New Orleans pharmacy history highlights licensure requirement

Ned MilenkovichThe New Orleans Pharmacy Museum sits in the heart of the French Quarter. It was constructed in 1823 for Louis Dufilho Jr., who became our nation’s first licensed pharmacist in 1816. Dufilho was educated at the Paris College of Pharmacy and apprenticed with his father and older brother, who were both local pharmacists in Louisiana. It is noteworthy that in the history of American healthcare, Louisiana was the first state to require licensure for healthcare practitioners, including pharmacists and pharmacies.

When it comes to licensing requirements, the activities of modern pharmacies range well beyond the traditional local dispensing of drugs to patients in the community. As technology and professional innovation evolve, the profession of pharmacy is moving into areas of patient treatment that involve complex compounding methods, specialty pharmaceutical drugs and related supply-chain issues, and even new types of practitioner-administered medications, to name but a few contemporary developments. These areas could all involve additional levels of licensure requirements.

Every activity? Every state?

One area of diligence for any dispensing pharmacy is to determine whether it possesses the proper pharmacy license for the business activity in which it is engaged. Although this would seem to be a basic regulatory compliance issue, pharmacies often overlook their licensing requirements or fail to discover whether or to what extent a license is required for a particular activity.

For example, suppose a retail pharmacy acts as a wholesale distributor of drug product to another pharmacy or even to a healthcare practitioner without an identifiable patient at the time of the drug sale. Depending on state laws and the volume of drug being distributed, such a pharmacy very likely should possess an additional wholesale distribution license, separate and apart from its state-issued retail pharmacy license.

Here’s another example: Is a third-party logistics provider required to have a wholesale distribution license covering when to pick, pack, and ship products for a manufacturer? That provider had better find out.

Because state law typically drives drug supply-chain dispensing/distribution activities, businesses engaging in these activities or other interested parties should undertake state-specific legal analysis, in order to determine the licensure requirements for the business activity practiced.

If drug supply-chain activities include the crossing of state lines, the laws and regulations of each state in question should be analyzed to ensure full compliance. In some cases, depending on the nature of the business activity, federal law should also be reviewed.

Consequences

If a business fails to achieve full licensure compliance, the result could be an enforcement action taken by a state board of pharmacy in response to the unauthorized practice of pharmacy or wholesale distribution of a drug.

The result of such a disciplinary action could involve monetary penalties and possibly probation, suspension, or revocation of existing licenses, depending on the severity of the unauthorized activity. At a minimum, unless there is a valid reason for the omission, any such business activity is likely to be prohibited until proper licensure is obtained.

In addition, a pharmacy may be challenged by a third-party payer if the determination is made that a prescription drug was dispensed without regard to the legal requirement for possession of a valid license. Many times, this may lead to a clawback of fees.

In some unfortunate cases, it could precipitate exclusion of the pharmacy from the payer network. In such a circumstance, a pharmacy should immediately seek the advice of legal counsel. 

Regardless of well-established government licensure requirements, many pharmacy enterprises engaging in certain unauthorized business practices do not appreciate the severity of possible consequences until they are sanctioned before a government body. 

In addition to being an icon of pharmacy history that every pharmacist should visit and explore, the New Orleans Pharmacy Museum reminds us that although the first pharmacy license was issued almost 200 years ago, the requirement persists to this day.