Insurance Company Drug Managers Now Deciding What’s Medically “Necessary”

Compounded medications aren’t being covered—which means FDA-approved drugs will own the marketplace. Action Alert!
Pharmacy benefit managers, or PBMs, are companies that process prescriptions for insurance companies and corporations, and use their size to negotiate low prices with drug makers and pharmacies. They act as an intermediary between the payor and everyone else in the healthcare system.
One major PBM, Express Scripts, is dramatically decreasing its coverage for some bulk ingredients of compounded drugs. They’re citing high prices, and arguing that “by and large, compounded medications do not provide any additional clinical value over what is currently available.” The company will block coverage for approximately 1,000 active ingredients.
Three other PBMs—Optum Rx (part of the insurance company United Health Group), CVS Caremark, and Catamaran—have placed restrictions on compounded drug ingredients. Harvard Pilgrim Health Care, the largest insurer in New England, ended coverage for compounded drugs altogether except for children and medically necessary drugs for adults.
Note the language these PBMs are using: “They don’t provide any additional clinical value.” “Only medically necessary drugs.” Why in the world are insurers—or worse, their drug purchasing managers—determining what is “medically necessary” rather than one’s personal physician? Pharmaceutical companies and insurance companies are negotiating prices and profits between themselves, without a single thought to the best interests of patients. And, as we have noted before, attacking compounded medications gives more of a monopoly to FDA-approved drugs.
Recently enacted legislation already restricts access to compounded drugs—though everything will hinge on what finally ends up on the “FDA-approved” list—and the new limits on interstate commerce for traditional pharmacies have already driven up compounding costs. With access to compounded medication being restricted by government regulation, and with insurance company PBMs cutting coverage, demand for compounded bulk ingredients will naturally decrease and prices will almost certainly rise further. This greatly threatens the existence of the small compounding pharmacies for whom we advocate.
A new coalition of patients, patient advocacy groups, pharmacists, physicians, pharmacies, and healthcare organizations has arisen to fight these changes. Patients and Physicians for Rx Access is seeking to raise awareness about access to compounded medications. They explain just how important compounding is to American healthcare—and how safe the medications really are.
Action Alert! Write to the pharmacy benefit managers Express Scripts, Optum Rx, CVS Caremark, and Catamaran. Tell them to preserve coverage for compounded medications. Explain that they have no authority to override a doctor’s healthcare directive with their own assessment of what is “medically necessary.” Show them how important compounding is to families like yours. Please take action immediately!