Results of Economic Impact Discussion: The Latest on Proposed Changes to Wisconsin Patient Counseling Rule That Will Impact Mail Order Pharmacies

On November 15, 2019, the Wisconsin Pharmacy Examining Board (the "Board") met to discuss the submitted comments related to the economic impact of requiring all pharmacies (including mail order pharmacies) to provide verbal patient consultation prior to dispensing any new prescription to a patient. While the details of the Board's economic impact report remain to be seen, the proposed rule language regarding counseling will likely proceed to public comment in its current form.

Numerous mail order pharmacies submitted comments indicating that the new rule would impose significant costs on their existing operations. The Pharmaceutical Care Management Association (PCMA) submitted the most impactful comment and indicated that the new rule would impose over $30 million in costs over the next 2 years on its mail order pharmacy members alone. Based on the PCMA's numbers, some members of the Board informally extrapolated that the potential costs related to the new counseling requirements for all mail order pharmacies could run between $22.5 and $30 million annually.

These numbers are significant because, under the governing Wisconsin law, the Board must obtain additional administrative approvals in the event "an economic impact analysis regarding a proposed rule indicates that a total of $20,000,000 or more in implementation and compliance costs are reasonably expected to be incurred by or passed along to businesses, local governmental units, and individuals as a result of the proposed rule[.]" The Board indicated that if it needed to obtain such additional approvals, the Board would run out of time to promulgate their new rules under their existing scope of rulemaking. The Board also discussed the potential for offsetting the costs imposed on certain types of pharmacies (e.g., mail order) with the savings obtained for other types of pharmacies via the loosening of existing refill counseling requirements (e.g., brick and mortar community pharmacies). The Board, however, after discussions with its legal counsel, appeared to decide against this approach.

Ultimately, after a contentious meeting, the Board voted 3 to 2 to dispute the PCMA's findings. In doing so, the Board majority both questioned the methodology of the PCMA's analysis and noted that the new rule allows an exception for verbal counseling if "in the pharmacist’s professional judgment it is not in the best interest of the patient or patient’s agent to be communicated orally." The Board majority reasoned that because mail order pharmacies should already be acting "in the best interest of the patient," the new rule should not impose any additional costs on mail order pharmacies.

Based on such logic, the Board majority moved for a vote to dispute the PCMA cost estimate at the end of the meeting. While the vote ultimately carried 3 to 2 (the public member did not attend), some Board members did raise the following questions and concerns:

• The Board did not provide much time (roughly 2 weeks) for stakeholders to submit the economic impact comments.
• The Board did not have countervailing data with which to dispute the PCMA report.
• Some Board members indicated that in their own industry experiences, the costs to mail order pharmacies will likely be in excess of the $20 million statutory threshold.
• Some Board members questioned the difference between the proposed "best interest of the patient" standard and the "not practicable" standard utilized by other states (e.g., Iowa).

The Board's next step will be to post an updated draft with proposed changes to mitigate any economic impacts prior to the public hearing scheduled for December 17, 2019. The Board will also publish an economic impact analysis which will indicate whether the Board reasonably believes the costs of the proposed rule will exceed $20 million. 

Based on the discussions at the meeting, it does not appear likely the Board will make material changes to the proposed verbal counseling requirement or indicate the costs of the proposed rule will exceed $20 million. Nonetheless, Quarles & Brady will continue to monitor the Board's actions and publish relevant updates as needed.
Affected stakeholders should submit written comments explaining their positions. Such stakeholders may want to consider specifically addressing some of the Board's concerns listed above in addition to the broader policy ramifications of the proposed rule.

Written comments may be submitted to:

Sharon Henes, Administrative Rules Coordinator
Division of Policy Development
Department of Safety and Professional Services
PO Box 8366
Madison, WI 53708-8935
DSPSAdminRules@wisconsin.gov

While the Board has not yet published a specific deadline for public comment submission, such comments will likely need to be submitted in advance of the upcoming December 17, 2019 meeting.

For more information on how the proposed rule changes may affect your business, please contact your Quarles & Brady attorney or:

• Susan B. Trujillo: (602) 229-5318 / susan.trujillo@quarles.com
• Richard B. Davis: (414) 277-5844 / richard.davis@quarles.com