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Pharmaceutical Compounds: What They Are and How They Cost Consumers (Part 1)

Posted By Regan Zambri & Long || 27-Aug-2014

The rising costs of health care in the United States are no secret to doctors, patients, or pharmacists. Lifesaving drugs, procedures, and equipment continue to place a high cost burden on consumers and their insurers.

Among the fastest-growing and most expensive treatments patients received as of late are compounded drugs, according to a recent article by the New York Times. These formulations consist of custom ingredients to meet the unique needs of patients, from diaper rash to pain and scarring.

Created by compounding pharmacies, these drugs present alternative treatments for individuals unable to take mass-produced drugs due to ingredient intolerances, an inability to take oral doses, or other complications. Pharmaceutical compounds frequently cost exponentially more than their standard counterparts, reaching into hundreds or thousands of dollars.

Compounding companies claim the prices of their products have increased due to rising oversight of their international chemical suppliers. However, a change in 2012 to how pharmacists bill insurers for compound medications likely points to a more compelling reason.

Whereas pharmacists used to submit claims based on the price of the main ingredient in a compound, they now bill based on each ingredient in a compound. Incidentally, the number of ingredients in each compound has begun to increase.

Not only are insurance companies and patients bearing the brunt of these excessive costs – the safety of pharmaceutical compounds has also recently been called into question. A recent high-profile example was a steroid injection that sickened 750 and killed 64 after being tainted with a fungus at the New England Compounding Center.

This troubling news comes as pharmacy benefit managers note compounded drugs often yield no more benefits to patients than their mass-marketed equivalents. In addition, compounds require no FDA approval, putting their safety and efficacy further into question.

In Part 2, we will discuss how the medical and legal communities have reacted to the high costs of compound drugs.

If you or a loved one have experienced injury or illness due to faulty pharmaceuticals, contact a D.C. medical malpractice attorney today.
 

Want to read more? Check out this article: Senate Drafts Bill to Regulate Compounding Pharmacies



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