Two advisory committees to the Defense Health Agency are at odds over whether Tricare should reimburse for compounded medications.

The Defense Department Pharmacy and Therapeutics Committee in December recommended strict guidelines on compounded medication prescriptions — rules that would allow Tricare to reimburse for the medicines even through its own regulations don't require the defense health system to do so.

The P&T Committee agreed on a plan that would approve coverage if the person who prescribed the medicine provided information on whether the patient had tried already available products, the duration of the therapy and its purpose.

Active ingredients in the prescriptions would have to be an FDA-approved drug and approved by the FDA for the specific use needed, according to the requirements, and the patient must need the special formulation because he or she can't use a commercially available product.

But the Defense Department Beneficiary Advisory Board on Jan. 8 elected not to accept the committee's recommendation, leaving the decision on these costly medicines to Defense Health Agency officials.

Compounded medications are prescriptions formulated by pharmacists that usually combine an FDA-approved pharmaceutical with bulk ingredients — powders, creams or liquids — designed to meet an individual patient's needs, either by altering a dosage, eliminating an allergen or changing the medication's delivery method.

In 2013, DoD filled 465,000 prescriptions for compounded medications, a tiny fraction — about one-third of 1 percent — of all prescriptions covered by Tricare for the year, according to a 2014 Government Accountability Office report.

The cost for the medicines in 2013 totaled $259 million. But in 2014, that more than tripled to $746 million. An the first month of 2015, DoD spent $6 million a day on these medicines, on track to total $180 million in January alone, according to data provided by the Defense Department.

According to the GAO, the benefit is used largely by retirees and their family members, who filled more than 85 percent of all Tricare compounded prescriptions in 2013.

GAO said defense officials could realize significant cost savings on the medications if it followed its own regulations, which dictate that Tricare reimburse only for medications that include FDA-approved ingredients. Tricare's coverage policies for the medications are similar to Medicare's but more generous than the Veterans Affairs Department health system, according to GAO.

Tricare announced in July 2013 that it had begun adhering to its own regulations and would stop covering any compounded prescriptions containing ingredients not approved by the FDA.

Tricare officials said they made the decision out of concern for patient safety — in 2012, 64 people died after receiving contaminated steroid injections compounded at a facility in Massachusetts — as well as the legal restrictions that keep the military health system from paying for prescriptions containing unapproved ingredients.

But the decision caused an uproar among Tricare beneficiaries who use compounded medications, prompting Congress to order a GAO analysis.

GAO recommended that DoD "align Tricare's payment practices for compounded drugs with applicable regulations governing the Tricare program."

Jay McEniry, executive director of Patients and Physicians for Rx Access, said the P&T committee's requirements would force compounding pharmacists to use ingredients that are less pure, since the FDA approves only finished products, which contain numerous ingredients, rather than the pure active pharmaceutical agent.

He also said if DoD wants to rein in spending, rather than stop paying for the medications, it should reimburse at rates similar to those used by commercial insurers.

A majority of the top 25 most expensive compounded prescriptions issued Tricare beneficiaries in 2013 were topical pain medications.

McEniry said the medicines offer an alternative to addictive and sometimes dangerous opioids and he expressed hope that DoD would develop policies that would allow physicians the option to continue prescribing compounded alternatives to pain pills.

"This is first time I've seen such a reaction in health care — let's just cut [the benefit]. Let's not cut it. A lot of people need compounds. They have no other options, no other medications they can tolerate. It's interesting we are having this discussion. It's a disservice to a lot of people who need it and deserve it," McEniry said.

About Patricia Kime

Patricia Kime is a senior writer covering military and veterans health care, medicine and personnel issues.

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