Co-Pay Assistance Programs Fail to Help Uninsured Patients

By Pat Anson, PNN Editor

Co-pay assistance programs – also known as co-pay charities – are ostensibly designed to help needy patients pay for prescription drugs. But a new study by researchers at the Johns Hopkins Bloomberg School of Public Health found that nearly all co-pay programs fail to cover uninsured patients who need financial help the most.

The researchers also found that co-pay programs were more likely to cover high-cost, brand-name prescription drugs, despite the availability of lower-priced generic medications. The findings are published online in JAMA.

“Independent patient assistance programs favor higher-priced drugs, and the higher the drug price, the higher the likelihood of it being covered,” says co-author Gerard Anderson, PhD, professor in the Bloomberg School’s Department of Health Policy and Management. “Unfortunately patients with the greatest financial needs -- people without health insurance -- do not qualify for these programs.”

Anderson and his colleagues looked at the six largest charity organizations, which ran 274 different patient assistance programs in 2018.

bigstock-Medicine--Money-347553.jpg

Most of the programs only covered drugs for cancer-related conditions or genetic and rare diseases. None offered free drugs and typically they only covered the most expensive medications.

“Only covering insured patients may help these programs cover more patients with their limited funds,” said lead author So-Yeon Kang, MPH, a research assistant in the Bloomberg School’s Department of Health Policy and Management. “But leaving out the uninsured diminishes the charitable aspects of these organizations supported by tax-exempted donations.”

Misconduct Widespread

Patient assistance programs run by independent charities are usually funded by pharmaceutical companies. Federal investigations into several co-pay assistance programs led to multimillion-dollar settlements with drug companies for allegedly steering patients to their higher-priced drugs.

Over the past year, Pfizer, Amgen, Jazz Pharmaceuticals, Astellas Pharma, Lundbeck and Alexion have all paid heavy fines to settle allegations that they used co-pay programs to defraud Medicare. Federal anti-kickback laws prohibit pharmaceutical companies from making any kind of payment to induce Medicare patients to purchase their drugs. The prohibition includes co-pays.

“We are committed to ensuring that pharmaceutical companies do not use third-party foundations to pay kickbacks masking the high prices those companies charge for their drugs,”  U.S. Attorney Andrew Lelling said in a statement. “This misconduct is widespread, and enforcement will continue until pharmaceutical companies stop circumventing the anti-kickback laws to artificially bolster high drug prices, all at the expense of American taxpayers.”

Similar allegations were made against Insys Therapeutics and the “Gain Against Pain” co-pay program run by the U.S. Pain Foundation. Insys donated over $3.1 million to U.S. Pain, with most of the money going to its co-pay program to help patients pay for Subsys, an expensive fentanyl spray made by Insys. A four-day supply of Subsys can cost nearly $24,000.

The founder of Insys and four former executives were recently found guilty of racketeering charges unrelated to the co-pay program. The company also agreed to pay $225 million in fines and penalties to settle criminal and civil investigations. U.S. Pain ended the “Gain Against Pain” program in 2018 and said it would no longer accept funding from Insys.

In an editorial, Katherine Kraschel, a lecturer at Yale Law School, and Gregory Curfman, MD, deputy editor of JAMA, called for more oversight of co-pay programs to make sure they help patients who truly need it.

“Although patient assistance programs may provide important financial relief for patients, the current patient assistance program structure largely neglects uninsured individuals,” they wrote.  “Absent other regulatory interventions, the Department of Justice needs to continue to scrutinize patient assistance program practices, and the Internal Revenue Service and state attorneys general should examine the tax-exempt status of patient assistance programs.”

Medicare to Cover Acupuncture in Pilot Program

By Pat Anson, PNN Editor

A week after a federal report documented a significant decline in opioid prescriptions among Medicare beneficiaries, the Centers for Medicare & Medicaid Services (CMS) has taken a tentative step to cover acupuncture as an alternative treatment for chronic low back pain.

