Digital Pharmacies and Other Pharmacy Start-Ups: Legal Challenges and Pitfalls

Even before the current pandemic--which has prompted many to reduce in-person visits to healthcare providers and pharmacies--telemedicine and the digitization of healthcare have steadily increased. A new breed of digital pharmacies, such as Amazon’s PillPack, have emerged, providing convenient access to the medicine and 21st century user experiences. While these pharmacies challenge the model of traditional prescription dispensing, and have garnered the attention of private equity and venture capital investors, they have their own unique set of operational challenges, where laws, regulations, and payor policies oftentimes have not caught up with technological advances.

Digital pharmacies must meet all applicable federal and state statutes and regulations governing the practice of pharmacy where licensed or registered. Digital pharmacies must maintain and enforce policies addressing conflicts that may arise between individual states or between state and federal laws and regulations. They must also address challenges associated with identification of patients, patient privacy and security, and the prescribing of medications based upon telephonic, electronic, or online medical consultation.

In addition, the ongoing pandemic has greatly impacted the practice of pharmacy. Since COVID-19, pharmacies, as well as some regulators and payors, have relaxed their requirements for filling prescriptions and delivery. In March 2020, CMS permitted a relaxing of its refill and extended supply requirements. Further, Part D sponsors can waive prior authorization requirements to Part D drugs used to treat or prevent COVID-19. State boards of pharmacy and state Medicaid programs have also put in place relief measures in response to the pandemic and associated challenges.

Listen as our authoritative panel of healthcare attorneys examines the regulatory challenges and legal pitfalls of digital pharmacies and other pharmacy start-ups. The panel will also discuss legal issues brought on by the current pandemic and public health challenges and offer best practices for compliance.