CA AB2779

Requires compounded drugs dispensed on or after November 1, 2010 to be reimbursable only if the physician's request for authorization is submitted for prospective utilization review and expressly identifies the drug as compounded.

Mandates that all active ingredients in compounded drugs must be approved by the federal Food and Drug Administration and all other ingredients must be listed by the United States Pharmacopeia.

Prohibits reimbursement for compounded drugs that copy or substitute for available FDA-approved products, unless FDA-approved alternatives have been tried with documented therapeutic failure or patient intolerance.

Caps the maximum allowance for compounded drugs to the sum of ingredient costs and compounding fees allowed under existing regulations, with no reimbursement for ingredients lacking a valid National Drug Code and Medi-Cal database price.

Declares the act an urgency statute effective immediately to address abusive billing practices for compounded drugs that inflate workers' compensation costs.