Antitrust Suit Against Nevada Pharmacy Board

     LAS VEGAS (CN) – The Nevada State Board of Pharmacy is controlled by pharmacists who conspire to protect their illegal monopoly on pet medication, a national pet medicine firm says in a federal antitrust complaint.
     Oregon-based Strategic Pharmaceutical Solutions does business as VetSource Home Delivery, and says it is registered and licensed in Nevada pharmacy. It claims the Board of Pharmacy views its direct-delivery business as a threat because it gives Nevada veterinarians and pet owners access to cheaper pet medicines.
     VetSource says the Nevada Board of Pharmacy “has a history of engaging in anticompetitive conduct under the guise of enforcing the state’s pharmacy regulations” and “is controlled by private individual members” who sell and distribute pet medicines.
     “These Pharmacy Board members are misusing their position to seek to exclude innovative competitors,” and exceeding their authority, to punish competitors, VetSource says.
     Six of the seven members of the Pharmacy Board are active, registered pharmacists, who are “competitors” with VetSource in Nevada, and there is “no politically accountable state official” to review its decisions or provide oversight, VetSource says.
     “Drop-shipping” of veterinarian medications “has long been permitted under Nevada state law,” VetSource says, without defining “drop-shipping.” It says its direct delivery business threatens the traditional pharmacists’ profits – including the pharmacists on the state board.
     “To stifle this innovative competition,” the board is threatening to revoke VetSource’s pharmacy license and force it out of the market, based on unfounded accusations that its business model is illegal, VetSource says.
     Defendant Pharmacy Board Executive Secretary Dave Wuest, also a pharmacist, declared in February 2015 that VetSource’s business model violates state anti-kickback regulations, “tried to intimidate VetSource into ceasing operations in Nevada” and claimed the board would win if VetSource tried to fight his decision, VetSource says.
     Wuest made the threat after hearing a “very brief explanation” of VetSource’s business model and before complete materials were made available or reviewed, thereby “demonstrating the pretextual nature of the Pharmacy Board’s unreasonable anticompetitive conduct,” VetSource claims.
     On Feb. 27, 2015, “in furtherance of the conspiracy” to remove it from the Nevada market, VetSource says, the board sent it a letter demanding it immediately discontinue its “outsourced hospital pharmacy service,” citing improper interpretations of state regulations.
     The board sent another cease-and-desist letter in May and told Nevada veterinarians not to do business with VetSource, due to violations of state law, VetSource says.
     VetSource says it takes orders from veterinarians, and its subsidiary wholesaler sells the medication to them. The veterinarians take possession of the title to the medications, which they sell to clients at retail prices; VetSource’s home-delivery pharmacy ships the prescriptions directly to the pet owners.
     VetSource collects the total cost of the transaction and pays the veterinarian via an eMerchant account.
     VetSource says it does business with 250,000 customers in every state, through nearly 5,000 veterinarians, including 35 in Nevada. It says several entities, including “various state boards of pharmacy, expert legal counsel for these boards, trade and professional associations, and regulatory agencies,” have determined that its business model is legal.
     VetSource seeks an injunction stopping the board from banning it from Nevada, damages for Sherman Act violations, unfair trade practices and conspiracy in restraint of trade.
     VetSource attorney James D. Boyle was not available by telephone Monday night.
     The Pharmacy Board did not immediately respond to an emailed request for comment Monday.

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