I am pleased to announce that I will be speaking in an upcoming Strafford live video webinar, “DEA Prescription Audits and Investigations: Triggering Events; Process Navigation; Mitigating Noncompliance Risks” scheduled for Wednesday, November 5, 12:00pm-1:30pm EST. Because of your affiliation with our firm, you are eligible to attend this program at half off. As long as you use the links in this email, the offer will be reflected automatically in your cart. I also have ten free passes for the first ten interested people. Please send us a message if you would like a code for free registration.

After our presentations, we will engage in a live question and answer session with participants so we can answer your questions about these important issues directly.

I hope you’ll join us.

For more information or to register >

While California amended its regulations on pharmacy closure earlier this year, many pharmacy owners are still confused regarding the requirements when they are selling files, filing for bankruptcy, or simply closing their doors. So what does California require?

Patient notices:

If the pharmacy closes (sells its files or goes out of business), it must notify its patients at least 30 days in advance of the closure. Notices must be send to the patients that have received a prescribed medication from the pharmacy within the last year. At a minimum, the notice shall include:

  • the name of the patient;
  • the name and physical address of the pharmacy;
  • the name of the pharmacy where patient records will be transferred and maintained; and
  • information on how to request a prescription transfer prior to closure of the pharmacy.

A redundant but important reminder: the pharmacy must reverse all prescriptions that are not picked up prior to the closure.

Board of Pharmacy Notices:

The pharmacy must notify the California State Board of Pharmacy 45 days before the closure. But if the pharmacy is owned by a person or entity owning 15 or fewer pharmacies nationwide, it is exempt from this notice requirement. In case of most independent pharmacies, the pharmacy must only provide a notice of Discontinuance of Business to the Board of Pharmacy.

Public Notices:

Pharmacy should also post a written notice of the closure in a conspicuous location at the entrance to the covered establishment’s premises that includes the planned closure date of the covered establishment. The notice should include:

  • the name, address, and contact information of the pharmacy establishment where any prescriptions will be transferred;
  • the phone number, email address, or internet website where patients may obtain information regarding the process of transferring the prescription to a pharmacy establishment of the patient’s choosing.

Notices to Employees:

If the Pharmacy employs 5 or fewer employees, no later than 30 days before the closure, the pharmacy must provide written notice of the closure to its employees.

If the Pharmacy employs more than 5 employees, no later than 45 days before pharmacy closure, the pharmacy must inform its employees of the closure.

Certain exemptions apply to pharmacies that are owned by individuals or entities with fifteen or more pharmacies.

Additional notices:

Chain pharmacies (that are owned by individuals or entities with 15 or more locations nationwide) must also notify the Employment Development Department, the State Department of Social Services, the local workforce development board of the pharmacy’s city and county.

Within the last two weeks, AstraZeneca sent numerous letters to pharmacies requesting information regarding dispensing and purchasing FARXIGA® in 2024. These letters inform pharmacies that AstraZeneca has identified data discrepancies in billing and purchasing FARXIGA® for each flagged pharmacy.

AstraZeneca alleges that it had perform reconciliation of purchase and dispensing data for each identified pharmacy. The reconciliation has identified material inconsistencies for the calendar year 2024. Specifically, AstraZeneca audits discovered that these pharmacies have not purchased a quantity of FARXIGA® tablets sufficient to support reported dispensing. Dispensing data allegedly was derived from rebate claims submitted by PBMs and plans to the manufacturer and the purchase data was reported by the wholesalers.

Our attempts to reach the manufacturer to better understand the nature of these audits and negotiate a confidentiality agreement before our clients disclose such data were unsuccessful.

I strongly caution pharmacies from volunteering this highly sensitive information as it may backfire due to the reporting requirements that AstraZeneca has with state and federal agencies.

I would like to remind pharmacies that they do not have contractual or legal obligations to disclose their dispensing and purchase data to AstraZeneca. If your pharmacy did receive this request from AstraZeneca, please contact our firm to better understand what could be done to mitigate risks involved.

While pharmacies lose money on dispensing FARXIGA® and may dispense a generic version (making a very small profit but keeping the patient), billing for FARXIGA® under this scenario does not obliviate risks of potential fraudulent claims or non-compliance. Reimbursement issues should be addressed directly with the plans and CMS.

