Matt Powers
Matt Powers · January 26, 2023

AUSTIN, Texas—Yesterday, Texas’ 3rd Court of Appeals upheld a state law that forbids doctors from charging money for medications they dispense—even if they just want to recover their costs—unless they become licensed as pharmacists. Dr. Michael Garrett, an Austin-based doctor represented by the Institute for Justice (IJ), plans to appeal the decision to the Texas Supreme Court.

“This law isn’t about health and safety, it’s about money,” said IJ Attorney Josh Windham. “Texas allows all doctors to dispense medications if they do it for free. And it allows rural doctors, who work far away from pharmacies, to recover their costs. But urban doctors can’t. There’s only one straight-faced way to explain the law: It was designed to protect pharmacies’ bottom lines. And that’s not a legitimate use of government power.”

Texas is a national outlier. Forty-five states allow patients to choose whether to purchase their medications from doctors or pharmacies. That’s because doctor dispensing is safe, convenient and expands access to care. But Texas bans doctors from offering patients that choice—even if, like Dr. Garrett, they simply want to dispense routine drugs at cost (not for profit).

“I filed this case for one reason: To offer my patients more convenient access to the medications they need,” said Dr. Garrett. “Forbidding me from doing that isn’t making anybody safer. I’m disappointed the Court of Appeals didn’t see that, but I’m optimistic the Supreme Court will.”

IJ filed this case back in 2019. The following year, a trial court upheld the law. Yesterday’s decision affirmed that ruling. In doing so, the Court of Appeals refused to “second guess” the legislature’s decision to funnel prescriptions through pharmacies.

“The Texas Constitution requires courts to ‘second guess’ laws that do nothing to serve the public,” said IJ Senior Attorney Wesley Hottot. “This law is a perfect example of that: It allows doctors to provide a useful service unless doing so would compromise pharmacies’ profits—in which case it’s banned. It’s time for the Texas Supreme Court to step in and give this law the scrutiny it deserves.”

IJ has long challenged restrictions on economic liberty, including in a case that resulted in a major Texas Supreme Court ruling striking down a requirement that eyebrow threaders obtain an expensive and irrelevant cosmetology license. That decision, Patel v. Texas Department of Licensing & Regulation, held that Texas courts must meaningfully scrutinize how economic laws work in the “real world.”