Express Scripts tightens up payments for compounded drugs

The nation’s largest pharmacy benefit manager, Express Scripts, is dramatically scaling back its coverage of compounded medicines, saying most of the custom-mixed medicines are ineffective or overpriced.

The company, which manages prescriptions for 90 million in the U.S., plans to drop coverage for 1,000 drug ingredients commonly found in compounded medicines. Express Scripts executives say the move is a cost-saver for employers that will reduce their spending on compounded prescriptions by 95 percent.

“What we are eliminating is, pure and simple, wasteful spending,” said senior vice president Glen Stettin. “These drugs are being used when there are other things available that are already approved by the FDA and are less expensive.”

The coverage change, effective Sept. 15, has prompted a swift pushback from compounding pharmacists, who argue that such cuts deprive patients of crucial medicines that are not available as manufactured drugs. A compounding pharmacy industry spokesman said similar efforts to curb coverage are in the works from several insurers and pharmacy benefit providers, including UnitedHealthcare and some Blue Cross Blue Shield plans.

“This is the first time we’ve seen a systematic approach to substantially, effectively cut compounding coverage,” said Jay McEniry, executive director of the recently launched Patients and Physicians for Rx Access.

The cuts by Express Scripts will take effect Sept. 15, unless customers specifically ask to continue paying for the compounded drugs.

Compounded medicines are custom-mixed by pharmacists to meet the prescribing instructions provided by a doctor. For instance, if a patient is unable to swallow a pill their doctor may order a liquid formula from a compounding pharmacy.

Express Scripts says patients will still be able to get necessary compounded medicines. Its cuts focus on untested topical creams and ointments used to treat pain and other conditions. For example, Express Scripts says some pharmacies will mix five or more drugs into a pain cream even though there’s no evidence the combination is better than a single-ingredient drug. And in many cases that ingredient is available over the counter or by conventional prescription.

This story was originally published July 4, 2014 at 12:56 PM with the headline "Express Scripts tightens up payments for compounded drugs."