Pharmacy Exclusions: When the Corporate Pharmacy is the Judge, Jury and the Executioner

Healthcare practitioners who prescribe controlled substances already face a litany of regulations and scrutiny from the federal government, state government, law enforcement, and insurance companies every day. What may surprise you is that corporate pharmacies can also restrict your right to prescribe controlled substances even if your medical and DEA license is valid and in good standing, without evidence or even due process.

If you think this is not possible, allow me to share with you the actual wording of a letter one of CCG’s clients received from a large corporate pharmacy:

We regret to inform you that *** Pharmacy including its parent company, The *** Co., and its affiliates and subsidiaries will no longer be able to fill controlled substance prescriptions (Schedule II - V) prescribed by you.

In an effort to meet our compliance obligations, our pharmacists' corresponding responsibility under 21 CFR §1306.04, and to help ensure patient safety and combat prescription drug abuse and diversion we may review prescriptions and quantities of controlled substances purchased and dispensed at particular pharmacies as well as the prescribing patterns, practices and government investigations of certain practitioners for which we are filling for. To the extent we identify quantities, doses and/or other prescribing practices or circumstances that raise concerns, we may take various actions including not filling controlled substance prescriptions written by certain practitioners.

In reviewing your controlled substance prescribing patterns and other factors, we must unfortunately let you know that we intend to cease filling-controlled substance prescriptions (Schedules II - V) prescribed by you effective October 13, 2023.

We regret any inconvenience this may cause to you or your patients. Please direct any additional information you would like to provide to *** Pharmacy - Attn: ***.

Why Pharmacy Exclusions Occur

Imagine that you, as a legitimate health care practitioner, receive one of these letters and your patients can no longer fill their medically necessary medications at the pharmacy. It has happened to several CCG Healthcare clients in the past. Let’s assess why this may occur:

1. Some corporate pharmacies utilize an algorithm that scans for prescribing patterns and/or compares your controlled substance prescribing to the controlled substance prescribing of other practitioners in your geographic region. Practitioners who prescribe more controlled substances than their peers (even if they are in a rural area with limited practitioners) or have a large patient population of “legacy-controlled substance patients” are then targeted for arbitrary pharmacy exclusion.

2. The DEA, State Medical Licensing Authority, or another Law Enforcement Agency has served the pharmacy with a subpoena, or search warrant, and/or is asking the pharmacy about your controlled substance prescribing related to an investigation of your practice.

But what happens if you simply ignore this pharmacy exclusion? What happens if you were to ask your patients to move their controlled substance prescriptions to a different filling pharmacy?

1. By allowing this possibly unlawful pharmacy exclusion to remain in effect it is common that other corporate pharmacies follow suit with their own exclusion as they learn you have been excluded by their competition.

2. By allowing this possibly unlawful pharmacy exclusion to remain in effect it can later be used as possible evidence in an administrative, regulatory, or criminal unlawful controlled substance prescribing case against you. The government can use the fact that pharmacies refuse to fill your prescriptions as evidence of possible controlled substance prescribing for non-medical usage.

How CCG Can Help

Chapman Consulting Group has assisted numerous healthcare practitioners in removing these arbitrary pharmacy exclusions by conducting and formulating the following plan:

Our healthcare compliance experts first conduct a detailed compliance investigation of your practice and medical records to ensure you comply with state and federal controlled substance prescribing laws and rules.

Our experts then create compliance recommendations to improve documentation and overall controlled substance compliance.

Next, an expert report is drafted that can be sent to the pharmacy for reconsideration of your exclusion based on actual evidence, medical facts, and expert opinion.

Finally, we assist specialized healthcare attorneys in filing a federal court action against the pharmacy that is unlawfully excluding your medically necessary prescriptions with expert testimony and litigation support.

Our Results in Pharmacy Exclusion Cases

Here are a couple of examples of how Chapman Consulting Group has successfully assisted in the removal of unwarranted and or unlawful pharmacy exclusions:

1. The case of a reputable and dually licensed and board-certified pain management specialist in the state of Kentucky, who faced a permanent pharmacy exclusion from CVS Corporate Pharmacy. Chapman Consulting Group conducted a thorough compliance investigation of the practice and later drafted an expert report that was utilized by attorneys at a corporate-level appeal hearing. Even though the physician’s attorneys made a compelling case to remove the arbitrary exclusion, CVS corporate refused to remove it. Chapman Consulting Group assisted legal counsel with an expert report and litigation support for a federal court action that not only resulted in CVS Corporate Pharmacy removing the exclusion but also awarding him attorney fees. Chapman Consulting Group later also successfully assisted the provider’s attorney with a full acquittal of federal controlled substance prescribing crimes.

2. The case of a reputable, experienced, and dually licensed physician located in the state of Texas who was facing unwarranted pharmacy exclusions from several corporate area pharmacies including CVS and HEB Pharmacies. Chapman Consulting Group Experts conducted a thorough compliance investigation of the practice and later drafted an expert report and provided testimony that was utilized by the physician’s attorney at a corporate-level appeal hearing for CVS and HEB that successfully resulted in the lifting of the pharmacy exclusion.

If you are a healthcare practitioner who is facing or has already been the victim of a Corporate Pharmacy Exclusion, contact the Healthcare Compliance Experts at the Chapman Consulting Group today to help restore your good name and protect your license and practice.