It’s been a week of focus on pharmacy, so forgive one last post on the subject.

Now that Illinois has joined CT MS AR SC GA and a host of other states that have addressed the outrageous practice of charging unconscionable prices for physician-dispensed repackaged drugs, what’s to be done in other states that have yet to stop the practice?

I’m talking Florida, Maryland, North Carolina, Hawaii, where some politicians have blocked fixes, or the regulatory process has yet to gain traction.

It is quite likely that dispensing companies are experiencing a significant cash flow crunch. They didn’t expect Illinois to end upcharging for repackaged drugs, and their projections of millions in revenue from the Land of Lincoln are now shattered.

An increasing number of payers are applying retail pharmacy rates to bills for physician-dispensed scripts in Florida – slashing reimbursement to a fraction of dispenser’s billed charges.

This latter approach is also being employed in Maryland and a couple other states where payers are increasingly fed up with politicians’ votes allowing dispensing of repackaged drugs.  The pols’ favoring of huge out of state contributors over taxpayers and employers has yet to cost them politically, but in the interim some payers are refusing to pay the tab, and are disputing dispensers’ bills thru adminstrative processes.

Sure, payers may well lose some disputes in some states, or perhaps many in many states, but the pressure they are bringing to bear is hurting dispensers and their enablers and owners.

The mood inside dispensing companies’ office must be very angry, extremely frustrated, and even shocked that employers and payers are finally refusing to pay their bills. If you listen carefully, you can almost hear their shrill whining…”Who do they think they are? How dare they not pay us what we want when we want?! Don’t they know they have to?!”

To which I would answer:

We are the fiduciaries responsible to our policyholders; We pay what we are legally obligated to pay; We’ll rely on the legal system to tell us what to pay, not some profiteering plunderer’s made-up bill.

Feel free to quote me.

Prices for brand drugs were up 13 percent in Q3 2012 from Q3 2011, while generic prices actually decreased 21 percent.  

That’s the headline from Express Scripts’ just-released drug trends report, which attributes the huge price increase to brand manufacturers seeking to maximize profits before their popular drugs’ patents expire. The good news is increased generic utilization helped keep total drug costs relatively flat.

Several specific drugs saw even larger increases.  Drugs to treat Hepatitis C (not uncommon in workers’ comp, especially for health care workers) had the largest specialty spend increase, 117 percent.

To give you a frame of reference, ESI’s total annual drug spend is slightly more than $800 per person.

Utilization was up 0.7%, while prices (overall) increased 2.8%.  Combining utilization and price produces cost trend.

A quarter of drug costs are for antidepressants and mental/neuro disorder medications.

Notably, opioids and narcotics represent a very small percentage of ESI’s total spend, which is based on group health, medicare, medicaid, and other lines.

Update – this morning we find out that only two states – MO and TX – test compounded drugs, and their findings are alarming indeed.  The strength of the potions concocted by compounders can vary greatly, with Texas determining a quarter of the compounds they tested were “too weak or too strong” and MO finding the potency is as much as three times higher than the compound was supposed to be.

Although the FDA’s ability to regulate compounders is very limited, the agency studied compounds produced by12 different pharmacies a decade ago; a third of the products failed one or more standard quality tests.  Another test in 2006 found the same results.

According to the NYTimes, the “International Academy of Compounding Pharmacists suggested that [compounding pharmacists] respond to any request for samples by saying, “We do not compound or distribute ‘samples’ of any of our prescription medications to anyone.” And if a compounded drug was on the premises, the trade group added, a pharmacist should say it was awaiting pickup by a patient…the memo is emblematic of the industry’s frequent and often successful attempts to fend off regulators at a time when concerns are growing about the quality of compounded drugs and the uncertain provenance of their ingredients, some of which originate in China [emphasis added] and flow through various repackagers and middlemen with little scrutiny, according to interviews with health experts and government records.”

Original post – When will we hear of the first workers comp claimant to die from a faulty compounded drug?  Has it happened already?

This isn’t hyperbole – compounded drugs have blinded victims and killed before – a  young woman using a topical anesthetic, a patient treated for pain, nine deaths from defective solutions produced by an Alabama compounder, and the most recent  – and worst – outbreak of meningitis.

In all, there have been at least 200 “adverse events” involving 71 compounded products over the last twenty years. Yet lax – or non-existent – regulation continues to this day.  Compounding pharmacies are regulated (for the most part) by the states.  The reality is many states are poorly equipped to deal with the issue, and many states really don’t do much to regulate/monitor/enforce regulations related to compounding pharmacies.

This from Michael Cohen, an expert on the issue:

Compounding pharmacies should be testing and monitoring the environment in which products are compounded, training and closely supervising staff, adhering to the recognized standards for compounding safety that were formulated by the United States Pharmacopeia (in Chapter <797> of the USP) and detecting process deviations before they cause harm. Yet, an analysis of recent cases of contamination of products from compounding pharmacies that have led to adverse health outcomes revealed that breaches of standards, unsafe staff behaviors, untrained and unskilled personnel, improper use of equipment, extended beyond use dating outside of manufacturer labeling without sufficient testing, and/or a general lack of good compounding skills had been involved in almost all cases.…Without federal oversight and/or greatly improved state oversight of compounding pharmacies, patients will continue to be harmed.

So…why aren’t the Feds more involved?

Glad you asked.  Turns out there have been repeated efforts to increase oversight of compounding pharmacies, however they have been stymied by effective lobbying from, among other groups, the International Academy of Compounding Pharmacists.

The IACP claims “compounded medicines are a critical part of modern, individualized health care and provides them the necessary tools to ensure that access to personalized medication solutions remains possible.”, yet they’ve been instrumental in successfully blocking federal regulation of “mass-compounding” thru an effective lobbying campaign involving Congress.

