Major Insurer Stops Coverage for Compounded Drugs

Major Insurer Stops Coverage for Compounded Drugs

June 14th, 2013 // 1:38 pm @

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We now have some new fall out from the scandal involving compounding pharmacies. Harvard Pilgrim Health Care, one of the biggest insurance companies in New England, is not going to cover specialty compounded medications because of cost and safety concerns, according to the Boston Globe this week. You will not be surprised to learn that the move has upset both pharmacists and advocates for patients.

This decision comes on the heels of a serious fungal meningitis outbreak in the US, which had 750 cases and 58 deaths. Some have called it the worst health care crisis in the US in at least 30 years. This outbreak caused there to be more efforts from FDA and state agencies to boost oversight of compounding pharmacies. Congress also is considering adding more oversight and giving FDA more authority in this area.

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Harvard Pilgrim sent a letter to members this week and said that it will stop coverage in August. It will consider appeals on a case by case basis. Doctors will have to send information about the drug, including its ingredients and other prescription drugs that the have been used to attempt to treat the patient’s condition.

The insurer came to this decision after a safety review that was started after the outbreak of spinal meningitis. It was eventually trace to the new England Compounding Center. It found that most of the insurance claims for the drugs were for medications that shouldn’t have been covered in the first place. Some of these included cosmetics, aging and weight loss treatment drugs, as well as homeopathic medications.

The chief medical officer at the insurer, Michael Sherman, said that the company is not trying to deny care. It is trying to cut costs that do not add value for customers. The company did say that it will pay for compounded drugs for those under 18, because their usage is medically necessary for young people. Sometimes they need drugs in different dosages, or a liquefied form is not currently on the market.

During the last 180 days, Harvard Pilgrim stated that 4200 of members older than 18 had prescriptions for compounded medications. In the last year, it saw an increase of 170% in compounded drug claims, which was a three fold hike in costs.

We are not sure how many other insurers are going to make the same decision, but the outbreak of meningitis is encouraging other payers to look at their coverage.

Some say the move by Harvard Pilgrim is disingenuous at best. If there are safety problems, why is coverage continuing for children? One organization, Massachusetts Independent Pharmacists Assn, stated this week that children are treated with a compounded drug until 18, and then when they are 18, they are denied coverage. It doesn’t make a lot of sense, a spokesman told the Globe.

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