies selling compounded drugs risk falling under the FDA’s jurisdiction, particularly when advertising these drugs in ways that suggest unapproved uses. These practices can expose pharmacies to severe regulatory penalties.
4. Kickbacks and Fraudulent Prescriptions:
   Several DOJ cases have unveiled fraudulent schemes involving telepharmacy executives and investors, who paid or received kickbacks to obtain fraudulent prescriptions and sell unapproved drugs. In 2023, Joelson Viveros an investor in South Bend Specialty Pharmacy (“SBSP”) was alleged to have invested and assisted with a network of pharmacies that sent out unneeded and unwanted expensive medications. Investors in DMERx and associated pharmacies were alleged to have enabled illegal kickbacks and bribes were exchanged for prescriptions. These schemes highlight the importance of comprehensive compliance programs to prevent criminal involvement.

 

 

 

What Pharmacies Should Do

1. Review Marketing Practices:
   Ensure all marketing content complies with FTC guidelines. Disclose relationships with influencers and clearly differentiate between editorial content and sponsored advertising.
2. Adopt Robust Compliance Programs:
   The criminal division of the DOJ has discussed new compliance program requirements and is recommending implementing rigorous policies to prevent illegal kickbacks and fraudulent prescriptions. Regularly audit and monitor prescription practices and staff adherence to compliance policies.
3. Stay Up-to-Date with Regulatory Changes:
   Given the evolving nature of telehealth regulations, pharmacies must continuously monitor federal and state-level regulatory updates and adjust practices accordingly.
4. Conduct Thorough Due Diligence:
   Especially during mergers and acquisitions, conduct comprehensive due diligence to assess potential liabilities and ensure the telepharmacy company being acquired is compliant.

How the Kulkarni Law Firm Can Assist
The Kulkarni Law Firm specializes in FDA regulatory compliance, marketing compliance, and clinical research. We help pharmacies:

• Develop Tailored Compliance Strategies:
  Craft comprehensive compliance programs suited to your pharmacy’s unique structure and needs.
• Conduct Legal Audits and Assessments:
  Assess current practices to identify potential risks and gaps in compliance.
• Provide Regulatory Guidance:
  Advise on specific FDA, FTC, and DOJ regulations, as well as state-specific laws.
• Offer Mergers & Acquisitions Support:
  Conduct due diligence during mergers and acquisitions to identify liabilities and facilitate smooth transitions.

Conclusion
Pharmacies must proactively address compliance challenges and adapt to evolving regulatory expectations. Reach out to the Kulkarni Law Firm today to bolster your compliance programs and protect your pharmacy from potential legal pitfalls.