Under a CMS proposal, patients enrolled in clinical trials of acupuncture sponsored by the National Institutes of Health (NIH) or in studies approved by CMS would be covered under Medicare’s Part D program. CMS has been collaborating with the NIH in studying acupuncture as a treatment of chronic low back pain in adults 65 years of age and older.

In a statement, CMS acknowledged that while “questions remain” about acupuncture’s effectiveness, interest in the therapy had grown in recent years as a non-drug alternative to opioids.  

Acupuncture is an ancient Chinese form of treatment that involves the insertion of fine needles into various points on the body to alleviate pain and other symptoms.

bigstock-acupuncture-chinese-medicine-treatment--c-25612319.jpg

“Chronic low back pain impacts many Medicare patients and is a leading reason for opioid prescribing,” said CMS Principal Deputy Administrator of Operations and Policy Kimberly Brandt. “Today’s proposed decision would provide Medicare patients who suffer from chronic low back pain with access to a nonpharmacologic treatment option and could help reduce reliance on prescription opioids.”

Currently, acupuncture is not covered by Medicare. CMS is inviting public comment on the proposal to gather evidence and help determine if acupuncture is appropriate for low back pain. Comments will be accepted through August 14.

“Defeating our country’s epidemic of opioid addiction requires identifying all possible ways to treat the very real problem of chronic pain, and this proposal would provide patients with new options while expanding our scientific understanding of alternative approaches to pain.” said Health and Human Services Secretary Alex Azar.

Spending on Opioids Peaked in 2015

Medicare Part D spending on opioid prescriptions has been falling for years. It peaked in 2015 at $4.2 billion and now stands at its lowest level since 2012, according to a report released last week by the HHS Office of Inspector General.

The decline in opioid prescriptions appears to be accelerating. Last year, 13.4 million Medicare beneficiaries received an opioid prescription, down from 14.1 million in 2017.

SOURCE: HHS OFFICE OF INSPECTOR GENERAL

SOURCE: HHS OFFICE OF INSPECTOR GENERAL

The Inspector General identified over 350,000 Medicare patients as receiving high amounts of opioids, with an average daily dose great than 120 MME (morphine milligram equivalent) for at least three months. The CDC opioid guideline recommends that daily doses not exceed 90 MME.  

The report highlighted the case of an unnamed Pennsylvania woman who received 10,728 oxycodone tablets and 570 fentanyl patches in 2018. Her average daily dose was 2,900 MME. She received all of her opioid prescriptions from a single physician.

The report said there were 198 prescribers who “warrant further scrutiny” because they ordered high doses of opioids for multiple patients.

“Although these opioids may be necessary for some patients, prescribing to an unusually high number of beneficiaries at serious risk raises concerns. It may indicate that beneficiaries are receiving poorly coordinated care and could be in danger of overdose or dependence,” the report found.  “Prescribing to an unusually high number of beneficiaries at serious risk could also indicate that the prescriber is ordering medically unnecessary drugs, which could be diverted for resale or recreational use.”

Under a new federal law, CMS is required to identify and warn “outlier prescribers of opioids” on an annual basis about their prescribing patterns. Medicare insurers could also require high-risk patients to use selected pharmacies or prescribers for their opioid prescriptions.

Drug Maker Payments May Influence Gabapentinoid Prescribing

By Pat Anson, PNN Editor

There is growing attention being paid to doctors who accept money from pharmaceutical companies. A recent study, for example, found that doctors who receive direct payments from opioid manufacturers tend to prescribe more opioid medication than doctors who receive no such payments.

But another new study shows the same is true for doctors who prescribe an expensive class of non-opioid drugs that are widely used “off label” to treat chronic pain.

Researchers at Yale University and the University of Connecticut looked at Medicare Part D prescribing data for gabapentinoids from 2014 to 2016, comparing it with payments made to doctors from gabapentin manufacturers. Over the study period, about 51,000 physicians received $11.5 million from the drug makers, mostly for meals, beverages and gifts.

