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Time to ReThink RePackaging Drugs

by admin on July 17, 2013 No comments

By: David Hirshfeld

Winston Churchill once commented that “Anyone can rat, but it takes a certain amount of ingenuity to re-rat.”  Well, this sentiment evidently applies to the re-packaging and re-labeling of prescription drugs here in Florida; and the legislature seems to have caught up with the ingenuity.

For years, workers’ compensation insurers have been complaining about the perceived increased cost of repackaged and relabeled drugs.  With CS/SB 662 Florida’s legislature seems to have answered the payors’ cries, and closed a loop-hole in workers’ compensation reimbursement with respect to repackaged and relabeled drugs.

The ingenious “re-ratting” comes about because Florida Statute 440.13(12)(c) dictates what workers’ compensation payors must pay for prescription drugs, and that statute recites a formula based on a drug’s Average Wholesale Price (“AWP”).  Many physicians have taken advantage of Florida Statute 465.0276 so that they can dispense medicines to their patients.  Some “dispensing practitioners” purchase medicines in bulk from manufacturers or wholesalers, and repackage the medicines into smaller containers that are more suitable for dispensing to individual patients.  Every medicine has been assigned a National Drug Code (“NDC”) and an AWP by the time it  leaves the manufacturer.  When a medicine is repackaged and relabeled, a new NDC and AWP are created for that medicine.  The new AWP for the smaller quantity is higher than the AWP for the medicines in bulk, so the amount paid by the workers’ compensation is proportionately higher.

Whether and to what extent repackaging and relabeling are costing the workers’ compensation system more money has been the subject of debate…up until now.  Effective July 1, 2013, Florida Statute 440.13(12)(c) has been modified by CS/SB 662 so that the statute now sets the reimbursement for repackaged and relabeled drugs dispensed by practitioners by a formula based on the AWP set by the original manufacturer of the drug.

As an additional measure to help discourage practitioners from efficiently dispensing repackaged and relabeled medicines to their workers’ compensation patients, the revised law also requires dispensing practitioners to pay supplying manufacturers, wholesalers, distributors or drug repackagers for the medicines within sixty days of the dispensing practitioner taking possession of the medicine.

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