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WorkCompCentral: PBMs Make Progress in Controlling Spending on Compounded Drugs
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7-26-16

Elaine Goodman

 

Coventry Workers' Comp Services saw a decline in the number of prescriptions for compounded medications fall last year, reversing what the company called a troubling trend in previous years of unchecked growth.

 

According to a drug trend report, the company released Monday, the cost of compounded drugs fell to 5.4% of total drug spending at in-network pharmacies in 2015, down from 7.7% in 2014. And the average cost per compound in network fell 1.6%.

 

Coventry said it took a variety of steps that contributed to the decrease, including evaluating compounds for clinical necessity at the drug-ingredient level. In addition, the company advocated for state reform measures regarding compounds, beefed up training of claims examiners on the medications and scrutinized compound providers - even removing certain providers from its network as deemed necessary.

 

"More work is needed, but we have pushed back the initial surge and are continuing to hone our efforts,"  the company said in its report.

 

In contrast to the drop in compound spending at in-network pharmacies, out-of-network spending increased to 31.9% of the total last year, up from 28.1% in 2014. The cost per compound out of network grew by 18.2%.

 

In-network use of compounded drugs fell in each of the top 10 states in Coventry's report. Out of network, compound use grew in six of the top 10 states, jumping by 154.5% in New York.

 

Compounds represented 1% of total prescriptions last year and 12% of total cost, Coventry reported. Opioids accounted for 26% of total costs.

 

The in-network or "managed" prescriptions included retail, mail-order and extended-network orders that represented 71.7% of all prescriptions and 75.4% of the total paid amounts.

 

Express Scripts similarly saw a reversal in spending on compounded medications in workers' comp claims. Per-use, per-year spending dropped by 33.7% in 2014-15 as compared to the previous year, according to the company's drug trend report released in April. The drop followed increases in per-user, per-year spending on compounds of 127% in 2012-13 and 45% in 2013-14.

 

Compounded medications aren't on Express Scripts' workers' compensation formularies, and pre-approval is needed before filling prescriptions. The company said compounds are still available to injured workers who need them, such as in cases where the patient needs a liquid formulation because he or she can't swallow a pill. Express Scripts described those instances as rare.

 

Outside of workers' comp, Express Scripts implemented an electronic screening of prescriptions for compounded medications for the federal Tricare health care program for military members. The program resulted in a 74% reduction in spending on compounded medications just one month after it was launched in May 2015, Military Times reported.

 

The screening is intended to ensure that each ingredient in a compound is covered by Tricare, is safe and effective, and is medically necessary. If the compounded drug or any of its ingredients don't pass the screening, the pharmacist can replace the ingredients that's not covered with one that is. Or the patient can ask his doctor for a different medication.

 

John Voliva, registered pharmacist and executive vice president of the International Academy of Compounding Pharmacists, said Express Scripts' screening program has been effective at reigning in Tricare's spending on compounds. But it may have gone too far in restricting patients' access to compounds, he said.

 

IACP favors one of two approaches for controlling spending on compounds, Voliva said. In one strategy, the pharmacy benefit manager would work with a third-party compound-drug specialist who would evaluate prescriptions for compounded drugs, looking at such issues as whether the ingredients were indicated and being included at appropriate strengths.

 

"Most PBMs don't have that intricate knowledge of compounding," he said.

 

Another option would be to set a dollar cap on prescriptions for compounded drugs, such as $500, $750 or $1,000. Prescriptions rejected for exceeding the cap could still be appealed, Voliva said.

 

(C)2016 WorkCompCentral - reprinted with written permission.

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