Pharmaceutical Compounds: Investigating and Regulating Their Use (Part 2) | DC Metro Area Medical Malpractice Law Blog

In our last post, we discussed how pharmaceutical companies have begun to profit from the proliferation of compound drugs, as reported by the New York Times. Today, we will examine the measures various entities have taken to investigate and regulate these products.

Catamaran, a pharmacy benefits manager, discovered their spending on compounded drugs had increased fourfold over the past two years. The company is now making a concerted effort to examine such claims to determine their validity. Similar companies – including Blue Cross Blue Shield, Harvard Pilgrim, and state workers’ compensation plans – are now doing the same.

Express Scripts, meanwhile, recently decided to stop payments for over 1,000 of the ingredients compounders commonly use. This 95 percent reduction in spending has saved money for consumers, health plans, and employers alike, while cutting into the profit margins of compounding pharmacies.

According to Dr. Sumit Dutta, Catamaran’s chief medical officer, such measures remove the “profit motive” driving these companies to produce more complex and expensive medications.

In Southern California in June, 15 individuals — including financial brokers, doctors, chiropractors, and pharmacists — were indicted for participating in a “kickback scheme” targeting workers’ compensation plans. Kareen Ahmed of Landmark Medical Management allegedly helped to purchase accounts receivable from health providers awaiting payment for workers’ compensation related services.

Some states have responded to the compounding pharmacy problem by imposing payment limits (Ohio) and limits on the number of ingredients payable per prescription (Georgia).

However, the compounding industry refuses to go down without a fight. The new Patients and Physicians for Rx Access, founded in June, advocates for compounding pharmacies, claiming that patients need compound drugs — that standard medications often do not meet their health needs.

Have you or a loved one experienced negative effects as a result of a contaminated or incorrectly formulated compounded drug? Call a D.C. medical malpractice attorney today to discuss your legal options.

Want to learn more? Check out: Compounding Pharmacy Report Reveals Limited Regulation