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Supreme Court Ruling Means Texas Remains One of Five States in the Country Without Physician Dispensing

After no legislative movement, Texas physicians took their case to the courts to be able to directly dispense medications to their patients.
Courtesy: iStock

Despite taking his case to the Texas Supreme Court, Austin physician Dr. Michael Garrett fell short of forcing Texas to join nearly every state in the country, allowing patients to purchase their medicine directly from their physician. Garrett says the Texas law is economic protectionism supported by the retail pharmacy lobby, while proponents argue that a change would create a safety issue.

Texas is just one of five states that don’t allow physicians to charge patients for medications distributed in their offices unless they become licensed pharmacists. Right now, the law says that physicians can only distribute medications for a three-day supply to meet immediate needs, if the drugs were provided for free, or if the physician is a rural practitioner without access to a nearby pharmacy.

Each legislative session, physician groups and pharmacy lobbies battle in the halls of the Capitol in Austin. So far, no bills allowing physicians to dispense medications have made it out of committee. Garrett, who runs a direct primary care practice in Austin called Direct MD Austin, has long been an advocate for a law change but took to the courts after the legislature failed to move. Garrett and another physician named Dr. Kristin Held sued the Texas Board of Pharmacy and Texas Medical Board to be able to dispense non-controlled substances to patients rather than sending them to the pharmacy.

After Garett filed the case in 2019 with the backing of the libertarian nonprofit public interest law firm Institute for Justice, a Texas appeals court upheld the law in January. When Garrett appealed it to the state’s highest court, the Texas Supreme Court did not grant his case a review, meaning the law will stay as is unless there is legislative movement.

The appeals court ruled that the state has an interest in maintaining the status quo to promote safety by requiring an independent review of a prescription before dispensing by a licensed pharmacist, to prevent conflicts of interest from physicians dispensing the same medication they have prescribed, and to enable effective regulation by limiting the number of dispensing locations.

Requiring a pharmacist who specializes in how medications interact is essential to maintaining safety, advocates argue. In theory, allowing physicians to dispense medications could incentivize them to boost their profits by overcharging patients for the medications they prescribed.

During the trial, Garrett produced an expert witness who spoke about a survey that showed that the states with physician dispensing did not have a higher rate of adverse drug reactions, but the court wasn’t convinced, as the study relied on self-reporting of adverse reactions. Those surveyed also said having multiple professionals oversee a prescription makes the process safer.

The court ruled that the law doesn’t violate the constitutional right of the physicians to pursue a business. “At most, doctors have demonstrated that states have undertaken different approaches to regulating the dispensing of prescription medication and that there may be benefits and detriments associated with either physicians or pharmacists having final authority over dispensing medication,” the appeals court ruling says.

However, other studies have found that physician dispensing is more convenient and more likely to result in medication adherence for some medications. Garrett adds that because physicians can get wholesale prices, they can sell the drugs cheaper than the pharmacies. It is about giving the patient choices between going to the pharmacy and getting medicine in his office, he argues.

For Garrett, the safety arguments don’t hold water because of the law’s exceptions. If the state were actually concerned with safety, he wouldn’t be allowed to give away the medication for free (which physicians are currently able to do), he wouldn’t be able to give away pills for short time periods, and rural physicians wouldn’t be able to dispense medication.

“If it were a safety issue, then the state would say doctors can’t dispense medications because it’s not safe and that we need a pharmacist to do it. But the state is saying doctors can dispense meds without a pharmacist, we just can’t recoup our costs. We have to do it for free, or not at all. It’s more about protecting pharmacies’ interests than making it safe.”

In Montana, the Montana Pharmacy Association admitted as much. With the help of Institute for Justice, Montana became the most recent state to allow physicians to dispense medications in 2021. During the debate, pharmacy advocates admitted that their efforts to defend the ban were nothing more than preserving market share for retail pharmacies.

While scope creep occurs between providers who treat wider ranges of conditions, there is also scope creep between sectors in the healthcare industry. Retail pharmacy advocates want to be able to give vaccinations to a broader range of patients against the protest of physicians. In contrast, physicians want to perform the role traditionally held by retail pharmacies. In both cases, the argument comes down to safety versus convenience. Texas usually leans toward free market legislation, but in this case, the state finds itself at odds with conservative and libertarian forces like the Texas Public Policy Foundation and Institute for Justice, both of whom support a Texas law change.

For now, Texas will remain one of five states where physicians can’t dispense medication to their patients, but Garrett is hopeful that Texas will eventually follow suit. “I think it’s appropriate for physicians and patients and is a win-win. If we are able to get a legislative solution, I’ll continue to support it just as I have year in and year out.”


Will Maddox

Will Maddox

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Will is the senior writer for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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