With low reimbursement rates, similar manufacturers’ audits might become more routine and compliance is paramount in order to avoid being flagged for further investigation. Pharmacies should review their billing practices to identify any overpayments or billing discrepancies. Medicare, for example, has strict rules on how and when the overpayment must be returned to the plan.

Please contact your legal counsel or our firm if you have received these requests or any audit/inspection requests pertaining to FARXIGA® from state or federal government agencies.

Business and Professions Code (BPC) § 4113.1 established requirements for a community pharmacy to report medication errors to an entity approved by the California State Board of Pharmacy (“Board”) within 14 days of discovery. The Board approved Institute for Safe Medication Practices (“ISMP”) as the entity to receive and review medication error reports under BPC § 4113.1.

ISMP mailed registration cards at the end of April, 2025. If you haven’t received one, you can obtain it on the BOP’s website or register by going to the ISMP registration page.

According to ISMP, all community pharmacies must be registered by July 24, 2025 in order to be ready for reporting by the BOP’s required date of September 1, 2025.

The BOP’s guidance includes non-resident and outpatient hospital pharmacies within the definition of community pharmacy. However, pursuant to BPC § 4113.1(e), an outpatient hospital pharmacy shall not be required to report a medication error that meets the requirements of an adverse event that has been reported to the State Department of Public Health.

The term “medication error” includes any variation from a prescription drug order not authorized by the prescriber, including, but not limited to, errors involving the wrong drug, the wrong dose, the wrong patient, the wrong directions, the wrong preparation, or the wrong route of administration, but does not include any variation that is corrected prior to dispensing to the patient or patient’s agent or any variation allowed by law.

In addition to reporting any medication errors to ISMP, pharmacies are also required to continue documenting errors as part of their Quality Assurance.

I remember times when pharmacies were able to prepare and submit prior authorizations (PAs) on behalf of the prescribers. Then, gears shifted and pharmacies were allowed to fill out PAs but not to submit them.  Nowadays, the landscape is much stricter and pharmacies are only allowed to prepopulate some information, such as patients’ data. Adding clinical information, signing, and actual submission must be done by the prescriber’s office.

A recent case, which resulted in a criminal conviction and a settlement of over $1 million, illustrates the point.

A Florida pharmacy  – OHM Pharmacy Services (Pharmacy) – pled guilty to health care fraud and agreed to settle to resolve False Claims Act violations by paying $82,000 in restitution, and $1,018,000 in penalty.

According to the settlement, the Pharmacy employed several individuals who held the title Patient Assistance Specialists (“PA Specialists”). Among other duties, PA Specialists worked on completing and submitting PA requests for Evzio, as well as certain dermatological products and other drugs. Part D plans require that clinical information be provided directly by representatives of the prescribing physician’s office.  PA Specialists, however, completed Evzio prior authorization forms in place of the prescribing physicians, including instances in which PA Specialists signed the prior authorization forms without the physician’s authorization. The Pharmacy then submitted the forms to Medicare Part D plans misrepresenting that the forms were coming directly from prescribers’ offices. On dozens of Evzio prior authorization request forms, PA Specialists listed Pharmacy’s fax numbers instead of the prescribing physician’s fax number. According to the government’s allegations, the Pharmacy did so to ensure that insurers would contact them (and not the listed prescribing physician) when communicating about these PAs.  

According to the Pharmacy’s admissions, some PAs contained false clinical information to secure their approval and its payment for the more expensive drug (at the time, Evzio was the most expensive version of naloxone and as such required a PA). For example, PA Specialists filled out and submitted dozens of Evzio PA forms that falsely asserted that patients had previously tried and failed both Narcan and naloxone. Furthermore, the Pharmacy falsely stated on Evzio PA forms that patients had shaky hands or nasal problems.

The case stemmed from a qui tam action (a whistleblower suit). The whistleblower in this case was a former employee of Kaleo Inc (Evzio’s manufacturer). It appears that the manufacturer was aware and even assisted with obtaining PAs. Interestingly, back in 2021, Kaleo Inc settled with the federal government for $12.7 million relating to their submission of false claims for Evzio.

This webinar is geared specifically towards hospital staff, pharmacists, and compliance teams. I have reviewed and analyzed all California State Board of Pharmacy (“Board”) disciplinary actions against hospital pharmacies for the last five years and this is probably the most extensive and labor intense webinar that I have ever prepared for. I am looking forward to sharing it with all who are interested in hospital pharmacy compliance, prevention of disciplinary actions, and best practices of avoiding such.

