A juggling act for providers

Tuesday, July 31, 2007

It's becoming increasingly difficult for nebulizer medication providers to dispense Xopenex, a brand-name version of albuterol, say industry sources. The latest average sales prices make it certain many will discontinue dispensing the drug altogether, they say.
July 1 marked the first quarter of Xopenex and albuterol getting paid under the same code at $1.31 pre-unit dose. The steep drop for Xopenex--down from $3.84--makes it a money loser, providers say.
"We'll most definitely cut back," said Sam Jarczynksi, president of Rx Stat in St. Petersburg, Fla. "We'll have to look at what's in the best interest of the patients as opposed to profitability. We'll probably continue to dispense it for patients who meet certain criteria."
Tom Ryan, CEO of Farmingdale, N.Y.-based Homecare Concepts, said the company planned to switch patients to albuterol.
"If the physician is willing to do that, that's the first step," said Ryan. "Otherwise, we'll refer them to a pharmacy but it most likely will be an over-the-counter retail pharmacy."
Steve Burman, president and owner of Brookhaven, Pa.-based Burman's Medical Supplies, has been inching back into the neb med market, but he says offering them doesn't add to his overhead.
"It's something we can get out of quickly if we have to," he said. "If it's the mainstay of your business, I don't know how you're able to sleep at night."
While the increase in albuterol could provide some relief for current providers and entice others to enter the market, there are different schools of thought on the long-term effect on the market, said Bill Hewlett, president of Murray, Ky.-based Independence Home Pharmacy.
"Going forward, it's hard to visualize this (reimbursement) staying where it is," he said. "My opinion is, a couple of quarters. We're still accepting Xopenex patients at this point and trying to run lean and mean and make it up in efficiencies and volume."
Providers would be wise to base their business model on the $33 dispensing fee, rather than unpredictable drug margins, said Wayne Vega, a consultant with Acadiana, La.-based Stat Vial.
"If you plan on trying to use drugs as your profitability, you will get burned," he said.