image of silk fabric and dry skin

Z. D. Draelos, MD

Dermatology Consulting Services, High Point, NC, USA
Department of Dermatology, Wake Forest University, Winston-Salem, NC, USA


The in-office dispensing of topical skin care products by dermatologists is a source of frequent debate. Guidelines for proper dispensing have been penned by various medical organizations, yet the controversy continues. With the increasing number of physician-dispensed lines available for sale, combined with mounting medical financial issues, the ongoing debate surrounding inoffice dispensing will continue.

Key Words:
Physician dispensing, guidelines, ethics

One of the hottest current debates in dermatology surrounds the premise that dispensing provides a valuable service to patients,1-3 while opponents argue that dispensing is only a source of physician profit.4,5 Most states do not allow the dispensing of prescription pharmaceuticals, which means only over-the-counter (OTC) skin care products can be directly sold to patients. This includes moisturizers, sunscreens, serums, toners, cleansers, vitamins, colored cosmetics, OTC acne formulations, hair care products, and nail adornments, to name a few. In short, anything sold in a mass market retailer, such as Wal- Mart© or Target, can be sold by a physician as long as that physician holds a business license and pays the appropriate sales tax. No one would argue that it is unethical for these products to be sold to consumers, but the situation may be different when it involves a doctor-patient relationship. Perhaps this issue deserves further consideration.


The first point of controversy surrounds the issue of professionalism. Physicians are classified as professionals, meaning that they give advice and make decisions from a selfless perspective. The patient seeks this advice because he or she feels that the physician will put aside personal financial gain and treat the patient in the best manner possible. The sale of office-dispensed products tests this premise. The dispensing physician may argue that the best product to improve the patient’s skin can only be found in a product sold from their office. This means that the opportunity to purchase such a product can provide the patient with enhanced care and allows the physician to offer a valuable service. In addition, some proponents suggest that on-site purchases can save time and allow the patient to get a recommendation and product simultaneously. However, other physicians contend that the practice may promote unprofessional or unethical conduct when a retail component is
incorporated into a clinic setting. Certainly, there are two perspectives to this argument.

The key to finding the truth in this controversy is to analyze the value of products sold in a physician’s office. Is there any topical OTC product that is so unique in a physician-dispensed line that it could not be obtained in the mass market? Is there any ingredient available in a physician-dispensed line that must be used over all other similarly functioning ingredients available in mass market retailers? Is the physician providing something important or a biased recommendation? This is the key ethical question that all dispensing physicians must
critically ask themselves.

The Price of In-Office Dispensed Products

The second point of controversy involves the price of inoffice dispensed products. Most manufacturers of these lines recommend that physicians double the wholesale price to obtain the retail price. This may appear to be only a 100% mark up, but in actuality, it is much more. The manufacturer has already taken a 200%-500% profit margin to arrive at the wholesale price, which means that the physician in selling a product to the patient at 300%-600% above its cost. Certainly, a profit must be made on the sale of any OTC formulation, but the key ethical question is how much profit can be justified.

The Efficacy of In-Office Dispensed Lines

The third point of controversy is the efficacy of inoffice dispensed lines. Most dispensed products are designed to function in the personal hygiene or antiaging realm, not the pharmaceutical realm. This means that product expectations are reduced while product safety is increased. Dispensed lines are not intended to replace prescription therapies, but rather to enhance their efficacy. This may be the case with dispensed acne treatment products containing benzoyl peroxide that are combined with topical prescription retinoids and antibiotics to deliver control of noninflammatory acne lesions. Perhaps dispensed anti-aging creams might increase the tolerability of tretinoin, but what else can they offer? Does the topical botanical cocktail really deliver something beneficial to the skin that can be medically documented by the physician? It is this evidence-based approach to office dispensed products that is lacking in some instances, depending on the research efforts of the product line manufacturer. Compatibility is called into question when uniting the science of pharmaceuticals with their certainty of efficacy and the puffery of claims associated with some anti-aging creams.

