A report released in May by the Texas Department of Insurance – Division of Workers’ Compensation shows that while the number of compounded drug prescriptions in the workers’ comp system grew between 2010 and 2014, there was a steady decrease in prescription numbers between 2014 and 2016.
According to TDI’s Workers’ Compensation Research and Evaluation Group’s report, “Baseline Evaluation of the Utilization and Cost Patterns of Compounded Drugs,” compound drug prescriptions in 2010 totaled 18,020, representing 1.6 percent of total pharmacy prescriptions. By 2014 the number had risen to 26,380, or 3.2 percent of total prescriptions. While the number decreased to 20,751 in 2016, the share of the total pharmacy prescriptions remained at 3.2 percent.
In the compounding process, a pharmacist or physician combines, mixes or alters ingredients to meet specific needs of a patient, as an alternative to commercially available manufactured drugs” the report states. Providers in Texas are required to follow the recommendations of the Official Disability Guidelines (ODG).
The report identifies a prescription 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.”
The total cost of compounded drugs was $6 million in 2010, or 4 percent of the total workers’ compensation system pharmacy cost of $152 million. Compounded drug costs increased to $12 million in 2014, representing 12.5 percent of the total pharmacy cost of $112 million. In 2016, the cost for compounded drugs decreased to $11 million, or 11 percent of the $98 million pharmacy total.
In 2010, the average cost of compounded drug prescription was $356 in 2010. That amount had increased by 133 percent to $829 by 2016.
In 2016, 3,048 workers’ comp claims involved one or more compounded drugs, representing 2.5 percent of the total pharmacy claims. From 2010 through 2016, the per-claim cost of compounded drugs increased by 198 percent from $1,993 to $5,936, respectively. The number of prescriptions per claim has increased slightly since 2013.
Back injury claims are the most common type of claims in which compounded drugs are prescribed.
The authors used pharmacy billing data collected by the Division of Workers’ Compensation in compiling the report.