Compounded drugs account for less than 3% of prescribed medications in workers' compensation but their use is expanding rapidly and prices are skyrocketing, according to a report from Express Scripts, the largest pharmacy benefits manager in the country.
The company reports per-user-per-year costs rose 126% between 2012 and 2013, with the average cost of compounds per prescription around $1,300. Analysts note compounding is growing rapidly in group health and workers' compensation as states have controlled other cost drivers, such as drug repackaging and physician dispensing.
"Even though the absolute percentage of users is small, the doubling in the percentage of injured workers obtaining medications that, on average, cost $1,299.13 per prescription, will undoubtedly impact payers financially," Express Scripts says in its Workers' Compensation 2013 Drug Trend report.
Compounded medications, used primarily for pain management, are prepared and dispensed by compounding pharmacies, which are licensed by the board of pharmacy in the state in which they are located, with limited FDA oversight. "Compounded medications are not subject to the rigorous drug review process that all commercially available prescription drugs must undergo to demonstrate safety and effectiveness prior to FDA approval. Further, compounded medications generally do not have standardized dosages and duration for use, and the protocols for preparing each compound are not necessarily standardized," the company adds.
"For all of these reasons, compounded preparations are likely to have batch-to-batch variability, and their sterility and purity cannot be guaranteed. Yet because of the time, effort and expertise necessary for pharmacists to create compounded products, their costs are often much higher than those of standard medications," it notes.
One argument in favor of compounded analgesic drugs is they have the potential to offer pain relief when a commonly used drug does not work, or when a patient cannot tolerate its side effects. But Express Scripts reports that in at least 25% of cases in 2013, injured workers were prescribed compounded medications before they had even tried commonly used drugs.
The difference in price is striking. For instance, the average cost per prescription for compounded versions of diclofenac, a widely used anti-inflammatory drug, was $770 in 2013, versus $46 per prescription for a commercially available alternative. Diclofenac often is compounded in strengths other than those in commercial preparations.
Compounded drugs, which typically are customized for each patient, include topical creams and gels, injections and oral liquids, anesthetics, anticonvulsants, analgesics, and muscle relaxants. "In the past compounds would typically combine two or three different ingredients. Today, it's not unusual for us to see claims for compounds that combine up to a dozen or more active ingredients," David Calabrese,vice president and chief pharmacy officer at pharmacy benefit manager Catamaran Corp., commented to Business Insurance.
"And that's obviously going to increase the cost of the compound, but simultaneously increase some of the safety concerns that we have relative to these products," he added.