Pharmacists see patients struggle as insurers limit coverage for compounded drugs
http://www.masslive.com/politics/index.ssf/2015/10/patients_struggle_as_insurers.html
A fungal meningitis outbreak blamed on unsafe conditions at a Massachusetts compounding pharmacy killed dozens of people and sickened hundreds, U.S. officials said at the time. Compounding pharmacies elsewhere in the country produced pain creams costing thousands of dollars that had little therapeutic benefits.
But amid crackdowns and new laws aimed at protecting consumers, there has been another side effect of these cases affecting patients nationally and in Massachusetts. Over the last couple of years, compounding pharmacists say patients with legitimate medical needs have had a harder time getting insurance coverage for compounded drugs – medicines specially made by a pharmacy that are not available commercially. That means they must pay out of pocket or find a different medication. Although several Massachusetts insurers said they still cover medically necessary drugs, many have put new restrictions on coverage.
“We totally support eliminating coverage for those high priced pain creams, but I think the needle has swung too much in the other direction, and legitimate needs are not being covered,” said Todd Brown, executive director of the Massachusetts Independent Pharmacists Association.
Doctors prescribe compounded medications for many reasons. A patient may need a dosage that is higher or lower than usual, or a formulation such as a liquid instead of a pill. Sometimes a patient is allergic to an ingredient in commercially made drugs. Compounded drugs are used for pain medication, hormone replacement therapy, in dermatology, pediatrics and other fields.
Harvard Pilgrim was the first major Massachusetts insurer to limit its coverage of compounded drugs for adults in 2013, after the fungal meningitis outbreak, by requiring preauthorization. A spokesman for Harvard Pilgrim said it still covers medically necessary drugs, although not cosmetic or dietary drugs.
As of Jan. 1, 2015, Blue Cross Blue Shield, Massachusetts’ largest insurer, eliminated coverage for any compounds made using bulk chemicals, which are expensive, and for any compounded drugs containing ingredients that are not approved by the U.S. Food and Drug Administration for a specific purpose. For example, an ingredient approved for oral use would not be covered when made into a topical cream.
“There’s no science to support using it in that way, and some of those same compounds were being charged at excessive prices,” said Dr. Tony Dodek, associate chief medical officer at Blue Cross Blue Shield of Massachusetts.
Pharmacists say many of the state’s smaller insurers also placed new restrictions on coverage for compounded drugs.
Eric Linzer, a spokesman for the Massachusetts Association of Health Plans, said none of its members’ plans dropped coverage for compounded drugs, but they are requiring prior authorization and eliminating medications used for non-medical purposes. In some cases, a compounding pharmacy may not be part of a health insurer’s network.
“Plans have seen a proliferation of these drugs being prescribed for non-medical services,” Linzer said. “What plans want is to make sure these are being used safely and effectively and are the most effective treatment option for the patient.”
Yet while insurers say they generally cover medically necessary drugs, pharmacists say the new restrictions are affecting patients.
“Probably in the last six months to a year…every insurer has restricted coverage to some extent,” Brown said.
“For patients, it’s definitely a struggle.” – Pharmacist Andrew Stein
Andrew Stein, managing pharmacist at Bird’s Hill Pharmacy in Needham, a compounding pharmacy, said his customers have often been unable to get insurance coverage. The drugs he makes are used for everything from pediatrics to geriatrics. “There were a few people in the industry that abused the insurance coverage around it, and instead of figuring out a system of how to weed out the bad characters, they eliminated insurance coverage for all,” Stein said.
“For patients, it’s definitely a struggle,” Stein said. “Patients either have to seek an alternative or they have to pay out of pocket.” While some patients appeal, Stein said the process is usually an “arduous” one and often ends in a denial. “It’s like a battle of attrition,” he said.
Ernie Gates, who used to run a compounding pharmacy and is now CEO and president of a Massachusetts health care consulting company that works with compounders, said he has seen a trend nationwide over the last year of insurers dropping or limiting coverage. In addition to the abuses, Gates said part of the problem is the lack of a standard system for monitoring and pricing compounded drugs. Because of factors related to training, testing and manufacturing the drugs, Gates said there is no simple way to price a prescription.
“Everybody is trying to figure out a way to pay for a compounded prescription,” Gates said. “Most (insurers) have made a considered effort not to pay until they get this resolved in their own infrastructure.”
Although insurers covered compounded drugs for years, Gates said with rising health care costs and a trend toward greater use of compounded drugs, the drugs have gotten caught in insurers’ attempts to control costs.
The problem is national. David Miller, executive vice president of the International Academy of Compounding Pharmacists, said coverage for compounded drugs is “all over the board.” “There are drastically different coverage policies related to compounded drugs depending on what your insurance coverage is,” Miller said.
Miller said the military insurer Tricare and the benefits management company Express Scripts both recently significantly reduced coverage for compounded medications.
Miller agreed with Gates that a major factor is pricing. In 2012, the pharmacy industry moved to a system in which pharmacists must tell insurers every ingredient in a compounded drug and its price, rather than only the main ingredient.
“Many of the payers started seeing a significant increase in what they were paying to compounded pharmacists, not because the price went up, but because the way we billed it changed,” Miller said. “Over the last year, we’ve seen more third parties say we don’t want to fix the system, we’ll just stop paying for it.”
Sometimes insurers cite the fact that compounded drugs are not approved by the U.S. Food and Drug Administration. (The FDA does not approve the final drugs, and it may not have approved the use of certain ingredients in a particular form.) But Gates said it should be up to doctors to write a prescription that uses the drugs however they feel necessary.
Miller and Gates added that some prescription medications currently on the market were not approved by the FDA or were not approved for the purpose they are being used for. For example, types of codeine never got FDA approval. “It’s a double standard,” Miller said.
Amy Whitcomb-Slemmer, executive director of Health Care for All, a Massachusetts health care advocacy group, said her group is “strongly in favor of patients and consumers having access to the compounded drugs that their providers are prescribing for them and their conditions.” Whitcomb Slemmer said she has seen cases “now and again” of consumers not getting reimbursed by insurance.
“This is one of those areas where it’s important to be compliant with what the provider is saying the patient needs,” Whitcomb Slemmer said.
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