DOD RESISTS HILL PUSH TO ROLLBACK COMPOUND DRUG RULES
Thirty-one House members, most of whom, public records show, got campaign dollars from compound drug lobbyists, are pressing the Defense Department to soften rules set in May that block TRICARE coverage of compound medicines when medical efficacy is unproven or prices extreme.
Defense officials say they don’t intend to relax the rules created to protect TRICARE from aggressive marketing and abusive pricing that have polluted the compound drug industry. Indeed, TRICARE has had to tweak the new rules five times since May 1 just to close more loopholes industry seemed ready to exploit, possibly sending drug costs soaring again.
Compound pharmacies combine more than one ingredient to create drugs not available from commercial manufacturers. Medicines in different strengths or forms can be critical for meeting individual patient needs.
In recent years, however, compounding labs have popped up to produce lotions and ointments for pain or scarring that often are marketed deceptively, wildly overpriced and tout benefits not medically proven. The most nefarious marketers began targeting TRICARE two years ago after commercial insurance plans got wise to their tactics and tightened coverage.
TRICARE saw compound drug costs jump from $23 million a year in 2010 to almost $550 million – a month -- by last April. The cost explosion punched a $2 billion hole in the TRICARE budget, forcing DoD this summer to seek permission from Congress to reprogram more than $1 billion from other defense accounts just to sustain health care operations through this month.
Examples of abuse are plentiful and stunning. Last fall, TRICARE beneficiary Renee Turley of Panama City, Fla., got a prescription from her civilian gynecologist for a compound to fade scarring after the birth of her child by Cesarean delivery. Over the next three months a company called Florida Pharmacy Solutions sent her three different creams, no instructions on how to use them, and billed TRICARE $93,878. Alarmed, Turley suspected a billing error until TRICARE officials verified the charges.
“No woman getting a C-section should have been allowed to get this scar cream,” Turley said, blaming TRICARE in part for being slow to curb the abusive practices. “And to make matters worse I never used the cream, because of the ingredients, since I was breastfeeding.”
When retired Coast Guard Cmdr. James A. Granger of Poquoson, Va., had three toes aching from arthritis, his podiatrist prescribed a compound cream, with automatic refills. A week after receiving “240 grams of this miracle goo,” Granger said, the first refill arrived. Like Turley, Granger faced only a $17 co-pay but he saw TRICARE billed more than $3000 per refill.
“I didn't really feel the cream was all that beneficial,” Granger wrote in an email. “And it certainly wasn't worth $6604 for three aching toes...I would love to see this sort of borderline fraud stopped!”
After TRICARE imposed tougher screens to mirror those used by commercial insurance plans, its average cost of a compound drug claim fell from $5500 to $325. Total compound drug costs per month fell to $10 million from $547 million in April. The industry, however, is irked.
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