Drugs Compounded for Military Face Stricter Screening

Veterans Affairs covers few compounded medications through pharmacies and via mail order. 


Citing drug safety and cost issues, Tricare made some changes effective Friday that could affect the military community’s use of compound drugs.

According to Health.mil, the official website for the Military Health System (MHS) and the Defense Health Agency (DHA), compound medications only comprise 0.5% of Tricare prescription volume, yet account for 20% of costs. Specifically, MHS costs for compound medications jumped from around $54 million in August 2014 to $330 million in March 2015.

According to Military Times, Tricare paid $769 million for compound prescriptions between January and March 2015, and April’s totals may reach nearly $1 billion. Meanwhile, the prescription drug budget for 2015 is $8.25 billion, meaning the DHA could run into trouble with its medication budget by the end of the year.

In addition, marketers have been cold calling some Tricare beneficiaries to gain personal health information and offer them “unwanted prescriptions, which are then billed at great cost to the Tricare,” the MHS noted.

Because of these issues, starting May 1, 2015, Tricare pharmacy contractor Express Scripts will screen the ingredients of all compounded drugs to ensure they are covered by Tricare, are FDA approved, and do not exceed the cost standard. If a beneficiary’s compounded medication does not pass this new screening, the pharmacist can replace or remove the ingredient, or call the patient’s physician about a new medication.

In addition, physicians can request prior authorization from Express Scripts—a process that will allow for an individual review of the patient’s compounded medication. The prior authorization process would require the physician to submit various information concerning other commercially available medications that the patient has tried in the past, whether there is a shortage of a commercially available product, and the amount of time the patient would need the compound medication.

Express Scripts would then consider on an individual basis whether ingredients had been withdrawn from the market for safety reasons, if they were lawfully marketed, if there is “widely recognized evidence” they are safe and effective, and if the patient does not have the ability to use an FDA-approved product due to allergies or contraindication.

Health.mil noted Tricare had previously screened drugs to ensure they were safe and effective, but now it will review specific ingredients. The website did not give an estimate on how many medications or ingredients would be affected by the policy change, but it did say Express Scripts was reviewing more than 1000 ingredients commonly used in compounded medications.

“Most compound claims should meet the coverage criteria and be approved with no delay to beneficiaries,” Health.mil stated.

Another policy change is Express Scripts will negotiate pricing for compound ingredients with retail network pharmacies. Beneficiaries who may be affected by the Tricare policy changes were notified by mail in March, but they can also call Express Scripts to determine whether their compound prescription will likely be covered. 

Compared with Medicare and Veterans Affairs (VA), Health.mil described Tricare’s compound coverage policy as “more generous than most government and commercial health plans.”

Medicare, Health.mil noted, does not cover medications that contain ingredients that were not approved by the FDA, and the VA covers few compounded medications through VA pharmacies and via mail order.

In response to the “significant” number of cases in which Tricare beneficiaries received cold calls for their personal and health information and to offer topical compound medications, the DHA had issued a press release in early April advising all beneficiaries never to share their information with these kinds of callers.

The DHA encouraged Tricare beneficiaries to contact Express Scripts to file a Fraud-Line report about the issue, if they receive such calls. 

The callers would often say they can offer a Tricare-covered prescription pain cream that will be beneficial if the patient experiences pain or 1 of a list of medical issues, according to the DHA. The marketers would then say they need the patient’s doctor’s name and Tricare information so that they can get the medications for them and submit a claim. In addition to cold calling, some marketers have allegedly targeted beneficiaries inside military hospital pharmacies.

Some compounding manufacturers were issued a hold on payments from the DHA due to investigations into alleged fraud or illegal sales, according to Military Times.

“DHA has instituted a suspension of payment to some pharmacies that our research shows have some suspicious billing practices,” Tricare's pharmacy chief George Jones told Military Times




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