We’ve talked a great deal in recent years about the inherent ethical conflicts of physician dispensing; doctors writing and fulfilling their own prescriptions. I have defined arguments defending that practice as attempts “to scrub the indelible stain on the soul that prescribing for fun and profit undoubtedly brings.” The issue, of course, is that drugs from these dispensing physicians is often exorbitantly higher in cost than their pharmacy driven counterparts. That, and there is no guarantee that a doctor’s ability to profit from prescriptions will not translate into lengthy and unnecessary drug regimens.

Last week we learned a new wrinkle on the issue, with a Philadelphia Inquirer story revealing that a leading Pennsylvania injured workers’ law firm has, essentially, opened their own pharmacy. The paper reports that 65% of “Workers’ First Pharmacy Services” is owned by three partners and the CFO of the law firm Pond Lehocky Stern Giordano. The remaining 35% ownership reportedly includes at least 6 physicians, according to the paper. An email sent to physicians by senior Pond Lehocky partner Sam Pond asks, “For all patients that you may see with a workers’ compensation claim, referred to you from our office or elsewhere, we ask that you have our pharmacy, Workers First Pharmacy Services, fill the scripts.”

The argument used to justify this entrepreneurial endeavor will sound strangely familiar to participants of the physician dispensing debate. Essentially, the evil insurance companies delay and deny treatment, and Workers’ First is a way to ensure prompt medical care for the worker in such cases. It is the old, “get the medicine in their hands as quickly as possible” argument. That was the primary justification for physicians filling (and profiting from) their own prescriptions. The email from Pond, available here, does say that injured workers’ will receive their prescriptions from Workers’ First even if the claim has been denied. It is, in my view, the one high point in their argument. In the legalistic world of workers’ comp, there is no doubt that delayed treatment for compensable claims is a legitimate concern.

However, does the sole (possible) benefit outweigh the risks?

First and foremost, the cost; the Inquirer article cites several incidents where Workers’ First allegedly charged prices significantly higher than one might experience in a standard pharmacy. Examples included $1,900 for 6 ounces of lidocaine 5 percent ointment, when a “1-ounce tube of the same medication can be purchased online for about $14.” There was also an instance where they charged $1,600 for a 5-ounce bottle of Diclofenac. According to the Inquirer, that can be purchased wholesale for $60 to $70.

Next up on the potential risk hit parade; transparency. Do the injured workers clearly know of this relationship? Do they know that their lawyers and doctors are profiting from the medicine they are prescribed? Do they recognize that an extended treatment protocol could in fact provide more financial reward for the people charged with their prompt and efficient care? I honestly do not know, and cannot conjecture, however, a worker quoted in the Inquirer article clearly states that he had no idea that his lawyers and the doctors they referred owned the pharmacy that had been filling his prescriptions. His quote, “I don’t want to be a part of something unethical. I don’t know what’s going on”, should strongly reverberate with the legal community.

And finally, does this in fact represent a true conflict of interest? If lawyers and doctors are supposed to be representing the best interest of their client patients, can that in fact be accomplished when they profit on each transaction along the way? Whose interests in fact, will take precedence?

Again, we cannot say any of this has happened, or in fact whether any injured worker has been harmed by this arrangement. Pennsylvania’s Rules of Professional Conduct (81.4), section 1.8 states:

(a)  A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

   (1)  the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

   (2)  the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

   (3)  the client gives informed consent in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.

 (b)  A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules.

It seems to me the key words in that clause are “pecuniary interest adverse to a client”. Profiting from that client in ways other than a direct fee for representation may open a Pandora’s box of ethical issues – especially if the relationships are not fully disclosed and well defined.

The entire situation was probably put best by Dr. Steven Joffe, Chief of the Division of Medical Ethics at the University of Pennsylvania’s Medical School. He said of this revelation, “I can’t speak to what’s going on in any individual case, but the whole setup seems ripe for corruption.”

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