State Comptroller Kevin Lembo said Monday that his new effort to curb the skyrocketing costs of controversial “compounded medicine” prescriptions has saved taxpayers about $6 million in the three months since it began.
Lembo, who runs the health benefits plan for state employees, retirees and their families, imposed a “prior authorization” requirement on May 15 for prescriptions for “compounded medicines,” which in recent years have cost Connecticut taxpayers as much as $18,000 per patient for a 30-day supply.
He said the new restrictions are reducing costs for the mixtures of drugs, which typically are sold in the form of a topical cream that’s rubbed into the skin. Taxpayer costs in Connecticut for the controversial mixtures have ballooned from $800,000 in 2012 to an estimated $24 million this year.
“Our approach ensures that patients have access to medically necessary traditional compound medications — while eliminating excessive use of unregulated expensive compound drugs,” Lembo said in a prepared statement.
He broke down the savings by comparing the three months since May 15 to the three months before that and determined they saved an average of $2 million in each month.
In his announcement, Lembo supplied data from the state’s pharmacy benefits manager, CVS/Caremark, on the three months since the curbs took effect:
— Average monthly gross savings on compound drugs: $2.24 million.
— Gross spending on compound prescriptions: dropped from $3.1 million a month in April to $36,229 a month in July.
— Average monthly compound drug prescriptions: dropped from average of 785 a month to 221 a month.
— Average costs charged for prescribed compounds have also dropped.
“This data demonstrates loud and clear that simple steps can have significant benefits — both on the safety and cost of health care,” Lembo said.
Lembo’s implementation of the cost-saving measures has prompted a labor-management dispute with state employee unions.
Under Lembo’s policy, a prescribing doctor must demonstrate “medical necessity” for compounded medications before payment is approved by CVS/Caremark, the state’s health benefit manager. A patient can appeal any denial.
The State Employees Bargaining Agent Coalition has notified the state’s labor relations agency that it is challenging the new “prior authorization” policy and has requested binding arbitration under the state collective bargaining agreement.
SEBAC’s chief negotiator, Dan Livingston, has said that Lembo’s new screening plan creates “too much interference in medical choices between a doctor and patient.” He has said the unions’ grievance will be heard on Sept. 23 by an arbitrator, Roberta Golick, who would issue a binding decision if SEBAC and state officials can’t resolve their differences by then.
Livingston said that although SEBAC is continuing to challenge Lembo’s policy, “we are going to continue to interact” in the next couple of months in hopes of agreeing on a compounded drug policy before the arbitration date arrives.
Although the unions disagree with Lembo’s rules, Livingston has said, “we all agree that some of these prescriptions are being filled by people who want to make a lot of money off people’s suffering. That’s not something we support or want to happen.” But, he said, “We also want to make sure that legitimate efforts to help people are not interfered with by this policy.”
Compounded medicines are mixtures of drugs that often are produced by large-scale, out-of-state “compounding pharmacies” that drastically mark up the prices of ingredients. Although active ingredients in the compounded medicines are approved by the U.S. Food and Drug Administration, the compounded drugs are not tested and approved by the FDA in that particular mixture, or for the way they are administered — for example, rubbing them on the skin instead of taking them orally.
State Attorney General George Jepsen has been investigating compounded drug costs at Lembo’s request, with an eye toward whether state laws or regulations have been broken.
“It’s clearly a gaming of the system” at a minimum, Lembo has said, although he has added that he would “reserve comment on whether it’s a violation” until Jepsen’s investigation is complete.
In recent months, The Courant has obtained documents via a Freedom of Information Act request showing costs associated with compounded medicine prescriptions for the period from October 2013 to September 2014 in Connecticut. The documents contained these findings for those 12 months:
— A total of 8,200 prescriptions for compounded drugs cost Connecticut taxpayers more than $10 million, two-thirds of it paid to pharmacies in Florida, Mississippi, Alabama and Missouri.
— A steroid called fluticasone propionate was the main ingredient in the 230 most expensive compounded-medicine prescriptions, with costs ranging from $9,200 to more than $18,000 for a 30-day supply for a single patient. The prescriptions were “most likely [for] a scar treatment” cream, a Lembo spokeswoman said.
— AssuredRx, of Clearwater, Fla., received $2.2 million through the state health plan for 237 prescriptions, the most among the dozens of compounding pharmacies that filled prescriptions for state employees, retirees and their family members. AssuredRx has declined comment.