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Drugs dispensed by docs may well be dangerous

Greg Jones has done a masterful job finding out just who is manufacturing the new “novel” drugs being dispensed by docs to workers’ comp claimants.

In his piece in today’s WorkCompCentral, Jones finds there are just seven companies manufacturing the three novel drugs with unique strengths about which WCRI concluded “it is likely that financial incentives drove some physicians to choose the strength for their patients.” [link leads to abstract, full report available for purchase here]

According to the piece;

Several of the companies [manufacturing the novel drugs] have been fined or warned by the federal government for engaging in unsafe practices, while another paid $12 million to resolve allegations that it paid kickbacks to doctors to prescribe its products. [emphasis added]

We aren’t talking minor misdemeanors, the FDA’s equivalent of parking tickets.  Here’s a quick summary of just a few of these companies’ transgressions.

  • Ranbaxy pleaded guilty to seven felonies and paid fines of $500 million for shipping drugs that weren’t tested for impurities and making fraudulent statements about quality-control tests.
  • Victory Pharma paid $11.4 million to settle criminal and civil allegations re paying kickbacks to prescribing physicians
  • Bryant Ranch was warned by the FDA for failure to put in place systems to prevent contamination during drug manufacturing.  Bryant was also manufacturing at least 10 drugs that were unapproved by the FDA.

There’s much more in Jones’ article, which should be required reading for legislators and regulators dealing with workers’ comp.  

The net is this – putting price controls on doc dispensing doesn’t work; it is blatantly obvious the doc dispensing industry has figured out how to keep generating huge profits despite legislation or regulations in 18 states intended to limit profiteering.

Those profits come from employers and taxpayers, and they come at the risk of sickening or killing claimants.

Thanks to Greg Jones and WorkCompCentral for this – it is wonderful to see that investigative reporting isn’t dead. It is also inspiring to see how real reporters work.

What does this mean for you?

Just say no.  Refuse to pay for doc dispensed drugs.  If providers in your network are dispensing, kick them out.

If your state forces you to pay, use whatever legal methods exist – and every state has them – to delay and deny payment.

Oh, and subscribe to WorkCompCentral, too…


4 thoughts on “Drugs dispensed by docs may well be dangerous”

  1. I am with you Joe! The practice is unsafe is all aspects – zero safety checks, compared with what happens at a pharmacy and made more powerful through PBM prospective management, and now they are pushing meds not approved by the FDA.

    As dangerous as this all is, it is legal in most all states, so I would be very careful suggesting to your readers to just deny these transactions without any underlying authority and support. Feels right to act on principle, but if your support is gumption, gumption won’t win in court. So you’ll pay in the end, plus fines.

    Other than a couple states – I am not aware of any state regs that help. Where else/how can we get the support we need?

    1. Great observation Joe – and thanks for the comment.

      I’d suggest that there is ALWAYS something that can be done. In this case, medical necessity, relatedness, reimbursement, and/or UR provisions may be applicable. No, it won’t be easy, and yes, you may well lose most of the time, but the more difficult you make it, the fewer doc-dispensed drugs your claimants will get.

      In MD, the state regs re usual and customary are being used by many payers to cut reimbursement. In Florida, California, and other employer direction states, aggressive payers are demanding their PPO networks forbid doc dispensing.

      Those crafty adjusters know the ins and outs; how about giving a reward to the ones who come up with the most creative and successful method of stopping doc dispensing?

      1. Thanks Joe –

        Are you aware of any employers and payers in CA who use the MPN regs specifc to PBN (Pharmacy Benefits Network) to deny physician dispensed medications? I hear anecdotally this works well, but would like a high level review of the steps and some more objective proof it works.

        1. Joe – I believe Safeway may be doing this as well as several municipalities. Readers – if you know of others, please leave a comment here.

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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