Costco incident a warning on corporate ownership

costco storefront lit at dusk

Costco Wholesale to pay US$11.75 million to settle allegations of lax pharmacy controls, including the filling improper and incomplete scripts

The incident highlights the benefits of the Australian pharmacist ownership model, in contrast to corporate ownership models internationally, says Pharmacy Guild Victorian president Anthony Tassone.

A settlement will resolve allegations that Costco’s pharmacies filled prescriptions that were incomplete, lacked valid Drug Enforcement Administration (DEA) numbers or were for substances beyond various doctors’ scope of practice.  

It will also resolve allegations that Costco failed to keep and maintain accurate records for controlled substances at its pharmacies and centralised fill locations, according to a statement from the US Department of Justice.

“Pharmacies across this country are on the leading edge of the battle against our prescription drug abuse crisis,” says US Attorney Annette L. Hayes of the Western District of Washington.  

“A company such as Costco that distributes a significant volume of controlled substances has a responsibility to ensure it complies with regulations that help prevent opioids and other dangerous drugs from being misused or otherwise added to the illegal marketplace.  

“I commend the DEA investigators for uncovering the violations at issue in this case, and working with Costco to ensure that systems are put in place to prevent controlled substances from ending up in the wrong hands.” 

The Pharmacy Guild’s Anthony Tassone told the AJP today that the case provides a warning against corporate pharmacy ownership.

“Where there is a publicly listed or private company, they’re accountable to their shareholders first and foremost,” Tassone says.

“Pharmacist owners are accountable to their patients and their public. So pharmacist-only ownership of pharmacies is in the public interest.

“This is yet another example in a growing list of recent events where deregulation of ownership does not pose any benefit over our current system in Australia.

“The Costco incident is of great concern given the controlled substances that were involved, the systematic failing of their processes and the scale on which they have failed the public.”

Tassone warned that any deregulation of ownership and location in Australia could adversely affect the working conditions, including workplace pressures and remuneration, of Australian pharmacists.

He says that while it is difficult to speculate as to the conditions affected Costco pharmacists were expected to work under, they have a “very important responsibility as custodians of medicines and quality use of medicines”.

“Given recent supermarket pay disputes, particularly with some of their most vulnerable workers, the clear public safety risks with the outcome of Costco’s activities, and ongoing, repeated examples of reduced public access with deregulation of ownership and location rules, there is just little argument for wanting to change the Australian system,” he says.

“Rather than putting patients first, deregulated pharmacy ownership models seem to be more interested in pushing product at a price.”

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