FALLS CHURCH, VA - Costs associated with compounded pharmaceutical products have risen dramatically over the last several years. According to a Military Times article published in February 2015, The Department of Defense (DoD) spent $746 million in 2014, up from $259 million in 2013.1 The article references DoD provided data indicating that DoD expenditures for compounded prescriptions amount to $6 million per day.1
While the patient is only responsible for paying the $17 co-pay per prescription, the cost to the MHS may be more than a typical prescription product. The average cost per compounded prescription is $2,135, with claims for a single compounded prescription exceeding $10,000.2 This billing practice is resulting in a significant expense, and having a negative impact on any savings generated by the MHS Pharmacy operations.
The difference in the compounded prescriptions responsible for increased costs and traditional patient-specific compounding is the result of a heavily marketed industry for products not approved by the Food and Drug Administration (FDA). These products claim to fill a niche market for pain relief, dermatologic conditions and other disorders where no FDA approved product exits. Many of the ingredients are non-FDA approved, and there is limited evidence-based medicine supporting the indication and/or delivery method of the compounded product.
Advocates for compounding argue that the compounded medications for pain management are reducing the need for oral opiate analgesics, however there is limited evidence of safety and effectiveness supporting this claim. Not all of the products associated with increased costs are for pain. Some are for wrinkles, scars, and other dermatologic indications.
Army Medicine's efforts have been to increase awareness among MTF providers to the associated costs and refill strategies employed by compounding pharmacies. The patient's provider is in the best position to make a determination if a patient will benefit from a compounded medication. Prescribing compounded medications should be followed up with periodic patient assessment to determine benefit, risks and the need to continue therapy. One challenge is that many providers may not know that they have patients receiving compounded prescriptions from outside compounding pharmacies. In addition, MTF providers may not be aware of the strategies used by the compounding pharmacy industry to market and increase prescribing for compounded prescriptions.
WHAT ARE COMPOUNDED PRESCRIPTIONS?
Healthcare providers typically think of compounded prescriptions, such as pediatric liquid preparations, as a method to transform a FDA approved tablet or capsule into a liquid preparation that is not commercially available and easier to administer to the patient. Other examples of routine compounding include preparations made without excipients known to be allergenic to a specific patient. Pharmacists also compound a variety of topical preparations that are not available commercially to fill a specific patient's clinical needs determined by the prescribing provider.
Reasons for compounding aim to fill the need for non-commercially available dosage forms, drug shortages or where the commercial product is simply not tolerated by an individual patient. These examples of traditional compounding are relatively inexpensive, with an additional and reasonable pharmacy compounding fee charged by the retail pharmacy. In some cases, such products are prepared by the local MTF pharmacy at a cost lower than that charged by the Network pharmacies.
Compounded prescriptions associated with increased costs use bulk active ingredients, which are either non-FDA approved drugs and/or transformed into a non-FDA approved drug product. For example, compounded products combine multiple active ingredients from bulk powders, injectable and/or transformed tablets/capsules to produce a non-commercially available route of delivery for these agents. The compounded products are usually applied topically and may contain as many as six (or more) active drug ingredients depending on the marketed indication. Compounding pharmacies market these products for dermatologic conditions, neuropathies, pain, inflammation and other uses.
SAFETY CONCERNS
The compounding pharmacies claim that their topical preparations target the affected areas directly, without causing systemic side effects. However, the Institute for Safe Medication Practices (ISMP) recently presented concern for compounded topical pain preparations in an article published in their January / February 2015 issue of SAFE Medicine, entitled, "Designer pain creams and ointments are profitable for compounding pharmacies but risky for patients and children".3 The article alerts providers and patients to the potential risks of using compounded prescriptions, and presents cases where adverse effects and harm have been associated with their use.
Concerns highlighted in the ISMP article include central nervous system and cardiac toxicity following topical administration, and children being exposed to compounded medications unintentionally after coming into contact with the product applied to a parent's skin. Other concerns include safe storage of compounded medicines outside of the reach of children, and lack of awareness that compounded prescription packaging may not be child resistant. Providers, pharmacists and other healthcare professionals should counsel patients on the potential risks, appropriate use and safe storage of compounded prescriptions to prevent adverse events and harm.
COMPOUNDING PHARMACY PRACTICES
The compounding pharmacy industry primarily operates by accepting prescriptions from providers or patients submitted through the mail or by fax, and filling them for delivery to the patient using in-house mail services.
The compounding pharmacy mail service is not associated with the TRICARE Mail Order Pharmacy known as Home Delivery. Compounding pharmacies may also use automatic refills, to ensure that the patient receives another prescription and that another claim is submitted to TRICARE. The compounding pharmacies submit claims directly to the TRICARE Pharmacy Program.
The Defense Health Agency (DHA) Pharmacy Work Group is aware of several practices that may be increasing sales of compounded prescriptions. For example, compounding pharmacies may encourage automatic refills by including printed language on the Network pharmacy's pre-printed prescription form. The prescribing provider must actively check a box or indicate on the form that "no refills" were authorized when they were prescribed, otherwise the compounding pharmacy may automatically refill the prescription and submit subsequent claims.
Also, the DHA reports that patients have received prescriptions refills without their provider's knowledge. Providers who become aware of this practice should call his/her patient to assess if continued use of the product is of clinical value, and call the compounding pharmacy to cancel the prescription, if necessary.
Compounding pharmacies are marketing directly to MTF providers and TRICARE beneficiaries. Healthcare professionals who become aware of such practices should report them to their chain of command.
The Centers for Medicare and Medicaid Services (CMS) do not cover non-FDA approved ingredients contained in compounded prescriptions. Private health systems provide compounded products, when indicated, using in-house pharmacies. The Department of Veterans Affairs also provides in-house compounded products on a limited basis. DHA recently established a screening process, including a prior authorization, which became effective on May 1, 2015, to govern claims associated with compounded medications.
References
1. Kime P. Agency to act on compound med reimbursements. Military Times. February 2, 2015. http://www.militarytimes.com/story/military/benefits/health-care/2015/02/02/tricare-compounded-medications/22523669/
2. TRICARE Compound Drugs 2015 Strategic Communications, Military Health System (MHS), updated March 10, 2015, distributed by the Defense Health Agency (DHA)
3. Designer pain creams and ointments are profitable for compounding pharmacies but risky for patients and children. SAFE Medicine, Institute for Safe Medication Practices (ISMP), January/February 2015, Volume 13, Issue 1
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