Vetsource Settles Suit Against Nevada Pharmacy Board

Vetsource, the Oregon-based online veterinary pharmacy, recently settled a federal antitrust suit against the Nevada State Board of Pharmacy in which Vetsource accused the board of misusing its position to exclude the company as a competitor.

“A lot of time, money and effort was spent to ensure that veterinary practices can continue to provide a higher level of service to their clients,” said Vetsource’s Chief Operating Officer Andy Bane.

According to federal court documents, the issue began in February 2015 when a pharmacist on the board “tried to intimidate Vetsource into ceasing operations in Nevada,” saying the corporation’s business model “violates Nevada’s anti-kickback statute.” Anti-kickback statutes prohibit health care providers and suppliers from giving or receiving remuneration for the referral of patients or services covered by most federal health programs.

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Vetsource attempted to explain its business model to the board, but to no avail. On February 27, 2015, the Nevada Pharmacy Board sent a letter to Vetsource demanding that the company discontinue services in the state. But Vetsource argued that the company was not violating any Nevada laws.

According to Vetsource, Nevada has allowed “licensed pharmacies to ship medications prescribed by offsite veterinarians directly to farms and ranches” and that Vetsource’s model was simply adapted for domestic pet medications. Vetsource is licensed to operate in Nevada under Nevada State Board of Pharmacy retail and wholesale licenses and currently operates in all 50 states as a Veterinary-Verified Internet Pharmacy Practice Site accredited pharmacy.

Even so, the pharmacy board sent another cease-and-desist letter in May 2015 and told Nevada veterinarians they would be in violation of state law if they used Vetsource services.

With a hearing scheduled for March 2016, Vetsource took a leap of faith and brought its own complaints to the forefront. Vetsource’s federal antitrust complaint stated pharmacy board members were trying to “stifle innovative competition,” that the allegations were unfounded and that the board was trying to protect its “illegal monopoly on pet medication.”

According to Vetsource, its business model results in competitive pricing, greater efficiency in pet medication delivery and increased quality for purchasers — all of which were threats to pharmacists. Vetsource does not receive any remuneration for patient referrals as the pharmacy board claimed.

In the end, Vetsource won the legal battle. Although the terms of the federal lawsuit settlement were not disclosed, Vetsource continues to operate in the state and the complaint from the Nevada Board of Pharmacy was rescinded.

“At the core of this lawsuit was the ability of veterinarians to operate their businesses competitively and efficiently,” Bane said. “This was a fight we were willing to take on for the industry.”