Changes in payor coverage and reimbursement of compound medications have caused many compounders to look to alternative medications as either a supplement to their compound pharmacy practice, or in some cases, a substitute to traditional compound pharmacy medications. To this end, more and more compounder have begun filling and dispensing various topical patches and/or compounding kits as a measure to maintain or bolster their pharmacy operations. However, there are numerous unique legal, regulatory and contractual considerations for pharmacies that are contemplating dispensing these kits and patches. Ultimately, what may seem like a viable alternative to compounding, may not be the right strategy for your compound pharmacy.
Various types of kits and patches have emerged as a substitute for traditional compounding. Kits and patches are attractive to pharmacies because they represent an easy way to prepare accurate and reproducible medications with very little preparation and clean up. In addition, pharmacies are drawn to kits and patches because of the advertised ease of third party reimbursement. There are numerous varieties of kits and patches that are currently available on the market. For example, some kits are marketed toward physicians, who intend to dispense directly to patients, rather than pharmacies dispensing to patients. Alternatively, there are kits available on the market that contain a base and one or more APIs where the contents of the Kit are mixed and billed to an insurer by a pharmacy using a single NDC number.
Similarly, there are multiple types of patches available on the market. Patches are transdermal drug delivery systems, most often allowing active ingredients to be absorbed through the skin to a certain location, and possibly into the bloodstream if that effect is desired. These patches are not compounded preparations, but instead, are commercially manufactured. These products typically have an NDC number registered to them, which is reported to the FDA, as well as to the various pricing databases. Because these products are not compounded medications, they must fall into a different category for FDA approval for manufacturing, marketing and distribution.
Frier Levitt has been closely monitoring the growing market for these kits and patches, as well as compound pharmacies’ interest in dispensing these products. Given the appeal of kits and patches to compound pharmacies, Frier Levitt is offering a flat fee service to provide opinion memoranda on the legal issues and risks associated with dispensing patches and/or compounding kits. The memoranda will analyze applicable FDA issues, State Board of Pharmacy laws and regulations in the pharmacy’s home state, Federal False Claims Act and insurance code issues, and third-party payor/PBM contract issues. Before deciding to undertake dispensing of these kits and patches, your pharmacy is well advised to understand the legal issues and risks of doing so. Contact us today to speak to an attorney.
