Senators Urge CMS to Provide Information about Medicare and Medicaid Reimbursement for Compounded Drugs

In light of the recent national fungal meningitis outbreak traced back to the New England Compounding Center (NECC), Senators Richard Blumenthal (D-Conn.), Debbie Stabenow (D-Mich.), Al Franken (D-Minn.), and Dianne Feinstein (D-Calif.) are asking CMS for information about its procedures with respect to reimbursement for compounded drugs. The senators issued a letter asking CMS how it determines whether drugs are created by compounding pharmacies found to be in violation of the Food, Drug, and Cosmetic Act (FDCA). The senators also sought information about coordination between CMS and the Food and Drug Administration (FDA).

The FDA has historically had limited authority over compounding pharmacies, which were created to prepare special medicines, based on doctors’ prescriptions, for individuals with special medical needs. However, large-scale manufacturing of compounded medicines has increased, and the FDA has come under attack for its failure to prevent the NECC’s manufacture of the contaminated injectable medicine that caused the outbreak. However, Congress and other interested parties are now turning to CMS to see whether it had a role in encouraging compounding and whether it can take measures to discourage the practice.

Public Citizen, a consumer advocacy group, has written a letter to HHS Secretary Kathleen Sebelius, asking her to direct the HHS Office of the Inspector General (OIG) to conduct an investigation into CMS’ policies with respect to reimbursement for compounded drugs. Public Citizen cited conflicting provisions of the Medicare Benefit Policy Manual that, on the one hand, instruct carriers to deny coverage for drugs that have not been approved by the FDA and, on the other hand, direct carriers not to deny coverage for such drugs unless directed to by CMS. Public Citizen also noted that CMS is aware of the dangers posed by compounded drugs. In 2007, its four regional Durable Medical Equipment (DME) Medicare Administrative Contractors (MACs) denied coverage for compounded inhalation drugs administrated via nebulizers, noting that the drugs were not FDA-approved and citing safety concerns. The senators, Public Citizen, and the public await the agencies’ response.