CMS to Cut Payments for Compounded Inhalation Drugs

Washington

CMS plans to cut payments for compounded inhalation drugs in an effort to discourage pharmacies from “inappropriate” compounding.

The agency’s plans were disclosed in late August in a letter from CMS Administrator Mark McClellan to Sen. Charles Grassley, R-Iowa, who had previously expressed concerns about the payment system.

Traditional pharmacy compounding involves preparing drugs that are not commercially available, but many pharmacies are mass-producing copies of brand-name drugs already on the market. According to Grassley, safety and sterility rules are stricter for drugs produced by manufacturers than those made in pharmacies.

Medicare reimburses most drugs, whether they are compounded or purchased from a manufacturer, at the same rates. But the letter said CMS plans to create separate HCPCS codes for compounded drugs and set lower rates for compounded products that are commercially available.

In August, the FDA warned Rotech, CCS Medical and Reliant Pharmacy Services (owned by Lincare Holdings) to stop manufacturing and distributing unapproved compounded inhalation drugs.

Rotech said it disagrees with the FDA’s assessment, but announced its PulmoDose pharmacy would no longer accept new prescriptions for compounded products and would switch its 30,000 patients currently taking them to commercially available drugs where appropriate.