October 7, 2015
TRICARE’s Refusal to Cover Some Compounded
Medications Protested

Washington, D.C.—The National Community Pharmacists Association (NCPA) and the International Academy of Compounding Pharmacists are backing a bipartisan group of 31 U.S. Congress members protesting a Department of Defense (DoD) TRICARE policy change that significantly reduces coverage for compounded prescriptions.

Leading the effort are Reps. Earl L. “Buddy” Carter (R-GA), a pharmacist himself, and Peter Welch (D-VT), an attorney. The group recently sent a letter to the DoD saying the billing changes have “greatly impacted” beneficiaries’ access to compounded drugs.

“We understand these recent changes are in response to deceptive marketing practices conducted by a select few compounders,” they write. “While we believe deceptive entities should be pursued and dealt with accordingly, TRICARE beneficiaries should not be denied access to compounded medications due to a few bad actors.”

Beginning in May, TRICARE began screening all ingredients in compound drugs to ensure they are FDA-approved and covered under the plan. Screening was tightened because of the number of claims for compounds of “dubious clinical evidence and excessive cost,” according to the Defense Health Agency (DHA).

DHA said it paid $18 million a day in compound drug claims in April, but, by July, the daily costs had dropped to $360,000 as a result of the new process. In fact, in the first quarter of 2015, compounded drugs accounted for more than 20% of all DHA pharmacy expenditures, while representing just 0.5% of the total number of prescriptions for only 0.4% of all beneficiaries, according to agency statistics.

Topical creams to treat pain accounted for the biggest increases in compound drug costs in recent years, rising from $5 million in 2004 to $514 million in 2014 to more than $500 million in the month of April alone, DHA said.

TRICARE said it will continue to cover most compound drugs, and that, when ingredients are not covered, compounding pharmacists should be able to substitute ingredients that meet its standards. Providers also are invited to provide evidence of a compound’s safety, effectiveness, and appropriateness for their patient’s needs with requests for prior authorization to gain coverage of specific compounds.

B. Douglas Hoey, NCPA CEO, said that still limits coverage for beneficiaries.

“These representatives speak for many community pharmacists and their patients who struggle with this new policy and appreciate the lawmakers’ efforts,” he noted. “Quite simply, TRICARE must achieve a better balance: ensure patient access to medication their doctor has prescribed and crack down on those out to abuse the program.”

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