Most physicians in an office practice dispense drugs on a daily basis and in most instances the drugs are actually dispensed or given to the patient by another party, usually a pharmacy. Physicians may, however, dispense drugs directly to patients and thereby provide a convenience to the patient and help to ensure compliance with the patient actually taking the drug. Questions arise with this model, however, since it is a new concept for most physician practices and uncertainties surround the practical application of in-office dispensing.
Is it legal? What are the state laws ?
In-office dispensing is definitely legal. Under federal Stark regulations, physician dispensing is acceptable and lawful when the dispensing is limited to the physician's own patients. In most states, physicians are allowed to purchase and dispense drugs under their physician licenses, and every physician is permitted by law to dispense medications to his/her own patients within his/her practice. All medications and products dispensed must meet FDA guidelines for repackaging and labeling. Some additional requirements may apply, however, and these vary by state. Most states do not require anything beyond an existing DEA and state license in order to dispense meds, but some states require each dispensing physician to have a special dispensing license. Several states require an inventory or sales tax. The following link from the American Academy of Urgent Care Medicine provides information on each state and the specific requirements that apply: http://aaucm.org/professionals/medicalclinicalnews/dispensingregulations/default.aspx
Self-referral restrictions The federal Stark laws pertain to physician self referral for Medicare and Medicaid Patients, and there are exemptions for in-office ancillary services, including dispensing. The in-office ancillary services exception permits physician owners of a medical group, and other members of the group, to refer patients to their group for certain Designated Health Services (DHS). An outpatient prescription drug given to a patient in the physician's office, but taken by the patient at home, is now covered by this exemption.
Another useful reference from the American Academy of Urgent Care Medicine in February 2012 is provided below: