In 2007, California became the first state to change reimbursement rules with the intention of equalizing the prices paid for physician- and pharmacy-dispensed prescriptions.

A 2012 WCRI study found that the 2007 change in California reduced the average prices paid for physician-dispensed prescriptions to close to the prices paid to pharmacies for the same drug. After the reform, many physicians continued to dispense in California – nearly half of all prescriptions were dispensed at doctors’ offices in post-reform California.

Since then, the WCRI says that a number of states have adopted reforms similar to those in California. As of July 2013, at least 13 other states have made law or rule changes with the intention of reducing the prices paid for physician-dispensed drugs while continuing to allow physicians to dispense drugs directly to their patients. These states include Alabama, Arizona, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Michigan, Mississippi, Oklahoma, South Carolina, and Tennessee. Florida also made law changes, effective July 2011, that were aimed at eliminating so-called pill mills by prohibiting all Florida physicians from dispensing Schedules II and III narcotics.

A few states have sought to prohibit or severely limit physicians from dispensing prescription drugs directly to their patients. In the United States, six states prohibit physician dispensing in general; Massachusetts, New York, and Texas, Montana, Utah, and Wyoming. Louisiana limits physician dispensing of narcotics to a 48-hour supply.

According to the new WCRI study, The Prevalence and Costs of Physician-Dispensed Drugs, most states still allow physicians to dispense prescription drugs at their offices directly to the patient. Previous WCRI studies reported considerably higher prices paid for physician-dispensed prescriptions when compared with prices paid to pharmacies for the same drug. These studies also reported rapid growth of physician dispensing in several study states.