A new paper analyzes issues surrounding the use of controversial compound drugs, medical foods, and co-packs in California's work comp system.

The working paper could prove beneficial for work comp professionals in other states where payers are concerned about a rising use of the products by injured workers.

Compound drugs result from the combining of drug ingredients to meet specific patient needs for medications that are not commercially available. But they are not approved by the Food and Drug Administration, although a pharmacy board regulates them in California.

Medical foods are created for patients with specific nutritional requirements while co- packs combine medical foods and generic drugs.

In California, research has shown their use is increasing and they have become a significant concern for work comp payers. So the new working paper prepared by the Rand Corp. Institute for Civil Justice for the California Commission on Health and Safety and Workers' Compensation is very timely.

The paper suggests clarifying rules for use of the products and “removing inappropriate financial incentives” for entities dispensing them, namely doctors. That would help resolve uncertainties over whether injured workers are receiving medically appropriate products and whether payers are paying a reasonable price for them.

The working paper states that provisions for the products could, for example, require that that they include a least one ingredient in an FDA-approved drug or that they include only active ingredients that are components of FDA approved drugs that have been made in an FDA-registered facility.

There are several other suggestions in the paper available here.

The paper also discusses financial incentives for physician-dispensing of compounded drugs and how the incentives can be reduced.

You may have noticed that Comp Time's last posting dealt with a Rand study for CHSWC.

Comp Time is not promoting Rand or CHSWC. It just happened they released two studies of interest close together.

Let me know if you have had experiences with compound drugs, medical foods, or co-packs.