CBD Compliance for Pharmacists
More patients are coming to you every day asking about CBD oil and other cannabis-based treatments and medications. Here’s what you need to know in order to maintain federal compliance.
When the federal Agriculture Improvement Act of 2018 (commonly known as the “Farm Bill”) was passed late last year, hemp became declassified as a Schedule I drug under the Controlled Substances Act (CSA). This enactment, combined with the continued push toward legalization of hemp and marijuana at the state level, meant that hemp-based treatments and medications – including principally CBD oil – were suddenly in high demand at pharmacies around the country.
However, while hemp is now legal at the federal level, legal does not mean unregulated. In a statement issued on the date that the Farm Bill was signed into law, the Food and Drug Administration (FDA) issued a statement saying:
“Just as important for the FDA and our commitment to protect and promote the public health is what the law didn’t change: Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. In doing so, Congress recognized the agency’s important public health role with respect to all the products it regulates. This allows the FDA to continue enforcing the law to protect patients and the public while also providing potential regulatory pathways for products containing cannabis and cannabis-derived compounds.”
To date, the FDA has approved four hemp-derived treatments and medications for distribution in the United States, but far more have been legalized at the state level in various locales around the country. Currently, the four FDA-approved drugs are:
- Cesamet – A synthetic cannabinoid used to treat chemotherapy-induced nausea and vomiting.
- Epidiolex – A formulation of cannabidiol for treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome.
- Marinol – A formulation of dronabinol used to treat chemotherapy-induced nausea and vomiting as well as weight-loss conditions linked to AIDS.
- Syndros – A formulation of dronabinol used to treat chemotherapy-induced nausea and vomiting as well as weight-loss conditions linked to AIDS.
Where and When Can Pharmacies Dispense CBD and Other Hemp-Derived Treatments and Medications?
So, as a pharmacist, what does all of this mean for you? Can you stock CBD oil and other hemp-derived treatments and medications? Can you dispense these drugs legally to patients? Can you recommend over-the-counter CBD oils to patients who don’t have prescriptions?
With respect to the four drugs listed above – Cesamet, Epidiolex, Marinol, and Syndros – the answer is relatively straightforward: You can stock and dispense these medications provided that you comply with the applicable federal (and state) requirements. This includes, among other things, registering with the Drug Enforcement Administration (DEA).
For other drugs, you will need to examine the laws of the state where you practice. Even if CBD oil and medical marijuana are legal in your state, you will still need to carefully review your state’s requirements to ensure that your practice is fully-compliant with the law. As of this writing, the states that have legalized CBD oil for medicinal purposes are:
- North Carolina
- South Carolina
- South Dakota
The states that have legalized medical marijuana (including those that have also legalized the recreational use of marijuana) are:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- Washington D.C.
- West Virginia
3 Keys to Avoiding Prosecution and Penalties for Pharmacies that Dispense CBD and Other Cannabinoids
1. Developing and Implementing a Comprehensive Compliance Program
Regardless of the specific drugs you stock and dispense to your patients, as a pharmacist in the United States, you need to have a comprehensive compliance program. If you don’t not only are you bound to make mistakes; but, when you do, you will be fully exposed in the event of an audit or investigation.
When federal agents examine pharmacy practices, one of the first things they look for is compliance documentation. If the pharmacy has a compliance program and made an honest mistake, there is a reasonable chance that the inquiry will be resolved with minimal consequences. On the other hand, if the pharmacy failed to take appropriate measures to comply with the law – thereby putting patients at risk – then the pharmacy and its owners and personnel are far more likely to face substantial fines, and potentially even federal criminal prosecution.
What does it take to implement an effective compliance program as a pharmacy that stocks and dispenses CBD oil and other hemp-derived treatments and medications? At a high level, the key components of an effective pharmacy compliance program are:
- Appropriate business entity structure and organizational documentation
- Employment agreements, code of conduct, and policies and procedures
- Marketing and vendor agreements
- Billing and coding compliance materials and training (for Medicare, Medicaid, Tricare, and Department of Labor (DOL) compliance)
- DEA and CSA compliance materials and training
- Internal compliance and enforcement policies and procedures
- State and federal audit and investigation response protocols
Learn more: Regulation & Pharmacy Compliance
2. Focusing on the Risk of Prescription Drug Fraud Involving Cannabinoids
Similar to opioids, CBD and other cannabinoids present a high risk for diversion and other forms of prescription drug fraud. As a result, pharmacies that stock these drugs are likely to face close scrutiny from the DEA and other authorities. This means that preventing fraud needs to be a top priority, and pharmacies must take several affirmative steps to ensure that their patients and their personnel do not gain unlawful access to controlled hemp-based treatments and medications.
3. Being Prepared in the Event of a DEA Audit or Federal Investigation
All DEA-registered pharmacies and healthcare providers are subject to regular inspections. These inspections can be harmless, but they can also lead to targeted audits and investigations. Patient complaints, reports filed by personnel, and other events can trigger audits and investigations as well, and pharmacists and pharmacies need to be prepared to defend themselves effectively if they are targeted in an audit or DEA agents show up at their door.
What does it mean to be prepared for a DEA audit or federal investigation? Once again, compliance documentation is key. If auditors or federal agents question your dispensing or billing practices, you need to be able to affirmatively demonstrate that you have undertaken thorough measures to avoid errors. You also need to have a plan in place for dealing with requests for documents and “interviews,” and you should have legal counsel on call so that you can have experienced federal defense attorneys interfacing with the government on your behalf.
Learn more: DEA Pharmacy Inspections: Are You Prepared?
IMPORTANT: Deceptive Marketing Practices Could Spell Trouble for Drug Manufacturers and Pharmacies
Marketing compliance is a big issue for drug manufacturers, and pharmacists need to be careful to avoid perpetuating deceptive (and unlawful) claims about the effectiveness of CBD oil and other hemp-derived treatments and medications. The FDA issued a statement on this earlier in the year as well, calling the following examples “egregious, over-the-line claims,” and stating that the FDA “won’t tolerate this kind of deceptive marketing to vulnerable patients.”
- “For Alzheimer’s patients, CBD is one treatment option that is slowing the progression of that disease.”
- “Cannabidiol May be Effective for Treating Substance Use Disorders.”
- “CBD reduced the rewarding effects of morphine and reduced drug seeking of heroin.”
- “CBD may be used to avoid or reduce withdrawal symptoms.”
This warning from the FDA highlights a few important issues for pharmacists that stock, dispense, and recommend cannabinoids. First, pharmacists cannot assume that drug makers’ claims regarding their products are accurate. Second, repeating these types of claims in marketing materials – particularly for high-profile drugs including cannabinoids – is likely to lead to scrutiny from the FDA, DEA, and other authorities. Third, when entering into contracts with drug makers and marketing companies, pharmacies need to ensure that they have adequate protections so that they can pursue indemnification and other remedies in the event that they get in trouble for relying on deceptive drug marketing claims.
Do all of these considerations have you worried about offering CBD oil and other cannabinoids at your pharmacy? If so, you are right to be concerned; but, you should also know that it is possible to develop and maintain a compliant practice. Our attorneys work with pharmacies in states across the country, and we can help you move forward with confidence. Contact us to learn more.
Speak with a Pharmacy Compliance Lawyer at Oberheiden, P.C.
If you would like to speak with one of our attorneys about CBD compliance, we encourage you to contact us for a complimentary initial consultation. To discuss your pharmacy’s compliance needs in confidence, give us a call at (214) 469-22171 or request an appointment online today.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.