Monday, January 10, 2011

Coalition wants to put limits on customized drugs

SACRAMENTO, Calif. — An unusual coalition of corporations, insurance companies and labor groups is pushing for legislation that would put restrictions on the customized medicines known as compounded drugs, saying the prescribing of these drugs has become rife with abuse.
Compounded drugs are medications whose ingredients have been tailored to meet a patient's individual needs. Proponents say they improve treatment, but critics say they are typically made with many of the same ingredients found in over-the-counter pills and generic prescription drugs and simply boost profits for doctors and pharmacies.

Proposed legislation by California state Sen. Mark DeSaulnier, former chairman of the Senate Labor Committee, and Assemblyman Jose Solorio, chairman of the Assembly Insurance Committee, would limit prices of medically necessary compounded drugs by adding them to the government's fee schedule.

"This is one we're getting out ahead of early," said Jason Schmelzer, a lobbyist for the California Coalition on Workers' Compensation, which includes Walt Disney Co., Marriott International Inc., Costco Wholesale Corp. and more than 200 other employers in the public and private sectors.

Labor is siding with business on this fight. The bill is needed "to make sure that bottom-feeders and cheaters of the system aren't rewarded," said Angie Wei, a Sacramento advocate for the California Labor Federation.

"When people excessively profit from the system, it oftentimes comes out of the hide of injured workers," Wei said.

Drug billings increase sharply

Critics of the use of compounded drugs point to a sharp rise in the bills submitted to the State Compensation Insurance Fund, California's biggest workers' comp insurer. Billings for compounded drugs reached $28 million, or 24 percent of the fund's total prescription billings, in 2009 — from a number so low the previous year that the state fund didn't bother to track it.

"There's no doubt about it that there are people gaming the system," said John Duncan, director of the California Department of Industrial Relations. "The fine line in this, of course, is to identify where legitimate medicine is being applied and abuse is beginning."

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