The researchers found that doctors who received the payments were more likely to prescribe a brand name gabapentinoid such as Lyrica (Pfizer), Gralise (Assertio) or Horizant (Arbor). These brand name drugs cost several hundred dollars for a one-month supply, compared to less than $20 for a one-month supply of a generic version. 

“Among physicians who prescribed gabapentinoids, receipt of payments from industry was associated with a higher likelihood of prescribing brand-name products than generic gabapentin,” researchers reported in JAMA Internal Medicine.

bigstock-Pouring-capsules-from-a-pill-b-46714792.jpg

“Our findings raise concerns about the reasons some physicians prescribe brand-name gabapentinoids and not less-expensive generic alternatives.”

Generic drugs are generally just as effective as brand name drugs, but the differences in cost can be significant. For a Medicare beneficiary in 2016, about $2,500 a year was spent on a brand name gabapentin vs. just $89 for a generic version of the same drug.

“All of these studies have essentially the same finding -- that marketing to physicians is associated with increased sales of a company’s product and increased Medicare expenditures,” Robert Steinbrook, MD, UC San Francisco School of Medicine, wrote in a JAMA editorial.

“Association studies do not establish cause and effect, they do not account for other influences on prescribing, such as direct-to-consumer advertising, and they do not assess the appropriateness of prescriptions for individual patients. Nonetheless, the pattern is indisputable.”

Does your doctor accept industry payments? You can see for yourself on Medicare’s Open Payments database.

In addition to the costs involved, there is growing awareness that gabapentinoids are over-prescribed and not as effective for some chronic pain conditions.

The drugs were originally developed to prevent epileptic seizures, but their use has tripled over the past 15 years as more doctors prescribed them off label for a wide variety of pain conditions.

Our findings raise concerns about the reasons some physicians prescribe brand-name gabapentinoids and not less-expensive generic alternatives.
— JAMA Internal Medicine study

“Gabapentinoids have become frequent first-line alternatives in patients with chronic pain from whom opioids are being withheld or withdrawn, as well as in patients with acute pain who traditionally received short courses of low-dose opioid,” wrote Christopher Goodman, MD, and Allan Brett, MD, University of South Carolina School of Medicine, in a recent clinical review in JAMA Internal Medicine.

“The evidence to support off-label gabapentinoid use for most painful clinical conditions is limited. For some conditions, no well-performed controlled trials exist.”

Goodman and Brett said the 2016 CDC opioid guideline reinforces “an inflated view of gabapentinoid effectiveness” by asserting they are “first-line drugs” for neuropathic pain. Many patients who take gabapetinoids have side-effects such as dizziness or drowsiness, and there are increasing reports that the drugs are being abused and sold on the street.   

Pain Clinics Ordered Unnecessary Urine Drug Tests

By Fred Schulte, Kaiser Health News

A Tennessee-based chain of pain clinics that abruptly shut down last summer faces five whistleblower lawsuits accusing it of defrauding Medicare and other health insurers by billing for hundreds of unnecessary urine drug tests and other dubious health services, newly unsealed court records show.

The federal suits target Tennessee-based Comprehensive Pain Specialists, also known as Anesthesia Services Associates, PLLC, and several of its physician owners. At its peak, CPS ran 60 pain clinics in 12 states, according to the suits, as well as a lucrative urine-testing lab in Brentwood, Tenn. CPS closed with no warning in July, leaving patients in several states distressed and scrambling to find a new source of narcotic pain medicines.

In federal court filings unsealed in Nashville this week, federal prosecutors said they would take over the urine-testing allegations and sue several CPS owners, including co-founding anesthesiologists Peter Kroll and Steven Dickerson. Dickerson is a Republican state senator representing Nashville.

