Now that Illinois has fixed its physician dispensing upcharge problem, there’s one less target for the dispensing industry.  While that’s great for the Illini, it’s not so great for those in states where upcharging for repackaged drugs is still allowed.

That’s you, Florida.  And you too, North Carolina, and Virginia, and Michigan.

You can expect the prices for repackaged drugs to increase, in some places dramatically. With Illinois joining GA SC AR MS CT CA AZ and other states where upcharging for dispensed drugs is essentially banned, there are fewer states where the dispensing industry can still plunder employers and taxpayers.  The dispensing industry must continue to generate ever-higher margins for their owners and investors, so they are going to increase prices and push for more scripts for more claimants from more physicians dispensing.

As WCRI has ably reported, prices for drugs dispensed by Florida physicians have held remarkably stable, while prices in other state, notably Illinois, increased substantially.  There’s some thinking that the industry has purposely held prices in the Sunshine State down in an effort to remove some of the pressure to pass a legislative fix.  After spending the last two days at the Florida Chamber’s Insurance Institute and conversing at length with  legislators keenly interested in the topic, my sense is the issue will once again be front and center in Tallahassee.

One anecdote points to the extent of the problem.  A good friend from a PBM told me yesterday that one of their clients sent them a $4300 bill for a repackaged drug, and asked what was to be done.  The PBM told them:

1. that same drug would have cost $151 at a retail pharmacy
2. as this was in North Carolina, where the fee schedule is “pay as billed”, there wasn’t much they can do.

This isn’t by any means a rare event. It is happening every day in many states, likely even your’s.

As of yesterday, employers won’t have to pay outrageously inflated prices for drugs dispensed to their injured employers.  Until the legislature approved regulations capping drug prices for repackaged drugs, employers’ workers comp drug costs had been increasing at an astounding rate.

The regs now require insurers to base reimbursement for physician dispensed repackaged drugs on the price of the drug before it was repackaged.  Here’s the new language as published in the Illinois Register:

“If a prescription has been repackaged, the Average Wholesale Price used to determine the maximum reimbursement shall be the Average Wholesale Price for the underlying drug product, as identified by its National Drug Code from the original labeler.”

A big win to be sure, as physician dispensing companies, their investors and enablers were making millions in Illinois doing little more than taking pills from one bottle and putting them into another. The result? In Illinois, costs for physician dispensed drugs went up more than twice as fast as the number of scripts, because physicians dispensing medications raised their prices dramatically. According to a WCRI study, while the price of Vicodin purchased at a retail pharmacy dropped 2 percent over a year, physician dispensed Vicodin went up 66% over that three-year period.

I won’t get into how employers were able to defeat the efforts of physician dispensers, their investors and enablers to stop the new regulation except to acknowledge this would not have happened without

• the leadership of Mitch Weisz, Chairman of the Illinios Workers’ Comp Commission and Kim Janas, Secretary of the Commission;
• WCRI’s timely and indisputable research showing just how much employers were paying to line the pockets of dispensers, repackagers, and their owners; and
• well-organized support for the regulation led by the American Insurance Association, PCI, CNA Insurance, Liberty Mutual, the Hartford, CompPharma, and workers comp PBMs.

Lest we get too complacent, realize this is but one state out of 50. The repackagers and their enablers will continue their efforts in Florida, Hawai’i, Michigan, and everywhere else to keep sucking money out of employers and taxpayers to pay big dividends to private equity firms, buy corporate jets and fancy cars.

For now, congratulations to the good guys.  Then back to work on Monday.

An excellent piece by a couple gentlemen from Liberty Mutual describes the myriad problems with and risks of compounding medications – over and above the disastrous faulty steriods from the New England Compounding Center.

A few highlights:

• “oversight of compound medicines actually is minimal…And as with any industry that has minimal regulation and oversight, there is great potential for fraud and abuse. The lure of possibly significant profits also is helping drive this fraud trend.”
• “these drugs do not use the standard national drug codes (NDC). This lack of a standardized coding allows unscrupulous providers to easily double bill payers for the same medication. Also, the absence of NDC codes generally does not allow for payers or administrators to apply drug utilization edits to incoming compounded bills.”
• “The FDA does not require pharmacies to report adverse events associated with compounded drugs. Based on voluntary reporting, media reports, and other sources, the FDA has become aware of over 200 adverse events involving 71 compounded products since about 1990.”

There’s much more at the link.

Thanks to Sarah Sellers, PharmD, for the tip.