(CBS) — The costs for custom-made drugs from compounding pharmacies have skyrocketed, according to federal investigators who are raising questions about possible fraud, abuse and patient safety.
Now, one of those patients wants to warn others not to fall into the same trap that she did.
Shirley Fox had sticker shock when she realized a prescription cream for her Fibromyalgia cost $645 — for a 4-ounce jar. The cost put her over the limit of what her Medicare Part D plan would pay for drug coverage.
It was a compound pain cream prescribed by Dr. Aravind Gopal. Fox says the doctor’s assistant told her there wouldn’t be a charge.
“He’s prescribing that to people that have pain,” Fox said the assistant told her. “You don’t have to worry about paying for it. It’s complimentary. I said, ‘Okay.’”
In all, five jars arrived, billing Medicare a total of $3,225.
Pharmacist Jateen Kumar Patel made the compound of Etodolac and Lidocaine ointment.
When the 2 Investigators confronted Patel about the issue he insisted that a doctor prescribed the cream for Fox.
Patel says he fills 15 prescriptions a day for the cream, which adds up to about $2.5 million a year.
Fox says she did try the cream but it didn’t work.
Because the cost of the cream had used up her benefits, she was on the hook to pay for the next $3,000 of her other prescriptions.
“I said, ‘Oh, no. What am I going to do?’”
It’s an all too familiar story at the Inspector General’s Office at the U.S. Department of Health and Human Services.
“Patients are basically duped into trying these medications,” says Michael Cohen, an investigator in the I-G’s office.
A recent report warns of “fraud and safety concerns” when it comes to compound drugs.
Medicare spending on compound topical drugs has increased from $6 million in 2006 to $224 million in 2015. That’s an increase of 3,466 percent.
“In terms of fraud, it appears that we are losing hundreds of millions of dollar for these medically unnecessary compounded drugs,” Cohen says.
Patel defended the product saying: “Our product works, it’s not a fraud.”
He claims he has to charge $645 a jar to comply with industry standards.
“I’m not overcharging them,” Patel says. “It’s the average wholesale price.”
University of Illinois Pharmacology experts estimate it costs about $150 to make the cream and a reasonable charge would be about $300.
Patel agreed that the charge appears to be outrageous, but insists he has no choice in what to charge.
Patel said he was not trying to gouge Shirley Fox and he has since reversed the charges on Fox’s Medicare plan.
Dr. Gopal did not talk CBS 2. An Advocate spokesperson says Gopal prescribed medication that he felt was appropriate.