Kroll could not be reached for comment Wednesday. Dickerson did not respond to an email or a phone message left at his legislative office.

bigstock-Concerned-Doctor-With-Sample-5032694.jpg

It is not clear whether the whistleblowers, who include former CPS doctors and other employees, would pursue several allegations against the company that the federal government declined to join in. CPS, in an unrelated court filing in December, said the company had terminated all of its employees and that debts “greatly exceed its assets.”

Once among the largest pain management groups in the Southeast, CPS crumbled amid financial woes that included nearly a dozen civil suits alleging unpaid debts, and a criminal investigation that ensnared its former chief executive, John Davis. Davis, 41, was convicted this month in federal court in Nashville on health care fraud charges. He is to be sentenced later this year.

CPS was the subject of a November 2017 investigation by Kaiser Health News that scrutinized its Medicare billings for urine drug tests. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers. One nurse practitioner working at a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billings that year, according to Medicare records analyzed by KHN.

Kroll, who also served as CPS’ medical director, said at the time that the tests were justified for patient safety and to reduce chances the pills might be sold on the black market. Kroll billed Medicare $1.8 million for urine tests in 2015, the KHN analysis of Medicare billing records found.

Kroll in an interview with KHN at the time said that he and fellow anesthesiologist Dickerson came up with the idea for the pain clinics over a cup of coffee at a Nashville Starbucks in 2005.

One of the whistleblower suits alleging unnecessary urine tests was first filed under seal in 2016 by Suzanne Alt, a doctor who worked in the company’s pain clinics in Troy, Mo., and Keokuk, Iowa, from May 2014 to March 2015. She alleged CPS doctors were “strongly encouraged to order full-panel urine drug screens on each patient, every time, despite the patient’s history, compliance and risk.”

She also said that the company’s electronic medical records “made it extremely difficult to order anything less than the full panel.” Alt said she was told the Tennessee lab did about 600 of these screens daily. Another whistleblower said he toured the lab with CPS executives and observed an “overpowering and unpleasant smell of urine.” In response, a CPS executive said, “To me, it smells like money,” according to the suit.

“They were making a killing,” said Birmingham, Ala., attorney Don McKenna, who represents Alt in the case.

Another of the whistleblowers, former CPS anesthesiologist Cynthia Niendorff, alleged that the company billed Medicare about $754 for each additional urine test, even though earlier results had come back negative. She said CPS grossed approximately $6 million per month from the urine-testing lab and said about 20% of this amount was suspect, according to the suit.

Mary Butner, a former insurance specialist for CPS in Gallatin, Tenn., alleged that CPS charged some patients $1,500 for a drug test to measure blood levels of medication and $400 for a drug test designed to detect illegal drugs — charges that the suit called “grossly inflated and disproportional to the actual costs.” She also alleged that CPS would fill prescriptions for patients whose drug tests detected the presence of illegal drugs, or showed that they were not taking their medication as directed.

Butner also accused medical director Kroll of approving prescriptions for back braces when it was “clearly medically unnecessary,” including some people who had injuries to a knee or elbow.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Medicare Patients Face New Rx Opioid Rules in 2019

By Pat Anson, PNN Editor

The Centers for Medicare and Medicaid Services (CMS) will implement new safety rules on January 1 that could make it harder for over a million Medicare beneficiaries to get prescriptions filled for high doses of opioid pain medication. Prescriptions for opioid “naïve” patients – those who are new to opioids -- will also be limited to an initial 7-day supply, regardless of dose.

The new rules, which are modeled after the 2016 CDC opioid guideline, are intended to reduce the risk of opioid abuse and addiction. They only apply to patients enrolled in Medicare’s Advantage and Part D prescription drug programs, and exempt patients in palliative and hospice care or those being treated for “active” cancer-related pain.

But patients and advocates fear the rules give too much power to insurers and pharmacies, and could result in widespread confusion or patients being denied medications they’ve taken safely for years.