While compounding advocates talk about the need for individual, customized medicine, they lobby to prevent oversight of what are really drug manufacturers masquerading as compounders.

The result is now evident – 23 dead patients, and more may be coming.

For workers comp, the implications are clear. The drug produced by NECC is used in treating back pain via epidural steroid injection, an all-too-common procedure in comp.  As of now, there are 281 infected patients, and with an incubation period of up to six months, many thousands of patients agonizing over their potential fate.

What does this mean for you?

If you are a workers comp payer,

1. Figure out if any of your claimants may be at risk.  The list of affected facilities is here.
2. Search for the facility name in your medical bill data, along with the CPT codes associated with ESI.
3. Identify any claimants that may have been affected, and get your medical director and nurse case managers involved.
4. Get your subro folks involved.
5. Oh, and tell your Governmental Affairs people to ask Congress to fix the oversight problem.  Unless you want to repeat this process again.

Why do physicians dispense drugs to workers comp patients?
To hear them tell it, it’s all about convenience, better outcomes, lower cost, faster return to work – all assertions made without a shred of evidence.
The reality is rather less noble, but best to use their own words to show how they pitch their programs to docs…
MedX Sales
“Workers Compensation (Incredibly Profitable)
Physicians that work in occupational medicine and pain management typically handle workers compensation cases and therefore submit claims to workers compensation insurance. Unlike the other scenario where the physician collects cash for prescriptions, in the case of workers comp, the physician would submit claims to the insurance company for payment of the drugs. Here the physician’s payment reimbursement is based upon Average Wholesale Pricing or (AWP). Each repackager creates their own AWP for each drug that is sold by the physician. Each state also has different reimbursement policies relating to AWP but rest assured the potential profitability is staggering. A physician paying $6.00 for a prescription could be reimbursed as much as $100.00 or more based on AWP.”
also from MedX
You could be losing $50,000 or more each year by not dispensing today!

Physician Dispensing Solutions
Learn how to generate over $100,000 annually with our physician dispensing program.
Do you treat workers compensation patients? Unlike regular patients, dispensing medication to workers compensation patients requires submitting a claim to insurance in order to get paid. Physicians that dispense medication to their workers compensation patients earn revenue base [sic] upon the state’s insurance reimbursements schedule and the Average Wholesale Pricing (AWP) for that drug. It is not unusual for a physician to earn over $100,000 or more every year by dispensing medications to workers compensation patients.
Clinical Rx Solutions

A physician who dispenses medication to their workers compensation patients earns revenue based upon the state’s reimbursement schedule and the average wholesale pricing (AWP) of that medication. It is not unusual for a practice to earn over $100,000 or more in additional income per year by dispensing to workers compensation patients.
[check out the income calculator, a tab pops up when you hover your mouse on the “Workers Compensation Dispensing Program” button top left]
Physician Partner
Benefits to the Practice
Maximize Profitability
Reduced Claims Processing Workload
Increase Monthly Cash Flow
RxBranch
Can I really earn $50,000 or more each year by dispensing? Yes but that all depends on the size and type of practice as well as the number of patients seen each day. Based upon averages, the average physician will see 100 patients and write 100 prescriptions or more each week. Asking yourself simple questions such as how many patients you see per day or per week will quickly give you an idea how much money you could be earning by dispensing. Wholesale cost per drug and what you charge the patient is the final determining factor on calculating potential earnings. Most of the generic drugs will cost you about $5.00.
A-S Meds
7. What is the profit potential for my practice?
The new revenue source can be very significant. As with any program, utilization is the key. We provide you with a personalized Proforma based on your customized formulary, number of daily patients and number of prescriptions per patient. This will more accurately predict your potential profit. We have clients ranging from $1,000 to $50,000+ profits per month, with an ‘average’ profit of around $7 per script.
The practice earns all of the cash profit, the workman’s compensation profit and the managed care profit.
[emphases added]

From a note I received from several folks –
I’m writing in the hope that you’ll submit comments to FDA limiting drug manufacturers’ promotion of the long-term use of opioids for chronic non-cancer pain.

PLEASE DO THIS NOW. IT TAKES TWO MINUTES.
Here’s the link where you can submit comments:
As you may have heard, a couple of weeks ago the group Physicians for Responsible Opioid Prescribing filed a petition with FDA. The petition will prohibit drug manufacturers’ promotion of the long-term use of opioids for chronic non-cancer pain and the medical community will be informed that this practice has not been proven safe and effective.
In the comments box, say something like:

I support PROP’s petition placing controls on drug manufacturers’ promotion of the long term use of opioids for chronic non-cancer pain. Until and unless there is sound scientific evidence of the efficacy of opioids for CNCP this promotion should be severely limited.

More detail…
From PROP – “We believe that this will help reduce overprescribing of opioids. And since it’s overprescribing that’s harming pain patients and fueling the opioid addiction epidemic, the label change could help bring this public health crisis under control...This request has received support from members of Congress, including Rep. Mary Bono Mack and Hal Rogers, so we believe that FDA is paying close attention.”
You can read the petition here; and here’s a press release about the petition that was issued by Public Citizen:
FDA just started receiving comments from the public about the petition. It takes just a couple of minutes to submit comments. And just a few sentences are fine. Just make sure to state clearly in the first or second sentence that you support the petition. If you want, you’re able to upload attachments, including medical articles, newspaper stories or anything that might help you get your point across.
FDA will periodically post comments that are submitted. So far, comments opposing the petition outnumber comments supporting the petition… so PLEASE submit your comments and please ask others to submit comments too.
The petition is here.