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AB 378 On Governor’s Desk

Governor Jerry Brown is facing an overflowing “in-box” of love-notes from the Legislature, each one hoping to bear his autograph and move from the overcrowded and often populated “bills” population group to the powerful elite of good (and bad, just horribly, unspeakably bad) ideas that have become law.

The Honorable Brown can make repetitive signing motions without fear, of course, as California’s Workers’ Compensation system will no doubt provide him with yet another retirement fund upon his leaving office if he should sustain a cumulative trauma to his wrists, sleep disorder, etc., as a result of his work.

But one bill in particular has employers and unions alike hoping for passage.  That is, of course, Assembly Bill 378, which will strive to rein in the compound drugs industry sucking the last few drops of life’s blood out of California’s battered employers.

The problem of compound drugs was mentioned briefly in this post. California has a medical schedule which puts a cap on the amount doctors and medical equipment providers can charge for treatment, procedures, drugs, and equipment.

But this doesn’t apply to so-called compound drugs, which a doctor can both prescribe and make himself.  Combining aspirin with some placebo, a doctor could make a pill that is nowhere to be found on the fee schedule.

In theory, the self-insured employer or insurer could analyze the pills and apply the fee schedule to its component parts, but this brings with it the cost of bill review and litigation, leaving the defense grasping a Pyrrhic Victory.

AB 378 will strive to change this by preventing self-dealing in pharmacy goods, which means no more prescriptions for drugs produced by the doctor or the doctor’s relatives.  The bill also ties the cost of these compound drugs to the “lowest priced product of equivalent therapeutic effect.”

The bill appears to have support from both Labor and Employer groups, and hopefully will bear the governor’s signature before too long.  Naturally, the physicians and pharmaceutical interests will have some objections to AB 378 becoming law and to its application by the courts.

In other words, there are some fun times ahead.

Categories: Legislation
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  1. October 11, 2011 at 8:05 am

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