Sue,
Yes. The compounded pain creams may be useful for patients (or not), and are EXTREMELY LUCRATIVE FOR COMPOUNDING PHARMACIES and the sales reps they employ to get prescriptions from doctors all around the country (not just locally). Sometimes they are also lucrative to the prescribing physician through illegal kickbacks and split-fee relationships (e.g. Florida Board of Medicine v. David R. Balding, M.D. DOH 93-02958 - where the doctor was getting a 25% kickback on all compounded ketoprofen creme prescriptions - ALL IN CASH, as to not have a paper trail - http://ww2.doh.state.fl.us/FinalOrderNet/folistbrowse.aspx?LicId=42705&ProCde=1501&discpln=DISCPLN)
The way the SCAM part of this works is that:
- Active Pharmaceutical Ingredient (API) suppliers "artificially inflate" the "Average Wholesale Price (AWP) of the raw material drugs used in these creams by 1,000%, but will sell the API's to compounding pharmacies for a tenth of the AWP.
- Compounding Pharmacies bill insurance at the AWP (often $2,000 - $3,000 for a month's supply of transdermal cream), but get reimbursed by the insurance company at about 80% of billed charges. The insurance company may think they "negotiated a good deal", but in reality, they got scammed.
- The compounding pharmacy makes so much profit ($1,000 - $1,500 per prescription per month) that they can afford to pay outrageous commissions tomtheir sales reps (and sometimes, kickbacks to the prescriber).
Kenneth N. Woliner, M.D.
www.holisticfamilymed.com
Yes. The compounded pain creams may be useful for patients (or not), and are EXTREMELY LUCRATIVE FOR COMPOUNDING PHARMACIES and the sales reps they employ to get prescriptions from doctors all around the country (not just locally). Sometimes they are also lucrative to the prescribing physician through illegal kickbacks and split-fee relationships (e.g. Florida Board of Medicine v. David R. Balding, M.D. DOH 93-02958 - where the doctor was getting a 25% kickback on all compounded ketoprofen creme prescriptions - ALL IN CASH, as to not have a paper trail - http://ww2.doh.state.fl.us/FinalOrderNet/folistbrowse.aspx?LicId=42705&ProCde=1501&discpln=DISCPLN)
The way the SCAM part of this works is that:
- Active Pharmaceutical Ingredient (API) suppliers "artificially inflate" the "Average Wholesale Price (AWP) of the raw material drugs used in these creams by 1,000%, but will sell the API's to compounding pharmacies for a tenth of the AWP.
- Compounding Pharmacies bill insurance at the AWP (often $2,000 - $3,000 for a month's supply of transdermal cream), but get reimbursed by the insurance company at about 80% of billed charges. The insurance company may think they "negotiated a good deal", but in reality, they got scammed.
- The compounding pharmacy makes so much profit ($1,000 - $1,500 per prescription per month) that they can afford to pay outrageous commissions tomtheir sales reps (and sometimes, kickbacks to the prescriber).
Kenneth N. Woliner, M.D.
www.holisticfamilymed.com
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