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Compound Drugs

The Military Health System’s highest priority is the safety, health and well-being of our beneficiaries. Compound drugs are:

  • A combination of two or more drugs
  • Prepared by a pharmacist
  • For an individual patient’s needs

Some compound drugs contain ingredients the use of which is not supported by a widely recognized body of peer-reviewed clinical evidence. Recently, the cost of many ingredients used in compounds has increased greatly, so that in April 2015, compound drugs made up only 0.5% of all TRICARE prescription volume, accounted for 20% of costs.

Because of these concerns, we now screen every ingredient in compound drug prescriptions to ensure they are safe, effective and appropriate for our beneficiaries.

Frequently Asked Questions

View questions and answers about TRICARE's new compound drug policy, effective May 1, 2015.

Q1:

What is the change to TRICARE's compound drug policy?

A:

TRICARE now screens all ingredients in compound drugs to ensure they are safe, effective and medically necessary. TRICARE has always screened drugs for these standards, but now we will be able to screen the specific ingredients in compounds. TRICARE has established prior authorization review for compounds that don’t meet the initial screening criteria.

Q2:

How will I know if this change affects me?

A:

Beneficiaries can contact Express Scripts at 1-877-363-1303 to see if they are taking a compound prescription. Express Scripts may be able to review your previous claims for compound drugs to see if it meets the criteria will pass the screen.

Q3:

What criteria does my compound drug need to meet for TRICARE to cover it?

A:

All ingredients in you compound must be lawfully marketed in the United States, widely recognized as safe and effective, and you must demonstrate that the compound is medically necessary.

Q4:

What if my compound prescription doesn't pass the initial screening?

A:

Your doctor can request prior authorization from Express Scripts. Requesting prior authorization allows Express Scripts and TRICARE to review each prescription on an individual basis, based on the criteria established by TRICARE. Your doctor must submit to Express Scripts:

  • The diagnosis or condition that will be treated by the compound
  • List of commercially available products tried in the past
  • State if there is a national drug shortage for the commercially available product
  • The estimated length of time you will need the compounded medication

Once Express Scripts receives the documentation, the request will be screened on these criteria:

  • Has any ingredient been withdrawn from the market by the FDA for safety reasons?
  • Are all ingredients lawfully marketed within the United States?
  • Is there widely recognized evidence in the U.S. supporting that ingredient being safe and effective?
  • Are the commercially available, FDA products inappropriate (e.g., inability to take a solid dosage form, dose based on age or weight) and/or a FDA-approved product cannot be taken due to allergies or contraindication.
Q5:

What other evidence will TRICARE consider to determine if a compound drug prior authorization is allowed?

A:

In accordance with Sec. 704 of the FY 2015 National Defense Authorization Act, TRICARE will consider as evidence that a compound ingredient is safe and effective:

  • Clinical trial published in refereed medical literature
  • Formal technology assessments
  • The positions of national medical policy organizations, national professional organizations or national expert opinion organizations
  • Other validated evidence as the Secretary of Defense considers appropriate
Q6:

Why did TRICARE make this change?

A:

TRICARE has a responsibility to ensure that all drugs we cover are safe, effective and medically necessary. Previously, TRICARE was not able to screen compound claims for specific ingredients to determine if they are safe and effective. The new policy also allows TRICARE to apply similar payment policies to compound drugs as to other prescription drugs. TRICARE has a responsibility to be good stewards of the taxpayer dollars entrusted to us.

Q7:

Why does the change apply to all compound drugs, not simply those with bulk chemicals?

A:

TRICARE screens all prescriptions drugs to ensure they are covered. The new process applies this review to the ingredients in compound drugs. Most compound claims should meet the coverage criteria and be approved with no delay to beneficiaries.

Q8:

What documentation will qualify to show the compound ingredient is "widely recognized" in the United States as being safe and effective?

A:

TRICARE regulations specify the evidence that can be used and includes published clinical trials in refereed medical literature, formal technology assessments, the positions of national medical policy organizations, national professional associations, or national expert opinion organizations.

Q9:

How many drugs or ingredients will be affected by the compound drug policy change?

A:

Approximately 40,000 line items in a prescription will trigger a prior authorization review. This includes multiple line items for individual ingredients, such as more different dosage levels.

Q10:

What types of compound drugs require prior authorization? What types of illnesses or symptoms do they treat?

A:

The most common type of compound drugs that require prior authorization are topical pair or scar creams. 

Q11:

How does the new compound drug policy compare to how other government and commercial plans cover compound drugs?

A:

In general, TRICARE’s new compound coverage is still more generous than most government and commercial health plans. The VA only covers very select compounds, but only through VA pharmacies or mail order. Medicare does not cover compound drugs containing non-FDA approved ingredients.

Q12:

Why did TRICARE not wait for the FDA to make a final determination on non-sterile compounds?

A:

The FDA released recommendations in July 2014 regarding non-sterile compounds and those recommendations have been incorporated into DHA’s compound policy. As additional recommendations or final determinations are released by the FDA, DHA will incorporate them into our policy.

Q13:

Will TRICARE beneficiaries be able to use non-network pharmacies to receive compound drugs?

A:

The normal TRICARE rules for non-network pharmacies will apply for compound drugs as for other drugs. Beneficiaries must pay up front and submit a claim to ESI for reimbursement. The claim will be subject to the same screening requirements as claims at a network pharmacy. Reimbursements are subject to deductibles or out-of-network cost shares, and copayments, which vary based on plan type and the sponsor’s status. >>Learn More

Q14:

What impact does ths screen have on compound drugs for children?

A:

The screen will apply to all claims for compound drugs, including pediatric compounds, to ensure they are safe, effective and medically necessary. Most traditional pediatric compounds contain ingredients known to be safe and effective, so they will pass the electronic screen with no delay to the beneficiary.                                

If a prescription does not pass the initial screen, the pharmacist can contact the prescribing provider to discuss substituting an approved ingredient, getting a different prescription, or submitting a prior authorization request.

Q15:

What was the previous process to screen compound drugs?

A:

Prior to May 1, 2015, Express Scripts screened all prescription claims, including compound drugs, for safety, efficacy and to the drug is covered by TRICARE. Compound drug claims were screened on the basis of their “primary ingredient”, which is identified by the pharmacist submitting the claim. Our process now screens all ingredients in a compound claim using the same criteria.

Q16:

Is the DHA responding to allegations of fraudulent practices by some compound drug companies?

A:

The DHA is actively investigating all cases of suspected fraud against the DoD related to compound drugs. We are collaborating with the appropriate federal and state law enforcement and licensing boards to pursue corrective action. DHA also initiated an audit of all compounding claims in the last 12 months to determine if recoupment is justified in cases where possible violations of state or federal law resulted in inappropriate reimbursement. 

We have received a many reports from TRICARE beneficiaries regarding unsolicited attempts to obtain their personal identifying information and health information by offering them topical compound medications. The DHA, TRICARE and its contractors will never call and ask for personal identifying information or health information.

If beneficiaries are contacted in this fashion, the DHA strongly advises them to share NO information, and please immediately submit a Fraud-Line report to our Pharmacy Benefits contractor, Express Scripts.  You can report the issue to Express Scripts (1-866-759-6139 or via email). Express Scripts can also flag your profile and reject attempts to bill for these medications. If you do receive unsolicited medication in the mail, you can refuse delivery. 

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