Medicare to cut funds to unapproved drugs

Aug. 24, 2006 at 11:27 AM
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WASHINGTON, Aug. 24 (UPI) -- The head of Medicare has said the provider plans to cut payments to pharmacies that produce non-FDA-approved versions of asthma and respiratory drugs.

Medicare Administrator Mark McClellan said in a letter to U.S. Sen. Charles Grassley. R-Iowa, that payments to the pharmacies would be "significantly lower" and devoid of "any inappropriately large financial incentives" encouraging the pharmacies to manufacture their own drugs, USA Today reported Thursday.

The move follows a warning from the Food and Drug Administration, which said pharmacies operated by three medical-supply companies might be violating federal laws by mass producing "thousands of doses" of drugs not approved by the organization.

Grassley said Wednesday that McClellan's letter was a "very positive response" to concerns raised by consumer advocates that buyers might not be aware that the drugs are not approved by the FDA and are manufactured using safety and sterility rules that fall short of regulations set by the government.

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