“I am concerned, just as happened with the CDC Guideline, the new CMS rules starting January 1 will be totally misinterpreted, misunderstood, and possibly weaponized to deny patients opioid pain meds,” says Rick Martin, a retired Las Vegas pharmacist disabled by chronic back pain. 

In recent weeks, Martin says he’s spoken with three pharmacists at major chains in the Las Vegas area and none of them had been briefed about the new CMS rules or how they will be implemented by insurers. 

CMS logo.png

“Maybe the sponsors (insurers) are so overwhelmed, nothing will happen after January 1 or maybe some obscure person in the basement is waiting to install a computer program that will kick in January 1 and nobody will be expecting it. That would be utter chaos,” said Martin. 

CMS contracts with dozens of private insurers to provide health coverage to about 54 million Americans through Medicare and nearly 70 million in Medicaid. CMS policy changes often have a sweeping impact throughout the U.S. healthcare system because so many insurers and patients are involved. 

‘Safety Edit’ for High Dose Prescriptions

Starting January 1, Medicare insurers will adopt drug management programs (DMPs) designed to flag patients who are deemed high risk – such as those who take opioids with anti-anxiety benzodiazepines or get opioid prescriptions from more than one doctor.

Any opioid prescription at or above 90 MME (morphine milligram equivalent) will trigger an automatic “safety edit” requiring pharmacists to talk with the prescribing doctor about the appropriateness of the dose. If satisfied with the explanation or if a prior authorization was already granted, the pharmacist could override the safety edit and fill the prescription. About 1.6 million Medicare beneficiaries met or exceeded a dose of 90 MME in 2016.

Insurance companies can impose their own “hard edit” for patients getting 200 MME or more, which will require pharmacists to contact the insurer before filling a prescription.  Insurers will also be given greater authority to identify patients at high risk of addiction and can even require they use “only selected prescribers or pharmacies.”

The bottom line for patients is that pharmacists and insurers – not doctors -- could be the final arbiters of whether a prescription is appropriate and should be filled.

bigstock-American-pharmacist-with-senio-31746026.jpg

“If you get opioids from multiple doctors or pharmacies, your plan may talk with your doctors to make sure you need these medications and that you’re using them safely,” a Medicare advisory tells patients.

“If your Medicare drug plan decides your use of prescription opioids and benzodiazepines isn’t safe, the plan may limit your coverage of these drugs. For example, under its DMP your plan may require you to get these medications only from certain doctors or pharmacies to better coordinate your health care.”

“The process they decided on -- having pharmacists confer with prescribers -- is really a good idea in the abstract, but in practice it's going to be very burdensome,” says Bob Twillman, PhD, Executive Director of the Academy of Integrative Pain Management. 

“I think that the mandated phone conversations between pharmacists and prescribers will turn out to be such a time-consuming endeavor that many prescribers will decide just to prescribe a low enough dose that those phone calls aren't triggered. The net effect, in many cases, I think, will be to encourage prescribers to drop their doses below that threshold.”

If a prescription is rejected by an insurer or pharmacist, patients have the option of paying for the medication in cash and/or filing an appeal.

“CMS officials have confirmed that Medicare prescription drug coverage involvement is limited to payment for medications. If a patient receives a denial of coverage, the patient has the right to pay out-of-pocket for that medication. A Medicare denial only applies to financial coverage. It has no authority to deny the prescription itself,” says Andrea Anderson, Executive Director of the Alliance for the Treatment of Intractable Pain (ATIP). 

ATIP is encouraging patients denied medication to contact a little-known CMS agency called the Beneficiary and Family Centered Care-Quality Improvement Program, where they can file an appeal or make a complaint.   

Medicare patients can also be proactive by talking with their doctor and pharmacist about the new rules before getting a prescription filled. They can also seek a prior authorization from their insurer to avoid the delays of a safety edit at the pharmacy.

