Federal delay of identity theft rules wins praise from independent Rx lobby

ALEXANDRIA, Va. The independent pharmacy lobby is hailing a decision by the Federal Trade Commission to freeze temporarily a new rule that would require retail pharmacies and other healthcare providers to step up point-of-sale identity theft protections.

The FTC announced Friday it would delay enforcement of the so-called “Red Flags Rule,” which was originally scheduled to take effect today, until Dec. 31, 2010. The delay follows a move in Congress to narrow the scope of the regulation.

The new regulation is designed to protect consumers from identity theft, but the National Community Pharmacists Association has argued that it is too broadly written and would hamper the operation of retail drug stores with new red tape.

NCPA EVP and CEO Bruce Roberts praised the agency’s decision. “We commend the FTC and its chairman Jon Leibowitz for taking this action,” Roberts said Friday. “This well-intentioned regulation is targeted at creditors and financial institutions, requiring them to have identity theft detection procedures in place.”

Unfortunately, as it stands today, the mandates also would apply to community pharmacies and other small healthcare providers, creating a significant administrative burden for entities that aren't primarily in the lending business.

“Specifically, community pharmacies that regularly extend credit to customers through patient charge accounts-sometimes known as house accounts-would be covered by the rule,” Roberts continued. “The FTC's moratorium on enforcement gives Congress additional time to approve an exemption for community pharmacies and others.”

The delay marks a victory for the group, which has been urging Congress to enact a pharmacy exemption. While the House of Representatives approved such a measure, the U.S. Senate has not taken it up. Most recently, Sens. Mark Begich, D-Alaska, and John Thune, R-S.D., introduced S. 3416 to provide a small business exemption. “NCPA will continue working with these and other members of Congress in an effort to exempt community pharmacies from these requirements,” noted the group, which represents more than 22,700 independent pharmacies.