Customer Sues Costco for Disclosing Erectile Dysfunction Prescription to Wife

Greg Shepherd claims that his efforts to reconcile with his ex-wife were dashed because of a Costco pharmacy error. Shepherd sued the warehouse chain after a store pharmacist wrongly told his wife that his erectile dysfunction medication was ready for pickup.

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Shepherd said Costco had mistakenly filled the erectile disfunction prescription after he was given a sample by his doctor during a checkup. He said he told Costco to cancel the medication. When he called to ask whether his ex-wife could pick up his regular prescription medication, the employee said she could and it was ready. The employee did not tell Shepherd the erectile dysfunction medication prescription had not been canceled.

When Shepherd’s ex-wife went to Costco, the employee gave her both prescriptions, according to Shepherd’s lawsuit. She didn’t accept the erectile dysfunction medication, and she and the employee allegedly joked about it. When the ex-wife spoke with Shepherd, she told him that she knew about the erectile dysfunction medication and no longer wanted to be with him, ending any reconciliation effort, the suit says.

The Arizona Supreme Court ruled Monday that Shepherd can sue for negligent disclosure of medical information. However, Shepherd will still have to rebut by clear and convincing evidence the presumption that Costco acted in good faith, as required by the Arizona immunity statute.

Shepherd’s lawyer claims there was bad faith in Costco’s continued efforts to fill the prescription because Costco gives managers bonuses based on sales, and pressures them to fill unwanted prescriptions.

What Is HIPPAA and How Does it Apply to Pharmacies and Hospitals?

The federal HIPAA Privacy Rule, part of the Health Insurance Portability and Accountability Act of 1996, was enacted to protect personally identifiable health information. Under HIPAA, however, spouses can still permit each other to see other’s health information and pick up prescriptions.

A HIPAA violation does not give rise to a private cause of action to sue. A patient cannot sue for a HIPAA violation. A patient can file a complaint with the Department of Health & Human Services (HHS). HIPAA provides both civil penalties and criminal penalties for the mishandling of PHI.

It is, however, possible for a patient to sue and obtain damages for violations of state laws (provided the patient can prove damages) like negligence.

In 2013, a Walgreens pharmacist in Indiana reviewed the prescriptions health records of a woman who had once dated her husband. Walgreens had to pay a $1.4 million fine, even though they had strict privacy policies in place and the employee admitted she knowingly violated the company’s rules. Pharmacies can be held liable if their employees violate HIPAA.

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When a reporter went through the trash of a CVS Pharmacy in 2009, they found that employees were disposing of old prescription bottles with labels that had health information still intact. CVS was fined $2.25 million for violating HIPAA regulations.

A few days after the reality television star Kim Kardashian gave birth at Cedars-Sinai Medical Center in 2013, six employees were fired for inappropriately accessing patient medical records.

What do you think? Can a pharmacy really be held liable for this guy’s marriage not working out?

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