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06/08/2013    Allen Jacobs, DPM

Compounding Pharmacies (Marc Katz, DPM)

Dr. Katz's letter expressing his concern over the
present costs of compounded topical
pharmaceuticals is reflective of medicine in
general, and his concerns are not unique to the
compounding industry. How much does Dr. Katz
charge for orthotics? Probably more than he gets
for a digital arthroplasty. How about CAM
walkers? Probably more than he gets for a level-2
office visit. And how many orthotic labs bid for
our business?

The assertion that these pharmacies add
components to drive up the cost is ridiculous.
The pharmacies may only dispense what the
healthcare practitioner prescribes. They may
legally do nothing more or less. Topical
formulations are indeed expensive. So are digital
implants, large external fixation devices,
ultrasound-guided injections, night splints for
plantar fasciitis, and so on. When used under
appropriate circumstances, all advanced
therapeutic interventions offer our patients

Does Dr. Katz use locking plates, screws,
orthobiologics when a K-wire offers an adequate
alternative? How about skin graft substitutes
for relatively superficial ulcerations ? Do the
corporations making these products recover far
more reimbursement that the doctor performing the
ORIF, bunionectomy, or ulcer debridements ? What
about the selling of products in the office that
could be purchased less expensively by the
patient in local pharmacies or on line. Does Dr.
Katz feel that this contributes to the cost of

The "market" will adjust prices for compounded
pharmaceuticals over time. I suggest that the
indicated and ethical application of all newer
technologies should be sufficient to resolve the
concerns Dr. Katz.

Disclosure: I have lectured for TPS and Bellevue
pharmacies on these subjects.

Allen Jacobs, DPM, St. Louis, MO,

Other messages in this thread:

06/10/2013    Troy Espiritu, DPM

Compounding Pharmacies (Marc Katz, DPM)

I must partly agree with Dr. Katz. I recently had
a patient present to me with chemo induced
neuropathy. Another local physician had
prescribed a topical consisting of ketamine,
bupivacaine, clonidine, doxepin, gabapentin,
ketorolac, and pentoxifylline. This particular
patient was rather frustrated because the topical
gave him no relief. This patient also presented
with an EOB which clearly showed his insurance
co. had paid over $400.00 for the single tube
that was smaller than a tube of toothpaste.

After speaking to several reps and compounding
companies, a few things seemed very clear to me.
In my opinion, there is a direct correlation
between the number of compound pharmacies and
reimbursement. They all make it very clear they
will be happy to “work with you” with your
Medicare patients, but they really want your
private pay patients for obvious reasons.

I believe the way these companies are reimbursed
is directly based on how much “stuff” is put into
the compound. From my understanding, the more
that goes in it, the more they get paid. And yes,
as Dr. Allen Jacobs pointed out, “The pharmacies
may only dispense what the healthcare
practitioner prescribes. They may legally do
nothing more or less.” They also make it very
easy to “check a box” to treat numerous
conditions ranging from peripheral neuropathies,
plantar fasciitis, Morton's neuroma, gout, wart
cream, onychomycosis, as well as hallux

As I type this I am looking over
several “Podiatric Formulations” from several of
these companies. One has the following combo to
treat “hallux rigidus/DJD” - diclofenac,
baclofen, bupivacaine, gabapentin, cimetidine,
glucosamine. While another combo recommended
for “onychomycosis” includes acetaminophen as
well as several “other” items.

I would love for someone to share with me how
topical cimetidine, a histamine H2-receptor
antagonist that inhibits stomach acid production,
is going to help my hallux rigidus patient or how
topical acetaminophen will help my patients with
onychomycosis. I actually spoke with one compound
pharmacist who said the acetaminophen will help
soften the nail making the other medications more
effective. Yes, all reps are happy to provide
many anecdotal cases of how it has it has helped
so many people and how “all the ortho guys” are
using it on their knees and hips etc. But I would
love if someone could respond with the following

Do compound pharmacies make more $ if
more “stuff” is in a compound? In other words, is
this part of the reason they want me to prescribe
topical acetaminophen on a fungal nail? From my
understanding they get reimbursed for each
product, regardless of the amount.

Do topicals have to undergo the same FDA approval
process as oral medications? I have been told
that each product in the topical must be FDA
approved, but from my understanding it doesn't
necessarily have to be FDA-approved for the
condition we are treating. For example,
acetaminophen is clearly FDA-approved, but not
for the treatment of a fungal nail. Yet, if it
goes in, they can bill for it. Are there any high
level, evidence-based (multi-center, double
blinded) studies to show the effectiveness of
these products?

In my opinion, these companies are coming out of
the woodwork because they have found a billing
loophole. Once the loophole is closed, they will
likely go away. Also, I found it interesting that
the patient I mentioned responded well to Lyrica,
which his insurance does not want to pay for...
the same company that paid $400 for the cream
that did not work.

Troy Espiritu, DPM, Columbus, GA,
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