The state comptroller’s new effort to curb the skyrocketing costs of controversial “compounded medicine” prescriptions has prompted a labor-management dispute with state employee unions that is headed for binding arbitration on Sept. 23.
Taxpayer costs for the mixtures of drugs — typically in the form of a topical cream that’s rubbed into the skin — have exploded from $800,000 in 2012 to an estimated $24 million this year.
Comptroller Kevin Lembo, who runs the health benefits plan for state employees, retirees and their families, on May 15 imposed a “prior authorization” requirement for prescriptions for “compounded medicines” that in recent years have cost Connecticut taxpayers as much as $18,000 per patient for a 30-day supply.
But now the State Employees Bargaining Agent Coalition, or SEBAC, has notified the state’s labor relations agency that it is challenging the new policy and has requested binding arbitration under the state collective bargaining agreement.
SEBAC’s chief negotiator, Dan Livingston, has said Lembo’s new screening plan creates “too much interference in medical choices between a doctor and patient” — and, in an interview Friday, he said that the unions’ grievance will be heard on Sept. 23 by a neutral arbitrator, Roberta Golick, if SEBAC and state officials can’t resolve their differences by then.
Livingston said that although SEBAC is continuing the 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.
“I can’t tell you if it is promising or not promising. People are talking in good faith,” he said.
Although he said the unions disagree with Lembo’s rules, “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 added: “We also want to make sure that legitimate efforts to help people are not interfered with by this policy.”
The state’s new labor relations chief, who is aligned with Lembo on the issue, declined to comment Friday on details of discussions with SEBAC over the new prior-authorization rules.
“I don’t want to have a full discussion of the parties’ positions” because approval of compound drugs is still a subject of collective bargaining talks, said Lisa Grasso Egan, undersecretary for labor relations at the state Office of Policy and Management. “The arbitration process is available if the parties cannot resolve their differences.”
Compounded medicines are mixtures of drugs that often are produced by large-scale out-of-state “compounding pharmacies” that mark up the prices of ingredients drastically.
Although the 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 (such as rubbing them on the skin to relieve pain instead of taking them orally).
Under Lembo’s new 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.
Livingston said one thing unions want to avoid could be a situation where a patient is denied a prescription for a compounded medicine, and instead is prescribed a pill containing a narcotic pain-killer that might lead to addiction. The excessive cost of some of these medicines shouldn’t disqualify all of them, he said.
Lembo’s policy hasn’t been in effect long enough to reach any conclusions about whether patients are being hurt, Livingston said.
Lembo declined comment Friday. But in recent months he has asked the office of state Attorney General George Jepsen to investigate the compounded drug costs with an eye toward whether state laws or regulations have been broken.
“It’s clearly a gaming of the system” at a minimum, Lembo said last month, adding that he would “reserve comment on whether it’s a violation” until Jepsen’s investigation is complete.
Last month Government Watch obtained documents via a Freedom of Information Act request showing details and costs associated with compounded medicine prescriptions for the period from October 2013 to September 2014. The documents showed that during 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 had no comment.
Jon Lender is a reporter on The Courant’s investigative desk, with a focus on government and politics. Contact him at jlender@courant.com, 860-241-6524, or c/o The Hartford Courant, 285 Broad St., Hartford, CT 06115 and find him on Twitter@jonlender.
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