Doctor Dispensing Is Mainstream

Doctor dispensing is as old as medicine itself, and it has been the norm in America since before the Revolution. As one Boston doctor observed in 1722, “all our Practitioners dispense their own medicines.”^[1] Still today, a majority of American doctors report dispensing medication in their daily practices.^[2]

It’s easy to see why. Up to 30% of all prescriptions in this country go unfilled due to factors like cost and inconvenience, resulting in future complications for patients and billions of dollars annually in avoidable medical expenses for the broader health care system. Dispensing offers doctors a way to help alleviate these problems by providing patients with immediate access to the medications they need—often at a fraction of the price offered by nearby pharmacies.

Better yet, there is no evidence that doctor dispensing trades convenience for patient health. Doctor dispensed medication is, statistically, just as safe as pharmacy dispensed medication.^[3] This makes sense, since it is doctors who are charged with assessing patients’ needs and prescribing the right medication, and it is doctors who are held responsible if something goes wrong.

Simply put, doctor dispensing is a no-brainer, both medically and economically. It’s no wonder that doctors in 44 states and the District of Columbia are legally permitted to provide this beneficial service.

Texas Bans Doctor Dispensing to Protect Local Pharmacies from Competition

Texas is an outlier. There, unlike in the vast majority of states, doctors are banned from dispensing more than a 72-hour supply of prescription medication to their patients unless they also obtain a pharmacist’s license.^[4]

There are a few narrow exceptions. For example, doctors may provide an unlimited amount of prescription medication directly to their patients—in the form of free samples provided by pharmaceutical manufacturers.^[5] Doctors may also dispense non-controlled prescription medication, at cost, if they work in certain “rural” areas more than 15 miles from a pharmacy.^[6]

This law, while pitched as a health and safety measure, has nothing to do with protecting the public. Texas doctors are every bit as qualified as their peers in 44 other states and the District of Columbia to dispense medication to their patients. And doctors who happen to work near pharmacies are just as qualified as their rural peers in Texas to provide medication to their patients at cost.

If anything, this law harms public health and safety. Preventing doctors from offering patients convenient access to medication makes it more difficult for patients to stick to their prescribed course of care and imposes unnecessary costs on the state’s health care system. Indeed, the Texas Medical Association—the largest such association in the country—seeks to repeal the dispensing ban for precisely these reasons.

Of course, it’s not doctors or patients who want to keep Texas’s dispensing ban on the books. Texas pharmacy groups—whose members enjoy a 15-mile buffer from competition under the law—have opposed and successfully defeated every recent legislative effort to reform Texas’s dispensing ban. Now two doctors are fighting back.

The Plaintiff

Dr. Michael Garrett is a Texas physicians who wants to dispense safe, affordable medication to his patients, but is forbidden from doing so solely because he works in a populated area within 15 miles of a pharmacy.

Dr. Garrett is a family doctor in Austin, Texas, who has been practicing medicine for over two decades. After spending the first 17 years of his career in the ER, Dr. Garrett opened a family practice, Direct MD Austin. Dr. Garrett offers a wide range of services—everything from basic checkups, to treatment for chronic conditions, to acute care. In his practice, Dr. Garrett regularly prescribes medication for common conditions like high cholesterol, headaches, strep throat, seasonal allergies and so on.

Dr. Garrett believes his patients would benefit from the ability to purchase medications directly in their offices, and they know they could offer them at prices far lower than those available at local pharmacies. For Dr. Garrett, it just makes sense that patients receiving primary care at his office should also be able to purchase their medication there. He would prefer to send patients straight home with their medication in hand.

In short, Dr. Garrett puts his patients first. Texas’s ban on doctor dispensing puts pharmacies first.

The Legal Challenge

Texas’s anti-competitive ban is unconstitutional in two ways. First, the law violates Article I, Section 19 of the Texas Constitution, which protects the right to pursue a chosen business free from unreasonable governmental interference. In 2015, the Texas Supreme Court issued a landmark ruling in Patel v. Texas Department of Licensing and Regulation, clarifying that Article I, Section 19 provides greater protection for economic liberty than the U.S. Constitution.^[7] Under Patel, Texas courts determine whether an economic regulation has a legitimate governmental purpose; whether the law’s real-world effect is rationally related to that purpose; and whether the law’s overall impact is unduly burdensome.

