History of Physician Dispensing

Physician dispensing- also called point-of-care dispensing- has been around since physicians began practicing medicine. As early as 1271, physicians and pharmacists in France feuded over medication dispensing laws.  In China, physician dispensing was a component of the country’s economic transformations in 1949 and 1979 but became a target of China’s health care reform of 2009.  The discussion has continued since in many countries, and most countries have some form of regulation for physician dispensing.

In the United States, a reemergence of physician dispensing occurred in the early 1980s. Physician dispensing in its present form began in 1982 with the introduction by the Food & Drug Administration (FDA) of regulations that gave approval for re-packaging of drugs. 

Here’s a timeline of its evolution:

  • 1983: The retail pharmacy industry led a nationwide campaign to eliminate the physician’s right to dispense prescriptions. 
  • 1985: Congress passed legislation to secure a physician’s right to dispense FDA-approved medications to their own patients.
  • 1990s: Dispensing systems were in development to make the physician dispensing process fast, easy and cost-effective for providers.
  • 2000s: Physician revenue began declining from historical sources. Declining reimbursements have forced physicians to see more patients for less time, resulting in decreased patient satisfaction and an increase in patients switching providers.  Physicians are more assertively seeking complimentary revenue sources such as in-office dispensing.

When considering implementing a physician dispensary, the number one concern of physicians is whether or not it is legal. Under the Stark Law, in-office dispensing is acceptable when dispensing is limited to the physician’s own patients within the practice environment, and the medications meet FDA guidelines for repackaging and labeling. 

In the United States, all 50 states have regulations governing physician dispensing; 46 states allow physicians to participate in the profit from their practices’ in-office dispensaries. Only five states have more restrictive laws- Massachusetts, Montana, New York, Texas and Utah; in these states, physician dispensing is allowed but limited. Most states do not require anything beyond the physician’s existing DEA and state license to dispense medications; a few states have a designated dispensing license, which is offered at a minimal cost. 

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