Wednesday, December 29, 2010

Compounding Costs

It's a rare day when insurance companies, employers, and labor unions all agree on something, yet that's exactly what is happening in California on the issue of "compound" medications.

From the Los Angeles Times:

An unusual coalition of corporations, insurance companies and labor groups is pushing for legislation that would put restrictions on the customized medicines known as compounded drugs, saying the prescribing of these drugs has become rife with abuse.

Compounded drugs are medications whose ingredients have been tailored to meet a patient's individual needs. Proponents say they improve treatment, but critics say they are typically made with many of the same ingredients found in over-the-counter pills and generic prescription drugs and simply boost profits for doctors and pharmacies.

The doctors who "prescribe" these drugs assert that the compounded drugs are customized to fit their patients' needs and drug sensitivities. Unnecessary ingredients in FDA approved drugs are removed, and other elements added. For the extra work involved, the patient gets a much better medication.

Doctors who prescribe and hand out such compounded painkillers and analgesic salves as KetoLido and Lidorub said their patients need them.

By removing certain nonessential elements or turning pills into ointments and salves, pharmacists can develop medicines that, for instance, avert drowsiness, allergic reactions, problems with swallowing pills or damage to the kidney or liver.

Sounds good, right?

Perhaps, but the doctors and pharmacies involved expect to get paid for the "extra effort" involved, and there's the rub.

One bill that a doctor submitted last month to an insurer sought $1,058 for a prescription compound containing Ketoprofen powder, a non-opiate pain medicine, said the person, who spoke on condition of anonymity because the bill could become part of a confidential state investigation.

The insurer paid the physician $36, the value listed for the active ingredient on the state pharmaceutical reimbursement schedule, the person said. A similar, 30-day supply of Ketoprofen powder in prescription capsule form sells for $15.79 at Costco pharmacies. ...

Suspicions of abuse have been fueled by advertisements for compounded drugs on Craigslist two years ago that offered "doctors who see work comp patients … $20K a month dispensing meds."

"There are no legal issues, no billing — we do the billing, no costs or risks to the doctor," the ads said. "We have over 400 doctors in California."

The ads boasted that "we have a great product an Anti-Inflammatory Cream that's compounded and has spectacular results" and that doctors could make a $141.60 profit on every prescription.

And that, my friends, is just one reason why health care costs continue to rise.

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