Third Question of the Day July 5, 2014 If physician self-referral is constrained under the Stark laws, then shouldn't compounding pharmacist self referral be penalized and restrained?

The true benefits of contemporary compounding may be financial. In a recent Medicare fraud case involving the mass manufacturing of adulterated and misbranded respiratory drugs an underlying reason for compounding was explained by a witness who said “it is cheaper to make a compound solution and sell this medication than to buy an industrial product from an authorized supplier, it is much more expensive, so the profit you are going to obtain with a brand is much less than the one you are going to obtain with compounding. That is the reason for compounding, it is only profit.'' [7] In an article examining the acquisition cost of respiratory drugs which appeared in the homecare trade journal HME News, a compounding supplier noted that “providers, especially small ones, will risk compounding before losing that kind of money'' and further acknowledged that “it's illegal, but profitability often overrules what's legal and illegal.'' [8] The article further notes that compounding would be difficult to detect because of how Medicare is billed “Hence, there's no way for the FDA to know whether a provider is using the premixed drug or compounding the two drugs themselves.'' The financial incentives to compound drugs raise serious concerns regarding conflict of interest for compounding pharmacists who promote their use. If physician self-referral is constrained under the Stark laws, so too should compounding pharmacist self referral be penalized and restrained. In a debate appearing in the Journal of the American Academy of Child and Adolescent Psychiatry, physicians disputed the rationale for compounded hormone treatments for use in adolescent patients and questioned the proprietary interests of compounding pharmacists who promoted their use [9-11].

quoted from Dr. Sarah Sellers' 2003 testimony before Congress