Speakers at Asembia’s AXS23 Summit addressed the challenges associated with conducting pharmacy business as nonresident pharmacy (NRP) laws and regulations are continually introduced. David Skomo, chief operating officer, HealthDyne, and Nick Meza, partner, Quarles & Brady LLP, explored how NRP laws and regulations impact specialty, central fill, and other shared service models and offered potential solutions for these evolving requirements. 

Currently, the industry is experiencing increased demand for shared pharmacy services. Amid this fast growth, there is a need to scale efficiently and understand regulatory nuances, speakers said. 
Four types of shared services pharmacy models were presented for consideration: fulfillment only, full-service mail order, specialty management, and pharmacy studio. 

In a fulfillment-only model, an originating pharmacy provides customer service but outsources backend fulfillment, explained the speakers. The relationship between the originating pharmacy and the fulfillment pharmacy can reach a symbiotic state in this model, where the fulfillment scale and overall capabilities can be built for all organizations involved. Business continuity can also be improved, speakers said.

“What is really key is a real-time interface between the pharmacies so that both parties in this equation have a shared database,” Mr Skomo said. 

For full pharmacy management, an outsourced partner handles the end-to-end pharmacy process. After a prescriber submits a prescription, the pharmacy partner completes intake, review, fulfillment, packing and shipping, and other tasks. This strategic partnership relies on analytics and detailed reporting.

Within this model, there is an opportunity for specialty management. 

“We may have clients that have a nondispensing pharmacy, and they want to do some of the customer service work, patient care services, copay assistance, that type of thing,” Mr Skomo said. “We really curate the experience for our customers based on their particular needs.” 

Lastly, Mr Skomo laid out the pharmacy studio model. In this arrangement, the pharmacy is owned by a company but managed by an outsourcing partner. The outsourcing partner handles regulatory and state licensing and provides pharmacy functions such as scale and automation for backend fulfillment efficiencies and inventory procurement. 

“The pharmacy studio sometimes can be thought of as a pharmacy management agreement,” Mr Skomo said. 

The speakers said these various, dynamic models can lead to regulatory issues. These issues are especially difficult to grasp at times because state boards are constantly adjusting to keep abreast of industry participants’ innovation.  

“A number of health care entities have been, of late, seeking to associate…with some form of pharmacy services,” Mr Meza said. “We're seeing an increase in the trend of large pharmacy central fill and shared service entities being asked to engage in white-label services across the industry.” 

These requests often involve a non–pharmacy-specific entity asking that their brand and marketing materials appear on a prescription label, which may require a second National Provider Identifier (NPI) or National Council for Prescription Drug Programs (NCPDP) number. Mr Meza said the legal requirements of white-label services can differ greatly from state to state. 

In a fictitious example, Mr Meza described if Joe's Crab Shack were to expand into a pharmacy model. In theory, if Joe’s Crab Shack provided all required label elements such as patient directions, chemical details, and the dispensing pharmacy’s information, the board of pharmacy would condone any additional information that Joe’s Crab Shack deemed necessary. However, entities may use this opportunity to add their brand’s logo to a prescription label, which could create confusion for patients, Mr Meza said. 

“The risk there is that board’s patients will begin to think that Joe's Crab Shack is actually operating a pharmacy, causing some confusion and perhaps triggering new regulations in multiple states,” Mr Meza said. 
Another potential challenge arises with specialty hubs. As specialty hubs are established to support various manufacturer programs, entities such as telehealth platforms may begin to utilize these models across dispensing networks. This breaks the prescription chain of validity since these hubs do not hold proper pharmacy licensure, Mr Meza said.

“How do you get around some of these legal gymnastics? Get the hub licensed as a pharmacy—in many cases, a nondispensing pharmacy—or obtain some form of agency authorization, either from the patient or from the prescriber,” Mr Meza said.

If licensure is pursued, there may be issues with the availability of a nondispensing pharmacy designation, an increased risk profile for businesses, increased costs tied to staffing requirements, and the potential for additional services to trigger more necessary licensure, speakers said.

For agency authorization, there may be logistical difficulty in obtaining agency designation from the prescriber or patient, speakers said. Additionally, state laws may prohibit agency designation to a legal entity, and designation can be limited to organizations that can receive and/or transmit prescriptions. 

“More and more boards, thankfully, are catching onto this concept and are now issuing nondispensing pharmacy permits that cut down on the requirements of a standard pharmacy. But I would say the majority of states don't have this type of designation,” Mr Meza said.

In states without nondispensing pharmacy permits, Mr Meza recommended contacting an attorney and seeking to obtain a waiver for some requirements. 

Several states have created regulations only for a traditional pharmacy model. Despite these barriers, the speakers anticipated more modernized legislation in coming years due to growing market demand for alternative models. For example, Kentucky recently passed state board modernization regulations after advocacy by an industry coalition, speakers said. 

“That general success, I think, is leading to more and more folks within the industry looking for options in terms of forming a coalition to ask the board…to expressly permit central filler shared services arrangements,” Mr Meza said.