As prescription drug prices continue to rise, many independent pharmacies are actively seeking alternative and lower-cost sources of inventory to remain competitive. In some instances, this has led pharmacies to pharmacy-to-pharmacy digital marketplaces that advertise prescription medications at prices significantly below those offered through authorized wholesalers. While these transactions may appear commercially attractive, they can expose pharmacies to substantial legal and regulatory risk.
Manufacturers are actively monitoring pharmacy-to-pharmacy marketplaces, conducting test purchases, and tracing product identifiers to determine whether medications have been diverted from the legitimate supply chain. The resulting lawsuits commonly involve claims that pharmacies purchased or resold prescription drugs that were diverted, relabeled, or repackaged before reentering commerce. In some cases, the alleged diversion begins at the patient level, where individuals who obtain medications at little or no cost later resell them into the informal market.
Know the Red Flags
The Drug Supply Chain Security Act (“DSCSA”) imposes obligations designed to preserve the integrity and traceability of the pharmaceutical supply chain. Accordingly, pharmacies must not disregard warning signs simply because a transaction appears financially advantageous or operationally convenient.
Common red flags include:
Pricing that appears too good to be true, particularly when significantly below market or wholesale acquisition costs.
Offers involving unusually large quantities of high-demand or high-cost medications.
Transactions involving unauthorized or unverified trading partners.
Missing, incomplete, or inconsistent transaction documentation.
Signs of relabeling, repackaging, tampering, or compromised packaging integrity.
Pharmacies are expected to identify and investigate suspicious transactions before purchasing or dispensing products. As recent enforcement trends demonstrate, failure to appropriately respond to these warning signs may result in regulatory action, civil litigation, and, in certain circumstances, potential criminal exposure.
Beyond regulatory compliance, diverted or improperly handled medications present serious concerns for patient safety and supply chain integrity. Pharmaceutical products that have passed through unauthorized channels may have been exposed to unknown storage conditions, improper handling, or other disruptions that cannot be reliably verified.
If your pharmacy has been accused of purchasing or selling diverted prescription drugs, or is facing an investigation or litigation related to pharmacy-to-pharmacy purchasing practices, contact MDRXLaw at 212.668.0200 or info@mdrxlaw.com to discuss your situation.
