Several Democratic senators Nov. 19 announced that they have sent a letter to the Centers for
Medicare & Medicaid Services requesting information about how compounded
medications are regulated and reimbursed in federal health programs.
The letter to acting CMS Administrator Marilyn Tavenner was signed by Sens.
Richard Blumenthal (D-Conn.), Debbie Stabenow (D-Mich.), Al Franken (D-Minn.),
and Dianne Feinstein (D-Calif.). Specifically, the senators requested
information about how payment denial is coordinated between CMS and the Food and
Drug Administration for compounding pharmacies found to be in violation of the
Federal Food, Drug, and Cosmetic Act.
Traditionally, compounded drugs are medications that are custom-made for a
patient with a prescription. The large-scale production of drugs by compounding
pharmacies, and associated safety problems, has drawn the attention of lawmakers
due to the recent deadly outbreak of fungal meningitis caused by contaminated
“The recent outbreak of this dangerous disease indicates a need for more
information about how drug compounding practices are regulated and reimbursed at
the state and Federal level,” the senators said.
Specifically, the senators asked for information on the following questions:
coordination does CMS have with FDA to determine which companies have received
citations for violations linked to large-scale compounding of drugs, and how is
this information given to regional offices and carriers?
often has CMS stopped payment of compounded drugs in the Medicare and Medicaid
often have Medicare regional offices and carriers reported potential violations
of compounding? How is this information shared with FDA, and across federal
Medicare Part D, does CMS review prescription drug adverse event data to track
use of compounded drugs?
the Medicaid program, what guidance has been given to state Medicaid directors
regarding the use of compounded drugs?
“We appreciate any information that you can provide on this issue, and any
activities that CMS has taken with respect to compounded drugs,” the senators
said. “We look forward to working with you to better assure the safety and
quality of health care delivery across our nation.” The senators' letter is
dated Nov. 15.
Consumer group Public Citizen Nov. 19 also sent a letter to Health and Human
Services Secretary Kathleen Sebelius, requesting an investigation into whether
Medicare reimbursement policies help fuel large-scale drug compounding.
Public Citizen said the HHS Office of Inspector General should investigate
whether financial incentives created by CMS's drug compounding reimbursement
policies, combined with inadequate action by FDA, fostered the recent fungal
meningitis outbreak from tainted compounded drugs.
The letter said that CMS, through its inconsistent Medicare drug
reimbursement policies concerning compounded drugs and decisions allowing
routine coverage for such medication, appears to have created inadvertent
financial incentives that helped large-scale production of compounding
pharmacies to flourish.
Like FDA, CMS has authority that, if appropriately used, could greatly
restrict, or even eliminate, the widespread, large-scale production and
distribution of standardized drugs by compounding pharmacies, a practice that
falls outside the intended scope of traditional compounding and violates FDA
drug manufacturing regulations, Public Citizen said. In fact, CMS has exercised
this authority in the past.
In 2007, all four regional durable medical equipment Medicare Administrative
Contractors, covering the entire country and acting on behalf of CMS, issued a
denial of coverage for compounded inhalation drugs administered through a
nebulizer, Public Citizen said. In statements following those denials, the local
Medicare carriers noted that while “compounded drugs may be made starting with a
medication approved by the FDA, the final product is not approved for safety and
efficacy by the FDA and is not manufactured to strict federal standards.” The
statements noted that the absence of safety testing can put patients at
increased risk of injury or death, Public Citizen said.
“By failing to use this same authority to deny coverage for many other
compounded drugs since then, CMS essentially has encouraged pharmacies to
produce such medications at dangerously large scales,” Michael Carome, deputy
director of Public Citizen's Health Research Group, said. “An independent
investigation is necessary to determine exactly how these policies contributed
to the current meningitis outbreak and to prevent a similar tragedy from
happening in the future.”
Public Citizen requested that the investigation address the following areas
guidance documents on compounded drugs are ambiguous and conflicting, stating
first that all compounded medications manufactured in violation of FFDCA are
excluded from coverage, but then, in seeming opposition to this, instructing
Medicare carriers to continue reimbursing for compounded medications unless FDA
and CMS take specific actions to notify carriers to deny reimbursement.
appears to have no mechanism to implement this ambiguous guidance, as CMS has
stated that it has “no regular form of coordination with FDA” to allow CMS to
identify when the FDA has determined that particular compounded drugs have been
produced in violation of the law and to notify carriers to deny coverage.
has failed to extend its well-reasoned and justified basis for denying coverage
for compounded inhalation drugs in 2007 to other compounded drugs being produced
and distributed on a large scale by many compounding pharmacies.
least one CMS local carrier, covering Iowa, Kansas, Missouri, and Nebraska,
previously has stated that it will cover certain high-risk compounded drugs for
administration into the area around the spinal cord via an implantable pump
under some circumstances.
The letters seeking more information follow recent congressional hearings on
the meningitis outbreak tied to compounded drugs. Members of the Senate Health,
Education, Labor, and Pensions (HELP) Committee said during a Nov. 15 hearing
that they intend to pursue legislation to ensure the safety of compounding
pharmacies (221 HCDR, 11/16/12). In addition, a group of House Democrats has
asked for a Government Accountability Office review of whether the use of group
purchasing organizations is causing drug shortages that lead to increased use of
Also on Nov. 19, House Energy and Commerce Committee Republican leaders
announced that they asked
FDA to provide internal documents related to the deadly meningitis outbreak by
Nov. 30. In a statement, the panel noted that while testifying before the
Oversight and Investigations Subcommittee on Nov. 14, FDA Commissioner Margaret
Hamburg repeatedly assured members her agency would provide the documents,
“which were originally requested one month ago, in a timely manner.”
By Bronwyn Mixter
The senators' letter is at http://op.bna.com/hl.nsf/r?Open=bdmr-927rru.
Public Citizen's letter is at http://www.citizen.org/documents/2084.pdf.
To view additional stories from Health Care Daily Report™ register for a free trial now