Cost increase rocks neb-med providers

Tuesday, November 24, 2009

YARMOUTH, Maine – Neb-med providers who dispense albuterol could be doing so at a loss, thanks to a price increase for the drug that went into effect in October.

Dey Laboratories, the largest maker of albuterol, transferred the manufacturing rights to the drug to its parent company, Mylan Pharmaceuticals in October. Mylan, a large generics manufacturer, then announced a price increase and other manufacturers followed suit.

“I think it was an opportunity for manufacturers to say ‘We’re selling it too cheap, there’s no reason to,’” said Sam Jarczynski, president of St. Petersburg, Fla.-based RxStat. “It will affect us tremendously.”

Providers were paying, on average, around 10 cents per dose for albuterol; now that figure is roughly 15 to 17 cents per dose. Medicare currently reimburses about 12 cents per dose.

“I believe the new pricing is more in line with typical retail pricing,” said Wayne Vega, vice president of sales for Harvard Drug Group.

Under the average sales price (ASP) model, reimbursement for the drug will take six to nine months to catch up. That could cause access issues for beneficiaries if providers decide they can’t afford to dispense albuterol, said Vega.

“What business would provide a drug that would put them in the red?” he said. “It’s the ridiculous ASP model that causes situations like this.”

Provider Dave McDonald will look at ways to cut costs and improve efficiencies in order to keep providing the drug, he said.

“I put out more albuterol than any other drug,” said McDonald, president/owner of Senior Respiratory Solutions in Texarkana, Texas. “It’s not just the COPD population, but also the asthma, bronchitis and emphysema patients that use it.”

The industry has long argued that the ASP model is flawed and will continue to drive providers out of the market.

“If there were any small providers out there before, they’re all gone now,” said McDonald. “We are happy just to be hanging around.”