Many Alternative Therapies for Back Pain Not Covered

By Pat Anson, PNN Editor

A new study by the Johns Hopkins Bloomberg School of Public Health has confirmed what many back pain sufferers already know: Public and private health insurance plans often do not cover non-drug alternative pain therapies.

Bloomberg researchers looked at dozens of Medicaid, Medicare and commercial insurance coverage policies for chronic lower back pain and found that while most plans covered physical therapy and chiropractic care, there was little or no coverage for acupuncture, massage or counseling.

"This study reveals an important opportunity for insurers to broaden and standardize their coverage of non-drug pain treatments to encourage their use as safer alternatives to opioids," says senior author Caleb Alexander, MD, a professor of epidemiology at the Bloomberg School.  

Alexander and his colleagues examined 15 Medicaid, 15 Medicare Advantage and 15 major commercial insurer plans that were available in 16 states in 2017.

Most payers covered physical therapy (98%), occupational therapy (96%), and chiropractic care (89%), but coverage was inconsistent for many of the other therapies.

Acupuncture was covered by only five of the 45 insurance plans and only one plan covered therapeutic massage.

bigstock-Physiotherapist-Chiropractor--162344204.jpg

Nine of the Medicaid plans covered steroid injections, but only three covered psychological counseling.

"We were perplexed by the absence of coverage language on psychological interventions," Alexander says. "It's hard to imagine that insurers wouldn't cover that."  

Even for physical therapy, a well-established method for relieving lower back pain, insurance coverage was inconsistent.

"Some plans covered two visits, some six, some 12; some allowed you to refer yourself for treatment, while others required referral by a doctor," Alexander says. "That variation indicates a lack of consensus among insurers regarding what model coverage should be, or a lack of willingness to pay for it.”  

The Bloomberg study is being published online in the journal JAMA Network Open.  It was funded by the U.S. Department of Health and Human Services, National Institutes of Health and the Centers for Disease Control and Prevention.  

Lower back pain is the world’s leading cause of disability, but there is surprisingly little consensus on the best way to treat it. A recent series of reviews by an international team of experts in The Lancet medical journal found that low back pain is usually treated with bad advice, inappropriate tests, risky surgeries and painkillers.

“The majority of cases of low back pain respond to simple physical and psychological therapies that keep people active and enable them to stay at work,” said lead author Rachelle Buchbinder, PhD, a professor at Monash University in Australia. “Often, however, it is more aggressive treatments of dubious benefit that are promoted and reimbursed.”

The authors recommend counseling, exercise and cognitive behavioral therapy as first-line treatments for short-term low back pain, followed by spinal manipulation, massage, acupuncture, meditation and yoga as second line treatments. They found limited evidence to support the use of opioids for low back pain, and epidural steroid injections and acetaminophen (paracetamol) are not recommended at all.

Prescription Pain Creams Flagged for Medicare Fraud

By Julie Appleby, Kaiser Health News

Medicare pays hundreds of millions of dollars each year for prescription creams, gels and lotions made-to-order by pharmacies — mainly as pain treatments. But a new report finds that officials are concerned about possible fraud and patient safety risks from products made at nearly a quarter of the pharmacies that fill the bulk of those prescriptions.

“Although some of this billing may be legitimate, all of these pharmacies warrant further scrutiny,” concludes the report from the Office of the Inspector General for the Department of Health and Human Services.

In total, 547 pharmacies — nearly 23 percent of those that submit most of the bills to Medicare for making these creams — hit one or more of five red-flag markers set by investigators.

Those included what the researchers called “extremely high” prices; large percentages of Medicare members getting identical drugs — 16 of the pharmacies billed for identical drugs for 200 or more customers; “greatly increased” year-over-year billing — 20 pharmacies increased their billing by more than 10,000 percent; or having a single medical provider writing more than 131 prescriptions.

