Closing the Compounding Loophole

Jun 18, 2014
Express Scripts' compound prescription management solution helps rein in rising costs, while ensuring patients maintain access to the medication they need.
  • Compound Medications

The cost associated with compounding medications has skyrocketed over the past two years. For patients, the prescription price for a compounded medication has risen more than tenfold on average: from $90 to $1,100 per prescription. Payers have felt similar pain – in Q1 2012, Express Scripts clients spent about $28 million on compounded medications, while just two years later, the quarterly spend was $171 million.

What’s going on here? Do more patients need compounded medications? Absolutely not.

Some compounding pharmacies, drug manufacturers and physicians have driven up the cost of compounds significantly, not due to patient demand, but by their own demand for more money. They have taken advantage of a loophole to pad their pockets while offering little to no benefit to patients.

By charging hundreds or thousands of dollars per gram of bulk powder or cream, certain compounding pharmacies have needlessly driven up the cost of care. As a result, some elements that are used to make compounded medications have been exorbitantly overpriced. Our clients and their members have been paying the price.

Express Scripts has made strides in reining in these costs, and we are introducing an industry-leading program that will do even more to protect client budgets and preserve patient care. Our compound prescription management solution will do the following:

  • Ensure patients who need compounds will receive compounds
  • Evaluate all compound ingredients to identify needless cost and waste
  • Actively and regularly manage the use of compounded medications
  • Target, or block, more than 1,000 ingredients (bulk powders) whose prices have been greatly inflated but that provide no additional clinical benefit

There is no charge to our clients for this new solution, only the benefit of saving 95% of the costs that have been associated with compounded medications while impacting just 0.6% of the patients we serve. It is an actively managed solution with Express Scripts clinical experts continually monitoring pricing adjustments of compound ingredients and taking necessary action to manage waste out of the pharmacy benefit.

If a patient truly needs a compounded medication covered by their plan, we will make sure they get it. In many cases, patients who take compounded medications do so because they cannot ingest available alternatives. For example, a patient who cannot swallow a tablet may need it crushed or liquefied. But, by and large, compounded medications do not provide any additional clinical value over what is currently available. There are numerous FDA-approved or over-the-counter alternatives that patients can take. And we will continue to offer those alternatives to patients as a way to address their health needs and control costs.

Patients need access to the medications that work best for them. We recognize some compounds are legitimate, and we recommend that clients continue to cover these types of compounds. However, we also understand that some pharmacies, physicians and manufacturers have taken advantage of a loophole that has allowed them to charge high prices for low-value alternatives. That has to stop, and it is our job to make sure it does.

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