Disciplinary actions against hospital pharmacies can range from public reproval and fines to license suspension or revocation, depending on the severity of the violation. The Board has broad authority to take such actions for violations of pharmacy law, regulations, or other related statutes. This webinar will discuss the most cited violations against hospital pharmacies and ways to prevent such.

California Society of Health-System Pharmacists is hosting this webinar on May 20th 5pm-6pm. Here is a link to register.

The webinar is a must for hospital compliance teams and staff to assist with compliance risk assessments, education efforts, and auditing procedures.

During the webinar, you will learn about:  

– most cited disciplinary actions against hospital pharmacies in California;

– Board’s inspection procedure and its checklists for such hospital pharmacy inspections;

– preventative measures such as revising internal policies and procedures, conducting internal audits and proper training.

I hope to see you there!

As always, California is at the forefront of inventing new requirements for enforcing compliance with pharmacy laws. This time, the new requirement pertains to Pharmacists-in-Charge (PICs).

Effective April 1, 2025, all proposed PICs are required to complete a training course available on the California State Board of Pharmacy’s website, within two years prior to the date of application to serve as a PIC.

The amended California Code of Regulations (CCR), title 16, section 1709.1 now requires all proposed PICs to submit an attestation statement that include the following:

  • The name of the proposed PIC
  • The proposed PIC’s license number
  • A statement that the PIC has read Sections 4036.5, 4081, 4113, and 4330 of the Business and Professions Code and CCR 1709.1 (please review these sections if you are currently serving as a PIC, as they have recently been amended)
  • A statement identifying the date that the proposed PIC took the board’s training course
  • A declaration signed under penalty of perjury that the statement contains true information.

The training course could be accessed on the BOP’s website and is free of charge. It provides an overview of pharmacy law related to the position and the responsibility of a PIC. The course also discusses tips on how to prepare a pharmacy for an inspection by a California State Board of Pharmacy Inspector and provide resources for the PIC to aid in their supervision and management of a pharmacy. One hour of CE will be awarded for completing this training, but does not count toward the required 2 hours of CE for Law and Ethics.

Taking this course is recommended for all PICs (even if not required). In my experience, many PICs are still confused about their responsibilities and oversight of the pharmacy. The course is beneficial to all PICs, pharmacy owners, and pharmacists as it covers such important requirements as:

1) Legal requirements of the role of a PIC;

2) Legal prohibitions for a pharmacy owner to subvert the PIC

(3) Legal requirements/Overview of the self-assessment process

(4) How to prepare for an inspection

(5) Top violations that result in a Cite and Fine.

If you a pharmacist who considers becoming a PIC, a pharmacy owner, or a PIC, this course is a must and not because it is now required but also because it provides a condensed version of major legal requirements that pertain to pharmacy operations.

OptumRx has recently announced that it is easing its prior authorization (PA) requirements on about 80 drugs for renewed prescriptions. The program is planned to start on May 1, 2025 and will include various drugs such as Aimovig, Kalydeco, and Praluent. The list of drugs is anticipated to increase based on the success of the pilot implementation this year. OptumRx estimates that the program would eliminate about 10% of all pharmacy prior authorizations.

The change is likely to streamline dispensing of the initial 80 drugs, making it easier and less costly for the pharmacies to fill them.

I will be speaking at the upcoming American Health Law Association, Institute on Medicare and Medicaid Payment Issues on the impact of the Inflation Reduction Act of 2022 on healthcare providers, specifically pharmacies.

Overview of the presentation:


On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA)—the law’s “Prescription Drug Pricing Reform” provisions represent the most significant changes to Medicare payment for drugs and biologicals in decades.

  • Among other provisions, the law authorizes the Medicare program to negotiate prices for certain Medicare-covered drugs, and requires manufacturers that raise their drug prices faster than the rate of inflation to pay a rebate to Medicare and reduces Part B coinsurance for these drugs for people with Medicare.
  • The law also contains several other provisions intended to reduce out-of-pocket expenditures for Medicare beneficiaries for drugs and certain vaccines
    CMS’ ongoing implementation of the IRA’s Prescription Drug Pricing Reform provisions for initial price applicability year (IPAY) 2026 and beyond.
  • The key statutory provisions, timelines, and the steps CMS has taken to implement them to date, with a primary focus on the drug price negotiation provisions.
  • Legal considerations for pharmaceutical companies, pharmacies, and providers as a result of the changes under the IRA, and how those changes will affect patients in the coming years.