More than half of those pharmacies hit two or more measures — and 10 hit all five.

bigstock-Increasing-Health-Care-Costs-6790984.jpg

One Oregon pharmacy, for example, submitted claims for 91 percent of its customers. A pharmacy in New York submitted 5,342 prescriptions ordered by one podiatrist, while a Florida pharmacy saw its Medicare billing for such treatments go from $7,468 in 2015 to $1.8 million the following year.

Many of the pharmacies are clustered in four cities: Detroit, Houston, Los Angeles and New York.

The report comes amid ongoing concern by Medicare officials about these custom-made — or compounded — drugs. In addition to questions like those raised in the report about overuse and pricing, safety has been a key issue in recent years. A meningitis outbreak in 2012 was linked to a Massachusetts pharmacy that did not maintain sterile conditions and sold tainted made-to-order injections that killed 64 Americans.

When done safely, pharmacy-made compounded drugs provide a legitimate option for patients whose medical needs can’t be met by commercially available products mass-produced by pharmaceutical companies. For example, a patient who can’t swallow a commercially available prescription pill might get a liquid version of a drug.

State boards of pharmacy generally oversee compounding pharmacies, and the drugs they produce are not considered approved by the Food and Drug Administration.

Rising Cost of Compounded Drugs

The new report focuses on concerns with compounded topical medications.

Medicare spending for such treatments has skyrocketed, rising more than 2,350 percent, from $13.2 million in 2010 to $323.5 million in 2016. Price hikes and an increase in the number of prescriptions written drove the increase, the report said.

It is not the first time the inspector general has looked at compounded drugs. A 2016 report found that overall spending on all types of compounded drugs — not just topical medications — rose sharply.

The U.S. Postal Service inspector general and the Department of Defense also have raised concerns about rising spending and possible fraud for compounded drugs.

In response to those previous reports, the International Academy of Compounding Pharmacists, the industry’s trade group, has said that legitimately compounded drugs “can dramatically improve a patient’s quality of life,” noting that proper billing controls need to be in place. The inspector general’s report in 2016, it added, found that “such controls are not in place.”

This report, which the compounding trade group has not yet reviewed, focuses on topical drugs and a subset of the 15,290 pharmacies that provide at least one such prescription each year. It looked at billing records from the 2,388 pharmacies that do at least 10 such prescriptions a year — providing 93 percent of all compounded topical drugs paid for by Medicare.

file000833745487.jpg

Most of the prescriptions were for pain treatment, made from ingredients such as lidocaine, an anesthetic, or diclofenac sodium, an anti-inflammatory drug.

On average, those compounds were more expensive than non-compounded drugs with the same ingredients.

For example, Medicare paid an average of $751 per tube of compounded lidocaine, and $1,506 for the diclofenac, according to the inspector general’s report. Non-compounded tubes of those drugs averaged $445 and $128, respectively.

FDA Commissioner Scott Gottlieb recently outlined new efforts his agency is taking to oversee compounded drugs in the wake of legislation passed by Congress following the meningitis outbreak.

“The FDA is inspecting compounding facilities to assess whether drugs that are essentially copies of FDA-approved drugs are being compounded for patients” who could otherwise take a product sold commercially, he said in a statement issued on June 28.

Gottlieb also said the FDA plans to make more information available to patients and their doctors about compounded topical pain creams, including information about their effectiveness and any potential safety risks.

Not being effective is a safety risk, noted Miriam Anderson, a researcher with the inspector general’s office who helped write the report.

The report urged the Centers for Medicare & Medicaid Services to clarify some of its policies to emphasize that insurers can limit the use of compounded drugs by requiring prior authorization or other steps. The agency concurred with the recommendations, according to the report, including the need to “follow up on pharmacies with questionable Part D billing and the prescribers associated with these pharmacies.”

Anderson said the inspector general’s office is continuing to probe the issue.

“We will investigate a number of leads on specific pharmacies and prescribers who were identified as having these questionable patterns,” she said. “Whenever we see that kind of increase in spending, it raises concern about fraud, waste and abuse.”

Kaiser Health News’ coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.