…Court Orsborn, president of Donn & Co. in San Francisco, said physician dispensing can represent a significant percentage of some payers’ total prescription costs. Donn & Co. is a workers’ comp managed care advisory firm serving employers and carriers.

“While there are certainly some situations where physician dispensing may be appropriate, the reality is that the main motivation for physician dispensing is revenue-based,” Orsborn said. “We see pro-dispensing arguments such as physician dispensing is an added convenience for the injured. But when you think about how easy it is to locate a pharmacy in most places, you realize that arguments like that are something of a stretch.”

Depending on the jurisdiction, payers may be able to implement controls on physician dispensing through medical provider networks or pharmacy-benefit networks, Orsborn said.

Under pharmacy benefit networks in California, payers or employers that contract with pharmacies are not required to pay for prescriptions dispensed outside of the network. And the networks can be designed to exclude drugs dispensed at a physician’s office. Some view the PBNs as a potentially valuable tool in limiting physician dispensing or use of compounded drugs.