Have you received an e-mail or phone call from a sales person promising significant profits if you buy their compounding “kit”? Perhaps it’s been a message on your LinkedIn or Facebook account.
In May and June, First DataBank (FDB) announced that because of “unanswered questions regarding the legal marketability of "compounding kit" drugs” they would be removed from the MedKnowledge database effective June 8, 2015. In that announcement, FDB went on to state: “Despite their intended use as finished products, we are aware of no regulatory review process that demonstrates their safety and efficacy. Additionally their self-characterization as bulk ingredients to be used by compounding pharmacies is questionable, since bulk pharmaceutical ingredients are not intended for use by an individual patient. Finally, these products lack FDA-approved labeling and adequate supporting information as to indications, warnings, and precautions and side effects.” In other words, the nation’s primary source of NDC and pricing information used by third-party payers has and continues to remove these products from their databases.
As previously reported, IACP Corporate Partner CutisPharma was significantly impacted by this decision as a long-standing supplier of compounding kits for retail and institutional pharmacies. Even after the FDB decision went into effect, IACP members are reporting that sales representatives and companies are aggressively marketing similar kits and claiming that they are fully covered by third-party payors. Some examples of kits that are being promoted include scar treatments, wound care, pain creams, and pain patches.
“Our Reimbursement and Third-Party Committee is looking closely at this issue,” says IACP Vice President Baylor Rice, RPh, FIACP. “We are very concerned that compounders may unknowingly purchase and bill for these kits based upon promotional flyers and statements only to end up with any reimbursements they receive recouped on a third-party audit.” Even if a claim goes through initially based upon an assigned NDC number that subsequently turns out to be inaccurate, a PBM or payor may allege that the dispensing pharmacy violated the terms of its contract by submitting a “kit” compounded medication that wasn’t supposed to be covered. Many of these companies are not registered with the FDA as suppliers – as Cutis Pharma is – thereby further jeopardizing compliance with requirements within the Drug Quality & Security Act and many state practice acts as well.
Have you received any of these promotions? If so, IACP’s Reimbursement and Third-Party Committee would like to see them. Please send copies to us at email@example.com.