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Compounded medications

April 16, 2019 · Optum


Compounding is an age-old process used by pharmacists to create personalized medications to patients in need. It is defined as a combined, mixed, or altered drug prepared for the specific needs of one patient. Manufacturers will never be able to produce every medication, in every strength, and every dosage form that a patient may require, and this is where pharmaceutical compounding can be of benefit. For example, if a patient has allergies or other health problems that prevent the use of an FDA-approved, commercially prepared medication, a compounded medication might be a viable alternative. The inability to tolerate or failure of other first-line therapy options are other situations for which compounded medications may offer benefits.


In recent years, pharmacists, physicians, and businesses have realized that compounding can be a  source of revenue. Research from the California Workers’ Compensation Institute (CWCI) showed a quadruple increase in usage of compounded medications from 2006 to 2009, while the average amount paid per compounded medication prescription increased 68.2% from $460.42 to $774.21 (2011 to 2012). Use is similarly growing in the auto no-fault industry.

Because compounded medications contain multiple ingredients, the pricing can be difficult to determine. This sometimes leads to costs that are exponentially higher than their commercially-available equivalents. As an example, a typical first-line therapy for muscle pain or inflammation – a common ailment in workers’ compensation and auto no-fault injuries – is a Non-Steroidal Anti-Inflammatory (NSAID), such as ibuprofen, and a muscle relaxant, like cyclobenzaprine, for a cost of around $85 for a 30-day supply. Compounded medications that have been prescribed for the same symptoms have ranged anywhere from $2,000 to $4,000 for a 30-day supply. These creams contain numerous medications, some even within the same therapeutic class, which could lead to drug-to-drug interactions, leading some to question the safety of compounded medications.

Since compounded medications are not FDA-approved, regulated, or tested, there have also been a number of voluntary recalls in recent years due to contamination or a lack of sterility. In 2012, 64 people died from a fungal infection brought about by non-sterile compounded medications. In addition, the Official Disability Guidelines do not recommend compounded medications as a first line of therapy, rather they are considered a second or third line of therapy.

O​ur perspective

Optum manages the cost and utilization of compounded medications through the use of a variety of tools and resources. Medication plans and formularies require evaluation of each ingredient. Prior approval from the claims professional or nurse case manager is also pursued. This process ensures an informed decision by providing an opportunity to weigh the appropriateness of the compounded medication, which in turn, helps make certain the injured person receives the most clinically appropriate and cost-effective treatment. Concurrently, we review medication therapy regimens, watching out for possible drug-drug interactions, side effects, and therapeutic duplication (amongst other clinical concerns). When a possible therapeutic concern is identified, we enlist clinical intervention tools where appropriate.

In addition to our clinical programs, our government affairs team regularly engages policymakers in a discussion about their state’s approach to compounded medications, offering recommendations for change that serve to control costs and promote safety. These efforts, in collaboration with those of our clients, are lighting the way forward by emphasizing clinical efficacy, medical necessity, and appropriate reimbursement – allowing for better decisions and protecting the injured people we serve in the process.


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