The US Department of Justice is investigating potential health care fraud related to compounded pain relief creams. Preliminary estimates suggest this fraud could exceed half a billion dollars. In addition to overbilling and inappropriate automatic refills, the clinical efficacy of these medications is being questioned, according to a report from the Wall Street Journal.

The focus of this investigation relates to compounded pain relief cream prescriptions for US military veterans. Costs of some of these medications can rise to $10,000 per refill.

In addition to the Department of Justice, investigations are being undertaken by the FBI, the IRS, and the US Postal Inspector. Pharmacies in Mississippi, Alabama, in Florida were raided in January, resulting in seizure of assets, vehicles, boats, and cash.

Compounded creams are not as heavily controlled by federal authorities as oral medications. Compounded creams are not specific medications, but combinations of different medications in differing proportions, rendering evaluation of each prescription very difficult. The International Academy of Compounding Pharmacists has issued a statement indicating that topical creams and gels can provide substantial pain relief for people who cannot take oral medications. This group has also recommended aggressive action against healthcare providers who have broken the law in prescribing or preparing compounded creams.

The problems with compounded creams in the workers’ compensation setting relate to costs and efficacy. There are very few injured workers who have legitimate medical problems that render them unable to take oral medications. Many of the physicians who prescribe compounded medications have no idea of the costs. Moreover, certain pharmacies which market themselves to injured workers and their lawyers have a vested financial interest in providing these very expensive medications.

When an authorized treating provider recommends a compounded cream, all efforts should be made to communicate with this physician and secure a very precise, clear statement regarding medical necessity of these medications in these proportions, and the necessity of these medications to be used via topical application. Most physicians are willing to consider alternative treatments once they are apprised of the costs, especially when relief provided by the compounded prescription is not substantial.