October 31, 2014

Health Care Trends

Pharmaceuticals - Bitter Pills?

Physician-dispensing of prescriptions works well except when it comes to medications prescribed in workers' comp cases.

Amy Keller | 9/11/2012

Automated HealthCare Solutions, a Miramar company that provides software that enables workers’ comp doctors who want to dispense drugs, has spent more than $1 million lobbying against price caps on repackaged drugs over the past several years. The company and its affiliates are also generous GOP contributors, giving more than $3 million to conservative candidates and groups since 2005. Among the recipients: Haridopolos’ Freedom First Committee, which received $200,000 from Green Solar Transportation, a company registered to Automated HealthCare Solutions co-founders Paul Zimmerman and Gerald Glass.

Automated HealthCare disputes the insurance industry’s claims that caps on drug prices for workers’ comp patients will save Florida employers $62 million in workers’ comp costs, saying its calculations show at best a $7-million savings. Tom Panza, a lawyer for Automated HealthCare Solutions, says drug repackagers are “considered manufacturers by the FDA ... and they have to have purity controls and non-cross contamination and there’s a lot of things they have to do technically” that drive up costs.

Capping reimbursements for prepackaged meds, says Panza, would effectively put most doctors out of the dispensing business because they can’t benefit from economies of scale the way retail pharmacies can. “The doctor is never going to be able to get the discounts and rebates that the pharmacies get when you have a Walgreen’s that orders 40,000 pills. The doctor is not going to have 20 pharmacy techs like you have at Walgreen’s, so what you’re going to do is put a roadblock between the doctor and their ability to treat their patient in the best way they know how.”

Martin Dix, a health care attorney with Akerman Senterfitt who focuses on pharmacy law, agrees with Panza that drug dispensing is more costly for a physician than a retail pharmacy because of the repackaging component but says there’s a wide variance among what various repackagers charge for their meds. “You’ve got a little of both — some repackagers who are charging a little bit over AWP, and you have repackagers that are giving the drugs a very large AWP,” says Dix.

Lori Lovgren, NCCI’s state relations executive for Florida, stands by the group’s $62 million figure and says there’s no evidence to support arguments by Panza that injured workers are more likely to take their medications and return to work quicker if a physician dispenses the drugs.

Gary Brown, managing member of the American Association of Dispensing Practitioners, rejects the idea that caps on workers’ comp physicians would somehow put doctors out of the dispensing business.

His firm, he says, works with about 130 physicians who dispense medications in-office, primarily to patients with private health insurance. The private insurers reimburse physician-dispensed drugs at prenegotiated rates set by the insurers’ pharmacy benefits managers. The doctor’s profit margin, he says, ends up being about $7 per prescription — slightly less than what a pharmacy would get but still enough to make it worthwhile.

Brown calls the high markups of prescriptions in workers’ comp cases “price-gouging.”

“I really think the workers’ comp system has been abused, and I think it is a loophole,” he says. “And I think it’s actually given physician dispensing some bad connotations, so quite frankly, I would like to see similar requirements within the workers’ comp system as we have in regular dispensing.”

Tags: Healthcare

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