With 34 deaths and 474 cases of fungal meningitis linked to tainted steroids from a Massachusetts compounding pharmacy, blame has fallen on everyone from the pharmacy to state and federal regulators.
Now a new potential culprit has emerged: Medicare, which reimburses for almost all compounded drugs.
Medicare's reimbursement policy is certainly relevant in the government's role in supporting purchases of compounded drugs, Senator Richard Blumenthal told Reuters, referring to the customized medications meant to be prepared for an individual based on doctor directions.
Medicare is the federal health insurance program for the elderly and disabled. Because it is such a large player in healthcare policy, its coverage decisions have an outsized impact on the market.
As long as a physician has prescribed a compounded drug, Medicare as well as some private insurers cover it even if the Food and Drug Administration has approved a version of the drug from a pharmaceutical manufacturer.
In a letter sent on Monday to U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, the consumer advocacy organization Public Citizen charged that by paying for compounded drugs Medicare created an economic environment that allowed large-scale drug production by compounding pharmacies to flourish.
Medicare played a role in fostering the widespread use of compounded drugs, Dr. Michael Carome, deputy director of Public Citizen's Health Research Group, said.
In reply, an HHS spokesman told Reuters that if the FDA finds that a company is producing compounded drugs in violation of the law, Medicare will not reimburse for drugs produced in that facility. But because the FDA's authority over compounding pharmacies is severely limited, we urge Congress to strengthen FDA's authority to ensure these kinds of outbreaks do not happen again.
In a letter to Medicare on Monday, Senators Debbie Stabenow, Al Franken, Dianne Feinstein and Blumenthal - all Democrats - also raised concerns about how compounded drugs are reimbursed at the state and federal level.
The senators cited a section of Medicare's policy manual which explains how the program can deny payment for compounded drugs. In addition, they asked how Medicare works with the FDA to determine which companies have received violations for mass compounding of drugs.
Medicare pays for compounded medications mostly under what is called Part B, which covers drugs that patients cannot administer themselves, such as spinal injections and intravenous cancer drugs. These medications are vital and often life-sustaining and should be covered