Austin, TX – The Texas Department of Insurance Workers’ Compensation Research Group recently released a new report that evaluates the utilization and cost patterns of compounded drugs dispensed in the Texas workers’ compensation system.
Compounding is a process where a pharmacist or a physician combines, mixes, or alters ingredients to meet specific needs of a patient, as an alternative to commercially available manufactured drugs. Compounding is a part of traditional pharmacy practice, but there is scant data on the number, type, and nature of compounded drugs. This report is the first extensive evaluation of the compounded drugs regarding their prevalence, costs, components, and utilization patterns by timing, “N” drug status, network status and geographic area.
Pharmacy service providers are required to report and bill ingredients of a compounded drug prescription as separate billing lines, but the billing data does not indicate whether one is a compounded drug or not.
For the report, a prescription is identified as a compounded drug if component bill lines contain bulk chemicals, pharmaceutical adjuvants, or powder-form of common ingredients of nonsteroidal anti-inflammatory drugs (NSAIDs) and muscle relaxants.
Key findings included:
Number & Cost of Compounded Drugs
- The number of compounded drugs increased from 18,020 prescriptions in 2010 (1.6 percent of total pharmacy prescriptions) to 26,380 in 2014 (3.2 percent of total). Since 2014, it decreased steadily to 20,751 in 2016 while their share of the total pharmacy prescriptions remained at 3.2 percent.
- In 2010, the total cost of compounded drugs was $6 million (4 percent of the total pharmacy cost of $152 million), which increased to $12 million in 2014 (12.5 percent of the total $112 million). In 2016, the total cost decreased to $11 million (11 percent of the total $98 million).
Compounded Drugs by Claim
- In 2016, 3,048 claims received one or more compounded drugs. This represented 2.5 percent of the pharmacy claims.
- Per-claim cost of compounded drugs increased from $1,993 in 2010 to $5,936 in 2016 (198 percent increase). This increase was mainly due to increases in the average cost per compounded drug prescription. The number of prescriptions per claim increased slightly since 2013.
- Among the claims receiving compounded drugs, 88 percent were lost-time claims in 2016.
- The most common type of injury among the claims receiving compounded drugs was back injury (31 percent of the claims in 2014).
Compounded Drugs by Accident Year
- The average number of compounded drugs per claim, at 6 months after injury, was at its lowest in Injury Year (IY) 2013 at 3 prescriptions per claim, which increased to 4.3 prescription per claim in IY 2015. At 12 months after injury, the average number of compounded drugs per claim was 6 prescriptions per claim in IY 2015.
Ingredients of Compounded Drugs
- Most common base ingredients were those used to prepare cream-based topical applications (Pluronic Lecithin Organogel bases).
- The use of manufactured and expensive proprietary bases increased significantly. In 2010, 5.3 percent of the compounded drug prescriptions contained proprietary bases, and they accounted for 35 percent of the base cost. In 2016, about 45 percent of the prescriptions contained proprietary bases, and these accounted for 86 percent of the total base cost.
- In 2016, Baclofen was the most common active ingredient in compounded drugs, followed by Gabapentin, Cyclobenzaprine, and Flurbiprofen.
Click here to download the full report: TDI-DWC: Baseline Evaluation of the Utilization and Cost Patterns of Compounded Drugs (PDF)