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Sunday, August 17, 2014

Pharmacies Turn Drugs Into Profits, Pitting Insurers vs. Compounders

Today's post was shared by The New York Times and comes from

It may be the biggest thing in diaper rash treatment, a custom-made product to soothe a baby’s bottom at the eye-popping price of $1,600.
This is no Desitin or Balmex, or any other brand found in stores. This cream is blended to order in a pharmacist’s lab.
Does it work better than the common treatments? There is little evidence either way. But the sky-high prices commanded by such compounded medicines are drawing the ire of health insurance companies that must pick up the bill. They say the industry is profiteering at their expense.
Compounded medicines are the Savile Row suits of the pharmacy, made to order when common treatments will not suffice. Pharmacists say it is the doctors who decide what to prescribe. But many pharmacies have standard formulations and some promise six-figure incomes to sales representatives who call on doctors.
Besides the $1,600 ointment to treat diaper rash, there was the $8,500 cream to reduce scarring and the $2,300 salve to relieve pain recently billed to Catamaran, a pharmacy benefits manager. Alarmed that its spending on compounded drugs has quintupled in just two years, Catamaran has begun to review such claims more carefully.

Pharmacy benefit managers owned by UnitedHealth and Blue Cross and Blue Shield plans are also reining in spending on compounded drugs, as are insurers like Harvard Pilgrim and various state workers’ compensation plans.
Express Scripts, the largest pharmacy benefits manager, has said it will stop...
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