HEALTH

IRS’ updated FSA rules regarding OTC medicines draw response

BY Michael Johnsen

WASHINGTON The Internal Revenue Service earlier this month issued guidance reflecting statutory changes regarding the use of certain tax-favored arrangements, such as flexible spending arrangements, to pay for over-the-counter medicines and drugs.

The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements. Under the new standard, the cost of an OTC medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or such other healthcare expenses as medical devices, eye glasses, contact lenses, co-pays and deductibles, the agency stated. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 still can be reimbursed in 2011 if allowed by the employer’s plan.

WageWorks, a provider of consumer-directed benefits solutions, including FSAs, this past summer advocated an extension of that Jan. 1 deadline, arguing that all parties — consumers, retailers and third-party administrators — needed additional time to react to the changes. “This restriction will hurt millions of consumers who rely on their FSAs to manage their out-of-pocket healthcare costs and pay for necessary over-the-counter therapies,” stated Joe Jackson, CEO of WageWorks. “If Congress is intent on putting this provision into effect, they should at least push back the deadline so that consumers — and especially retailers — are ready for the transition.”

 

Jody Dietel, president and chair of the Special Interest Group for Inventory Information Approval System Standard said, “Without clarification on the type of permission needed for FSA reimbursement for OTC drugs, consumers, retailers and third-party administrators will be confused and unlikely to fully comply with the new regulations by the start of new year. Meanwhile, we’re likely to see doctor’s offices overwhelmed with patients seeking prescriptions to use their spending accounts for Claritin, Zyrtec and other OTC items,” she said. “A delay in implementation will provide time for all parties to be better educated on the issue and prepared to comply with the new rules.”

 

 

SGIS maintains an electronic list of FSA-eligible products used by most retailers in the country.

 

 

The new regulations, even the recent guidance issued by the IRS, leave many questions unanswered, according to a report on The Bulletin published last week. Will physician prescriptions be required to specify a number of pills with the prescription, or can consumers buy bulk-sized containers of pain relievers? And if pharmacies must process prescriptions for aspirin or cold medication, will they seek some dispensing fee for their time?

 

 

“We’re concerned that there will be a lot of confusion out there,” Jeff Beadle, CEO of SIGIS, told The Bulletin. “Someone is buying Tylenol in December, and they can’t now buy Tylenol in January unless they go to their doctor and get a prescription first.”

 

 

The report suggested retailers will face an additional challenge — when to update the list of eligible products under FSA plans because many FSA plans do not run on a calendar year.

 

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FDA clarifies position on low blood pressure drug

BY Alaric DeArment

PHILADELPHIA The Food and Drug Administration did not completely withdraw from the market a drug used to treat a dangerous low blood pressure condition, but merely proposed to do so as a “step in the regulatory process,” according to a document posted on the agency’s website Monday.

The agency said its proposal last month to withdraw approval for Shire’s drug ProAmatine (midodrine) did not represent the actual withdrawal of the drug from the market, while calling for more data on the drug to verify its clinical benefit.

 

The drug, originally made by Roberts Pharmaceutical, received accelerated approval in 1996 as a treatment for orthostatic hypotension, a condition in which patients are unable to maintain blood pressure when standing. The drug since has been approved in generic form as well. Shire acquired rights to the drug when it acquired Roberts in 1999.

 

On Aug. 16, the FDA proposed withdrawing marketing approval for ProAmatine because of a failure of clinical study data to demonstrate its efficacy in patients with the condition, though many patients, physicians and professional groups continue to regard it as efficacious, according to the document. Shire announced Aug. 17 that it had elected to withdraw the drug, effective Sept. 30.

 

Shire hailed the news. “Shire is very pleased that FDA has stated that ‘continued patient access to midodrine is a key agency priority’ and that the FDA has taken action allowing midodrine to remain accessible to patients and their families who rely on this medicine,” Shire SVP research and development Jeffrey Jonas said. “We look forward to continuing our ongoing discussions with the FDA related to the efficacy of this medicine.”

 

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CDC issues report on breast-feeding among mothers

BY Michael Johnsen

ATLANTA Three-out-of-4 new moms initiate breast-feeding, according to the “2010 Breast-feeding Report Card” released Monday by the Centers for Disease Control and Prevention. However, only 43% of babies are still being breast-fed at 6 months of age.

The 75% breast-feeding initiation rate meets the nation’s Healthy People 2010 goal, and half of the states have breast-feeding initiation rates above 75%.

“Meeting the national breast-feeding initiation goal is a great accomplishment in women’s and children’s health, but we have more work ahead,” stated William Dietz, director of CDC’s Division of Nutrition, Physical Activity and Obesity. “We need to direct even more effort toward making sure mothers have the support they need in hospitals, workplaces and communities to continue breast-feeding beyond the first few days of life, so they can make it to those 6- and 12-month marks.”

State by state breast-feeding initiation rates ranged from 52.5% in Mississippi to nearly 90% in Utah.

While initiation rates steadily have risen, the number of babies who continue breast-feeding until 6 months and 12 months remains stagnant for the third consecutive year. Only 43% (1.8 million) are still breast-feeding at 6 months, and only 22% (fewer than 1 million) are breast-feeding at 12 months. National Healthy People 2010 objectives call for 50% of new mothers to continue breast-feeding for 6 months and 25% to continue for one year.

Breast-feeding at 6 months of age ranged from over 62% in Oregon to about 20% in Louisiana. Breast-feeding at 12 months ranged from nearly 40% in Oregon and Vermont to 8% in Mississippi.

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