Tuesday, July 22, 2014

New Compounding Network Seeks to Weed Out ‘Bad Actors’

While PBMs have begun making bold moves to manage the cost of compounded medications through coverage changes and even contract terminations (see story, p. 1), a new limited network has popped up that seeks to preserve these specialized medicines as a covered benefit by excluding the “players that have given the compounding industry a bad name.” United Compounding Network (UCN) is meant to be a closed, limited network that includes the “best 1%” of compounded pharmacies so that payers don’t have to do the legwork involved with credentialing and contracting to avoid waste.
“The mission of the network is to heighten levels of transparency, quality and cost management for compounding through a network that is going to be based on quality and best practices,” asserts Julie Letwat, executive vice president of UCN and a former counsel to pharmaceutical companies. She explains that participating pharmacies will undergo a rigorous process that involves a lengthy application and on-site audit. “We have a whole litany of things that are required to be part of the network,” she explains. The network was launched by Feras Health, LLC, which was founded in 2013 by industry compound leaders to create and invest in companies that provide solutions to the compound pharmaceutical industry.
The invited “charter members” are the pharmacies that already are “dually accredited” by the Pharmacy Compounding Accreditation Board and designated CQI Centers of Excellence. The network automatically excludes pharmacies that are owned by physicians, prepackage products, produce compound kits or make anything in anticipation of use, and it focuses only on pharmacies that “dispense based on individual, valid patient prescriptions.” These are known as 503A pharmacies that are regulated by state boards of pharmacy and do not fall under FDA jurisdiction, she adds.
As far as some of the problematic physician detailing that has partly led to inflationary compound pricing, Letwat says UCN has rules in place around the pharmacies’ marketing materials and sales force. Moreover, UCN’s code of ethics includes “responsible pricing of the products based on value, expertise, the time required and fair market value.”
Letwat says UCN is having initial conversations with plans and PBMs about the potential value of the network and that feedback has been positive so far. “They’re very interested. I think they’re curious as to how many pharmacies are going to meet our criteria and that they’re still going to be able to service their clients, which I don’t see as a problem, quite honestly.”

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