Texas’s ban fails this test. Just like their peers in 44 other states, the District of Columbia and in rural parts of Texas, Dr. Garrett is qualified to safely dispense medication to his patients. Indeed, Dr. Garrett spent 17 years providing ER care. There is no rational reason he cannot be trusted to hand patients medication that he, himself, has prescribed (and can already dispense as free samples). In truth, the only reason this law exists is to protect the financial interests of pharmacies—and under the Texas Constitution, pure economic protectionism is not a legitimate use of government power.

For similar reasons, the ban also violates Article I, Section 3 of the Texas Constitution, which forbids the state from drawing unreasonable and protectionist distinctions between similar groups. Dr. Garrett would like to provide identical services to those offered by rural physicians, but he is forbidden from doing so because of their proximity to pharmacies—a factor that, again, has nothing to do with the safety of the medication they want to dispense and everything to do with protecting pharmacies from competition.

To vindicate their economic liberty rights under the Texas Constitution, Dr. Garrett has teamed up with IJ to file a lawsuit challenging the state’s anti-competitive ban on doctor dispensing. This case continues IJ’s decades-long fight to establish economic liberty as a foundational right worthy of genuine judicial protection, and adds to a growing list of cases filed in recent years to expand upon IJ’s victory in Patel, both in states across the country and in Texas specifically.

The Litigation Team

IJ Attorney Joshua Windham and IJ Senior Attorney Wesley Hottot represent Dr. Garrett in the lawsuit.

The Institute for Justice: A History of Protecting Economic Liberty

The Institute for Justice is a public-interest law firm that brings challenges nationwide in support of fundamental individual rights, including the right to economic liberty. IJ has successfully challenged restrictions on economic liberty across the nation, including in the following cases:

• Patel Texas Department of Licensing and Regulation—In June 2015, the Texas Supreme Court ruled that the Department of Licensing and Regulation violated the state constitution when it ordered eyebrow threaders to stop working unless they obtained 750 hours of conventional cosmetology training. This landmark ruling vindicated the threaders’ economic liberty rights under the Texas Constitution. Patel established a new test for reviewing the constitutionality of economic regulations that infringe on an individual’s economic liberty.
• Saint Joseph Abbey v. Castille—In August 2010, the Institute for Justice teamed up with the monks of Saint Joseph Abbey in Louisiana to challenge a requirement that they be licensed as funeral directors just to sell their handmade wooden caskets. In 2013, the Fifth U.S. Circuit Court of Appeals agreed that the requirement violated the 14th Amendment to the United States Constitution, declaring that mere economic protectionism is an illegitimate “naked transfer of wealth[.]”
• Brantley v. Kuntz—In January 2015, the United States District Court for the Western District of Texas declared as unconstitutional under the 14th Amendment a set of laws that forced small African hair braiding schools to transform into fully equipped barber schools just so they could teach students to braid hair for a living. The court’s ruling is a model of judicial engagement, a genuine search for the truth concerning the constitutionality of the government’s ends and means on the basis of real evidence.
• Castaneda v. City of El Paso—In January 2011, the Institute for Justice brought suit against the city of El Paso, Texas, which barred mobile food vendors from operating within 1,000 feet of a restaurant or convenience store and prohibited them from stopping to await customers anywhere in the city. As a result of the lawsuit, the city passed a new ordinance that eliminated these and other protectionist restrictions.
• Lopez v. City of San Antonio—In October 2015, the Institute for Justice teamed up with four food-truck entrepreneurs to file a lawsuit against the city of San Antonio, Texas, which made it illegal to vend within 300 feet of a restaurant. To have any chance at vending in these restricted areas, food trucks had to first get written, notarized permission slips from the very brick-and-mortar competitors the law was designed to protect. In response to IJ’s lawsuit, the San Antonio City Council voted to repeal the decades-old protectionist law.

For more information, contact:
Matthew Powers
Reporting and Communications Associate
(703) 682-9320 ext. 254
mpowers@ij.org

^[1] Glenn Sonnedecker, Kremers and Urdang’s History of Pharmacy 155 (4th ed. 1986).

^[2] Mark Munger et al., National Evaluation of Prescriber Drug Dispensing, 34 Pharmacotherapy 6 (2014).

^[3] Munger et al., supra note 2, at 8.

^[4] Tex. Occ. Code §§ 158.001, 551.006, 563.051.

^[5] Id. § 158.000(a).

^[6] Id. §§ 158.003, 563.053.

^[7] Patel v. Texas Dep’t of Licensing & Regulation, 469 S.W.3d 69, 87 (Tex. 2015).