Natalia Mazina, Emily Do, Eman Kirolos

This year’s American Society for Pharmacy Law (ASPL) conference was as always full of opportunities to connect with pharmacy leaders, superb lawyers, and government representatives. The lineup of presentations featured a range of topics from the key Supreme Court decisions impacting pharmacies to animal drug compounding (with many more in between). A few sessions were focused on dispensing and handling controlled substances. While the most recent wave of increased DEA audits and enforcement actions has passed (or at least it seems so), this topic is as relevant today as ever.

In fact, the day after the conference, I received an email announcing an indictment of a man who purchased cocaine and fentanyl for his two girlfriends while they were out in San Francisco. One of the women died due to the interaction between the two substances, while the other woman is still hospitalized. These cases are still happening on a daily basis and while this specific situation did not involve a pharmacy, purchasing illegal substances online or on the streets still kills people.  

One of the presentation at the ASPL conference focused on DEA’s efforts to curb illegal distribution of controlled substances. Joel A. Ferre (Assistant United States Attorney, District of Utah) discussed pharmacy enforcement cases. Although Mr. Ferre had explained that intent or “knowingly” requirement must be present, my firm had several cases where the DEA had lowered the threshold of what constitutes “knowingly” dispensing controlled substances in violation of the Controlled Substances Act (CSA). Dispensing without resolving (and documenting) all the red flags was enough for the DEA to commence administrative and civil actions. For example, in one of the cases, we presented ample evidence that the dispensing pharmacist personally knew his patients (it was a rural community), their diagnoses, and discussed treatment plans with the prescribers. Nevertheless, the DEA imposed a very large monetary penalty because the patients were taking “suspicious” combinations of controlled substances, which the pharmacist should have resolved with prescribers and properly documented reasons for these combinations.

A good resource, mentioned during the presentation, is the “Pharmacist’s guide to Prescription Fraud,” available at https://www.deadiversion.usdoj.gov/GDP/(DEA-DC-002R1)(EO-DEA009R1)_RPH_Guide_to_RX_Fraud_Trifold_(Final).pdf

Some recent pharmacy cases highlighted during Mr. Ferre’s presentation are:

WeCare Pharmacy (Florida) case resulted in a temporary restraining order against the pharmacy and its pharmacist-in-charge for not resolving red flags while dispensing controlled substances.

A very similar case but in Ohio resulted in $375,000 civil penalty and a consent judgment to cease dispensing certain opioid prescriptions, including combinations of opioid and benzodiazepine prescriptions (Toledo Pharmacy case).

And a case on almost identical facts but in North Carolina resulted in $600,000 as civil penalty and a consent judgment and permanent injunction against the corporation and its pharmacist  prohibiting them for ever again dispensing or handling controlled substances. (Farmville Discount Drug, Inc).

As you can see from the above examples, depending on the DEA district, penalties and enforcement actions vary greatly. The DEA is equipped with various tools of enforcing the CSA and sometimes uses them creatively. Our firm is in the San Francisco (Bay Area) DEA district, which, for example, uses civil penalties as the most preferred mechanism against pharmacies.

Two more presentations at the ASPL’s conference focused on controlled substances, such as “Distribution, Dispensing, and Digital Health” (presented by Cory Kopitzke and Libby Baney),  discussing online dispensing of controlled substances, and “Recent DEA Rules Every Pharmacist Should Know” presented by Jonathan A. Keller.

Another notable presentation discussed where the DEA stands with rescheduling cannabis “A Detailed Review of DEA’s Proposed Rescheduling of Marijuana” presented by Karla Palmer and Kalie Richarson, which was another insightful presentation of a hot topic.

The amount of sessions on controlled substances stresses the need for vigilance and thorough review of DEA updates, recent cases, and state actions regarding controlled-substances dispensing. That leads me to my usual mantra that I teach in DEA seminars: “resolve and document all red flags.” And if you want to stay abreast of the developments in pharmacy law, the ASPL annual conference is a great place to start. Hope to see you there next year.