Utilization and Costs of Compounded Medications for Commercially Insured Patients, 2012-2013

BACKGROUND: Although compounding has a long-standing tradition in clinical practice, insurers and pharmacy benefit managers have instituted policies to decrease claims for compounded medications, citing questions about their safety, efficacy, high costs, and lack of FDA approval. There are no reliable published data on the extent of compounding by community pharmacists nor on the fraction of patients who use compounded medications. Prior research suggests that compounded medications represent a relatively small proportion of prescription medications, but those surveys were limited by small sample sizes, subjective data collection methods, and low response rates. OBJECTIVE: To determine the number of claims for compounded medications on a per user per year (PUPY) basis and the average ingredient cost of these claims among commercially insured patients in the United States for 2012 and 2013. METHODS: This study used prescription claims data from a nationally representative sample of commercially insured members whose pharmacy benefits were managed by a large pharmacy benefit management company. A retrospective claims analysis was conducted from January 1, 2012, through December 31, 2013. Annualized prevalence, cost, and utilization estimates were drawn from the data. All prescription claims were adjusted to 30-day equivalents. Data-mining techniques (association rule mining) were employed in order to identify the most commonly combined ingredients in compounded medications. RESULTS: The prevalence of compound users was 1.1% (245,285) of eligible members in 2012 and 1.4% (323,501) in 2013, an increase of 27.3%. Approximately 66% of compound users were female, and the average age of a compound user was approximately 42 years throughout the study period. The geographic distribution of compound user prevalence was consistent across the United States. Compound users’ prescription claims increased 36.6% from 2012 to 2013, from approximately 7.1 million to approximately 9.7 million prescriptions. The number of claims for compounded medications increased by 34.2% during the same period, from 486,886 to 653,360. PUPY utilization remained unchanged at 2 prescriptions from 2012 to 2013. The most commonly compounded drugs were similar for all adult age groups and represented therapies typically indicated for chronic pain or hormone replacement therapy. The average ingredient cost for compounded medications increased by 130.3% from 2012 to 2013, from $308.49 to $710.36. The average ingredient cost for these users’ non-compounded prescriptions increased only 7.7%, from $148.75 to $160.20. For comparison, the average ingredient cost for all prescription users’ claims was $81.50 in 2012 and increased by 3.8% to $84.57 in 2013. CONCLUSIONS: Compound users represented 1.4% of eligible members in 2013. The average ingredient cost for compound users’ compounded prescriptions ($710.36) was greater than for noncompounded prescriptions ($160.20). The 1-year increase in average compounded prescription costs (130.3%) was also greater than for noncompounded prescriptions (7.7%). Although prevalence of compound users and the PUPY utilization for compounded prescriptions increased only slightly between 2012 and 2013, the mean and median cost of compounded medications increased dramatically during this time. Text mining revealed that drug combinations characteristic of topical pain formulations were among the most frequently compounded medications for adults.