The Meaning of the Physician-Businessperson

The prior discussion leads to our fourth issue, which is the meaning of the physician businessperson. Is it possible to be a physician-businessperson or is this phrase an oxymoron? In the US, a modern business model for some entrepreneurial physicians is labeled the medispa. Physicians operating medispas come from no particular background and may be dermatologists, plastic surgeons, family practitioners, internists, gynecologists, etc. They supervise the treatments provided by a staff of nurses and aestheticians including body massages, laser hair removal, cellulite wraps, manicures, botulinum toxin injections, intense pulsed light facial peels, and hyaluronic acid filler injections, to name a few. The business concept seems to combine the minimally risky aesthetic medical procedures with the relaxation and adornment practices learned in cosmetology school. These establishments frequently sell physician dispensed product lines as an additional source of income. These products are recommended by the aestheticians and nurses that provide the services and not by the supervising physician, who does not see every client. If the recommendation to purchase from an in-office dispensed line does not come directly from the physician, does the product purchase carry the same value? Is it a medical service or a business venture similar to a cosmetic counter at a department store? Is the physician functioning in a medical realm or a business realm?

Patient Evaluation of the Products

The final point of controversy is the ability of the patient to objectively evaluate product purchases. This may be difficult when the patient feels compelled to listen to the sales pitch of an aggressive aesthetician or is directed to walk by the sales counter when exiting the medical office. The patient may conceive that products must be purchased in order to continue a favorable patientphysician relationship, or to receive medical care in the office. A patient in a medical office is a captive audience and this situation must not be abused. The patient should have the option to discuss product sales or opt out of the conversation when checking in to a medical office. Perhaps this discussion should take place at the front desk. Patients could be asked about product sales and their wishes obeyed.


Many professional organizations, such as the American Medical Association and the American Academy of Dermatology, have weighed in with opinions regarding the practice of office dispensing.6,7 While the wording and details vary from organization to organization, the basic spirit of the recommendations are to preserve medical ethics. Indeed, this is key. However, there is no agreement among physicians as to what constitutes ethical dispensing. Thus far, this discussion has perhaps raised more questions than it has answered. Only through this type of soul searching can the true value of in-office dispensing be determined.


Moving forward, it would seem that many issues could be resolved by developing a physician board that would approve products for in-office dispensing, much like the US FDA provides approval for pharmaceuticals. This board could evaluate the efficacy of skin care lines manufactured for in-office dispensing that is based on research provided by the manufacturer. Performance guidelines could be established requiring rigid scientific studies to meet predetermined endpoints. Only dispensed lines that meet these requirements would be certified for in-office sales. This type of certification would raise the bar on product performance and perhaps offer something truly unique in skin care. Perhaps a proposal such as this could quell the controversy regarding physician dispensing.


  1. Farris PK. Office dispensing: a responsible approach. Semin Cutan Med Surg 19(3):195-200 (2000 Sep).
  2. Higham R. Integration of moisturizers and cleansers into a busy dermatology practice. Cutis 76(6 suppl):32-3 (2005 Dec).
  3. Nestor MS. Dermatology practice management enhancement: implications for dermatology in the age of managed care. Semin Cutan Med Surg 19(3):163-9 (2000 Sep).
  4. Miller RC. Dermatologists should guard their patients’ purse, not pick their pockets! Arch Dermatol 135(3):255-6 (1999 Mar)
  5. Epstein E. Are we consultants or peddlers? Arch Dermatol 134(4):508-9 (1998 Apr).
  6. AMA Council on Ethical and Judicial Affairs. Sale of health-related goods from physicians’ offices. CEJA Opinion 8.063 issued December 1999 and adopted June 1999.
  7. AAD Position Statement on Dispensing. Approved October 1998 and amended September 1999.

The American Academy of Dermatology’s
Position Statement on Dispensing

(Approved by the Board of Directors October 12, 1998; Amended by the Board of Directors September 26, 1999)
Reprinted with permission from The American Academy of Dermatology

Dermatologists should not dispense or supply drugs, remedies or appliances unless it is manifestly in the best interest of their patients.

Dermatologists who dispense in office should do so in a manner with the best interest of their patient as their highest priority, as it is in all other aspects of dermatologic practice.

It is ethical to dispense, by sale, prescription or non-prescription drugs, to patients in a dermatologist’s office except in the following circumstances:

  1. When the dermatologist places his/her own financial interests above the welfare of his/her patients.
  2. When creating an atmosphere which is coercive to patients such that they feel compelled to purchase drugs from the dermatologist.
  3. When dispensing drugs under a dermatologist’s private label without clearly listing the ingredients, including generic names of the drugs.
  4. When dispensing to patients drugs which are easily available at proprietary pharmacies without advising patients of this availability.
  5. When representing drugs as being a special formula not elsewhere available, when that is not the case.
  6. When selling health-related products whose claims of benefit lack validity.
  7. When refusing to give refills of drugs except that they be purchased from the dermatologist.
  8. When charging patients at an excessive mark-up rate.