Cost Increases for Compounding Drugs Outpacing Traditional Medications

Since reliable data on compounded medications is limited, a recent study set out to determine the number of claims for these medications on a per user per year (PUPY) basis with the average cost of ingredients for these claims.

Compounding has been a long standing tradition in clinical practice, however, insurers and pharmacy managers have started questioning the safety and efficacy of compound medications and recently instituted policies to decrease claims.

For the study, published in the Journal of Managed Care & Specialty Pharmacy, researchers used prescription claims data from a nationally representative sample of commercially insured individuals whose pharmacy benefits were managed by a large pharmacy benefit management company. The health plan sponsors for these benefits included managed care organizations, public and private sector employer groups, third-party administrators, and unions.

The analysis was conducted between January 1, 2012 and December 31, 2013. The estimates for annualized prevalence, cost, and utilization were taken from the data. Prescription drug claims were adjusted to 30 day equivalents by dividing a days’ supply by 30.4.

In order to determine the most common ingredients that are combined in compounded medications, researchers used data-mining techniques or association rule mining.

The results of the study showed that more than 99% of total claims for compounded medications were from retail pharmacies, with the remaining percentage coming from hospitals, mail order pharmacies, or other nonretail pharmacies.

In 2012, compound users represented 1.1% (245,285) of eligible members, which grew to 1.4% (323,501) in 2013.

About 66% of compounded users were female and the average age was 42-years-old in the study.

Across the United States, prescription claims increased by 36.6% from 2012 to 2013 (7.1 million prescriptions to 9.7 million). The average utilization was 2 compounded prescriptions PUPY in 2012 and 2013.

The most commonly used compounded drugs were indicated for chronic pain or hormone replacement therapy, which was similar in all adult age groups.

As far as ingredients, the average cost in compounded medications increased from $308.49 in 2012 to $710.36 in 2013, an increase of 130.3%.

For non-compounded prescriptions, the average ingredient cost increased from $148.75 in 2012 to $160.20 in 2013, an increase of only 7.7%. The average cost for all ingredients was $81.50 in 2012 and $84.57 in 2013, a 3.8% increase.

The final data of the study revealed that in 2013, compounded users represented 1.4% of eligible members. The average ingredient cost of compounded prescriptions was found to be greater than those of non-compounded prescriptions.

PUPY utilization for compounded prescriptions and the prevalence of compounded users only increased by a small amount between 2012 and 2013. However, the mean and median cost of compounded medications had a dramatic increase during this same time period.

Additionally, text mining showed that drug combinations characteristics of topical pain formulations were one of the most frequently compounded medications for adults.