A Lānaʻi pharmacy has reopened after a state regulatory board reversed a decision to shut down its ability to fill patient prescriptions. 

Lānaʻi Community Health Center contends in court documents that it started flying in a pharmacist from a neighbor island to dispense drugs at the clinic after a pilot program ended that had allowed the clinic to fill prescriptions under the remote supervision of a pharmacist on Maui.

But the state Board of Pharmacy argues that the health center does not have a license to operate outside the pilot project, which ended in June. 

After the health center filed a court injunction in a bid to compel a Honolulu circuit court judge to block the revocation of its pharmacy license, the clinic and the board struck a deal: The clinic has agreed to update its license application paperwork and the board has agreed to restore its license through the end of the year. The legal case has been dismissed.

State Board of Pharmacy Chairwoman Alanna Isobe said the board and the health clinic are working together to resolve what she described as a misunderstanding. Lānaʻi Community Health Center Executive Director Jacey Laborte declined to comment on pending litigation. 

Lānaʻi Community Health Center’s legal campaign to restore its ability to dispense drugs comes as the Legislature considers a bill that would allow pharmacists on neighbor islands to remotely supervise pharmacy services at rural medical clinics. Qualifying clinics would need to participate in a federal program that allows safety net providers to buy discounted drugs for low-income and uninsured patients. 

On Lānaʻi, telehealth has become a crucial tool for expanding patient access to specialized medical care that’s otherwise unavailable on this island of 3,300 residents. Adding pharmaceutical services would offer residents the ease of getting their prescriptions filled right at the doctor’s office.

The island does, however, have a brick and mortar pharmacy. Rainbow Pharmacy, Lānaʻi’s first full-service drug store, has been operating in Lānaʻi City since 2014.

Owner-pharmacist Kert Shuster said he’s not in favor of having a remote pharmacy at the Lānaʻi clinic when his retail store is two blocks away and has the capacity to serve the entire island.

Over on the neighboring island of Moloka‘i, Kimberly Svetin, president of the family-owned Molokaʻi Drugs, said allowing medical providers to outsource pharmacy services off-island would hurt the bottom line of rural retail pharmacies like hers.

“We are not a pharmacy desert,” Svetin said. “We have a pharmacist with 28 years experience on Lānaʻi. We have two pharmacists with more than 25 years experience on Moloka‘i. Why not use us? Why choose to do telehealth and mail order through a pharmacy on Maui when you have brick and mortar pharmacies right there willing to serve the need?”

The proposed legislation is modeled after the lapsed Lānaʻi Community Health Center pilot program that for two years allowed patients to fill their scripts at the clinic using telehealth supported by a pharmacist at Mauliola Pharmacy on Maui.

The bill targets federally qualified health centers and other clinics that serve a high percentage of uninsured and low-income patients and qualify for what’s called 340B discount drug pricing. The federal program allows nonprofit clinics and hospitals to buy drugs from manufacturers at a steep discount. Savings typically fall in the 20% to 50% range. 

The program is intended to help nonprofit hospitals and clinics generate savings to reinvest into patient care. There are few rules to regulate how health centers allocate those savings, but in Hawaiʻi the money has been spent on initiatives including financial assistance for low‑income patients, transportation to appointments, health education classes and Native Hawaiian health practices. 

Erik Abe, policy and public affairs director for the Hawaiʻi Primary Care Association, told lawmakers last week that Senate Bill 1279 is one of the most consequential health care bills making its way through the Legislature. Passing the bill, he said, would make medication more affordable for many rural patients.

The state Board of Pharmacy opposes the bill, however, contending that telehealth pharmacy is not the safest option for patients who could otherwise see a pharmacist face-to-face at a retail store.

There are in-person pharmacy services available on six of the Main Hawaiian Islands. Rainbow Pharmacy, Lānaʻi’s only brick and mortar pharmacy, is not currently enrolled in the 340B drug pricing program.

The measure cleared its final committee hurdle in the House last week, sending it on for approval by the full chamber before negotiations with the Senate over its final language.

Clinic: Pharmacy Closure Would Be ‘Catastrophic’

Lānaʻi Community Health Center is a safety net medical provider that treats Lānaʻi residents regardless of their ability to pay.

The clinic established a pharmacy in 2021, utilizing a pilot program to provide pharmacy telehealth services to patients under the remote supervision of a neighbor island pharmacist. 

There was no licensed pharmacist working at the health center while drug dispensing services were being managed by a pharmacist at Mauliola Pharmacy on Maui. 

The clinic has contended that patients appreciated being able to access prescription drugs at the same place where they receive other medical care. Teleconferencing technology was used to bridge the gap between patients with questions or concerns about a drug and the remote pharmacist supervising the program. 

A key difference between telehealth pharmacists and traditional pharmacists is that telehealth pharmacists do not dispense medications directly to patients. Instead, they train and supervise other health care workers to prepare prescriptions, giving a final approval before any medications are given to patients.

The health center dispensed 5,838 prescriptions to patients during the first year of the pilot program. The clinic reported four errors where a patient received the wrong medication and 36 errors that the health center described as administrative. No patients were harmed.

It cost the clinic $1,000 to $1,200 a month to hire Mauliola pharmacist Cory Lehano, whereas the clinic would need to fund a six-figure salary to hire a full-time pharmacist to staff the clinic’s drug dispensing program in person, according to Lehano, who offered feedback on the program at a Board of Pharmacy meeting.

In court filings, Lānaʻi Community Health Center argues that the closure of its pharmacy would be “catastrophic” to island residents, some of whom would have to pay more for prescription drugs.

At a Board of Pharmacy meeting in late 2023, Lānaʻi Community Health Center Associate Medical Director Jared Medeiros said 340B drug pricing helps the clinic bring down prescription costs for patients with high copays.

“I know there’s a lot of discussion about how the 340B pharmacy doesn’t benefit patients, it just benefits the business of pharmacy,” he said. “But I would definitely tell you that is wrong.”

Correction: This story has been updated to reflect the chronology of court actions in the case.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.

Civil Beat’s community health coverage is supported by the Atherton Family Foundation, Swayne Family Fund of Hawai‘i Community Foundation, the Cooke Foundation and Papa Ola Lōkahi.