Legislation in Calif. Senate Targets Cost of Compounded Rx Drugs
Background on Compounded Drugs
Compounded drugs generally are painkiller creams for individuals -- including worker's compensation patients -- who need an alternative to pills. The drugs tend to cost significantly more than similar medications in pill form (California Healthline, 1/31).
The medications are legal, but they are not subject to FDA regulation.
A 2010 study found that use of compounded drugs increased from 2.3% in 2006 to 12% in 2009. Sales of such medications -- which are mixed and dispensed by physicians and some pharmacies -- total at least $100 million annually, experts say.
The legislation aims to better control the costs of compounded prescription drugs by:
- Creating a detailed fee schedule to define reimbursements;
- Prohibiting physicians from referring patients to any place for prescriptions in which the doctor has a financial interest; and
- Requiring compounded drugs to be billed at the ingredient level, which aligns with regulations already adopted by the California Pharmacy Board.
The bill failed a Senate vote late Wednesday, but talks have been underway to reach a compromise before the legislative session ends on Friday night.
Support, Opposition for Bill
Supporters of the bill include the:
- American Insurance Association;
- Association of California Insurance Companies; and
- California Labor Federation.
In a message to lawmakers, the insurers and California Labor Federation said, "Drug compounders have been able to circumvent the existing pharmacy fee schedule, and as a result, pharmacy costs are increasing."
Opponents of the measure include the:
- California Medical Association; and
- California Pharmacists Association.
They argue that the fee schedule included in AB 378 relies on outdated figures that would shortchange those who dispense the medications (Capitol Weekly, 9/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.