Compounded medicine and insurance

Oh, crap. There’s a quiz today. Answer key below.

This slideshow requires JavaScript.

Pharmacy benefits managers. Commonly called PBMs.

They sound like such nice people, right? They manage your benefits to shepherd you to optimal health. They do their very best to save you money and improve the quality of your care. Through drugs.

No matter how effed-up your condition. Or despite what your OWN doctor (who by the way, spent about a decade in med school) thinks you need to help you.

My particular PBM, (until recently) has been Tricare; its pharmaceutical division operates under the name of Express Scripts. (The same company bought another PBM, Medco, in 2011 (which I also had), and rolled it into the Express Scripts brand.)

If you have/had one of these companies, they’ll send you a nice letter after you’ve filled a prescription three times at a local, possibly family-owned, pharmacy, informing you that unless you fill your script with their own mail-order service, they will no longer be able to offer the drug at the same spectacularly low price. That’s rather odd, since someone else has been doing all the work for them up until then. They are an insurance company, right?

Nope. Tricare is the biggest pharmacy in the US, with in excess of 50 million customers. Express Scripts (and Tricare) are in the top 100 of the Fortune 500 companies, as ranked by gross revenue. The CEO of Tricare since 2006, George Paltz, in 2013 had a total compensation of 13.04 million. He has repeatedly been in the top 10 list of highest-paid CEOs of US companies, ranking 5th in 2011 and 6th in 2012.

This plummet apparently means something. Tricare claims they are losing money.

Losing money, in part, to the proliferation of overpriced drugs. And those greedy local pharmacists who, um, used to dispense or make everything you took. In Tricare’s opinion, these highly-trained professionals should only be around to fill the occasional “emergency” prescription, not for example, the blood-pressure meds you need every day of the year.

Palz is also on another, more exclusive list, that of the nine CEOS with the worst reputations in 2014. The employees of Tricare have a 29% confidence rate in thier own leader.

Here’s another quiz question. What type of drug can’t a PBM force you to purchase from them?

Answer: A custom drug, drawn up by your physician in an unusual quantity or combination.

In other words, a compounded drug.

So, in October 2015, I was contacted by my compounding pharmacy to say that the compounds I take to mediate my MS symptoms were no longer covered by Express Scripts. If I wanted the medicine I had to pay out of pocket.Express Scripts, relying on the dubious conclusions of the Compounding Quality Act of 2013, designed to make SOME compounded medicines safer, has rather decided to deny coverage on ALL compounded medicines, ostensibly, to protect my health–in fact, to limit my healthcare options.

The compounding pharmacies affected by this blanket ruling trumped up by the FDA are trying to fight back, and Express Scripts, have published a list of 1000 “forbidden” compounds. I can’t find that list anywhere.

I went to their Tricare’s website to check it out.

By Tricare’s own definition a compound is:

  • A combination of two or more drugs

  • Prepared by a pharmacist

  • For a patient’s individual needs

Dreadful! Based on those three dire criteria, no WONDER they need to do everything they can to prevent you from getting them.

After a compounded prescription has been submitted, the ingredients are screened to determine if:

  • TRICARE covers it

  • It’s safe and effective

  • It doesn’t exceed the cost standard

(The compounds I take are all single-ingredient  BTW– biotin, a common B vitamin at a very high dose, and Naltrexone, in a low dose form, about 1/10th of the standard dose. They have Naltrexone in the standard dose of 50 mg — biotin, they say, is an OTC-only vitamin.)

Here’s my interpretation of the above bullets:

  • We don’t want to get into the boutique drug business — tough if you need something hand-made. We don’t know how to put a price tag on that
  • We’d rather pick it off a warehouse shelf
  • You need to take what everyone else does, or we can’t buy the same drugs by the shitload
  • We already bought it by the shitload
  • ditto
  • We want to pretend it’s much more expensive than it is — hey we’re buying less varieties of meds, but by the shitload!

As the goops at Tricare/ Medco had no problem covering the disease modifying drug I previously took at (they said) $1700/ month ($10 co-pay back then), drugs whose efficacy for MS have been questioned in one widely cited study, and the soaring costs of which, compared to effectiveness in treating the disease, have been questioned, I  wonder about the logic of their arguments.

However, there’s another side to this story.

Tricare has frequently questioned about their own dispensing practices. Many times. By important entities.

The most publicized case is the indictment by the New York State Attorney General on fraud charges, for withholding tens of millions of dollars in rebates owed to the state. In the same suit, the Attorney General’s office said that Express scripts “overstated the cost benefits of switching to certain preferred medications.” In the end, Express Scripts reimbursed over 28 states to resolve claims of deceptive business practice. Although the states got millions, patients who were defrauded were reimbursed can be counted in the hundreds of thousands – although the company provides prescriptions to approximately 50 million customers.

Here is a link to the actual court order.

The Wall Street Journal writes about the NY case in an excellent summary. Since the article is behind a paywall, I’ll give you a quote:

But while PBMs present themselves as companies that drive down the cost of drugs, critics — and some lawsuits — claim the companies put their own interests ahead of their clients, resulting in higher prescription prices. The PBM industry is vigorously fighting multiple state proposals that would force them to disclose information about their deals with drug manufacturers and that would force PBMs to accept the role of fiduciary to clients.

The Pennsylvania Attorney General also sued Express Scripts on charges of “deceptive business practice, and reached a “multi-state” settlement against Express Scripts.

A summary of these and other lawsuits can be found here. Fraud, inflated prices, and intentional overcharges are common themes.

In the previously cited article, there is an interesting section on industry insiders who became whistle-blowers because of the egregious extent of the bad practices among PBMs.

One such person is Darcy Dinielli, who was a senior finance manager for Express Scripts. She noticed consistent and apparently intentional coding errors–PARTICULARLY among patients receiving COMPOUNDED drugs.

The few patients who noticed and complained about the over-pricing on their compounds were reimbursed. However the errors were not corrected, and other patients continue to pay the incorrect price for mis-coded medicines.

Dinielli, who was terminated several months later, claims that the company’s alleged fraudulent activity not only prevented other clients from becoming aware of the coding error and receiving reimbursements for their overpayments, but that it also portrayed an inaccurate picture of its financial performance to the company’s shareholders.

“By not reflecting these reimbursements in the company’s historical financial data, Express Scripts sought to avoid drawing the attention of auditors and essentially misrepresented information to both its clients and its shareholders,” the complaint states.

While this blog post is about compounded medicines and my experience with them, I should also mention that there is a similar battle taking place between Tricare and physicians over the prescribing of brand-name drugs, in the case that Express Scripts would prefer that you take the generic form. (By “prefer,” they mean, “if you want the brand-name, pay for it yourself.”)

The good news?

Because of numerous complaints by people at my workplace (about 15K FTEs) about the practices and policies of Express Scripts, my employer has severed their relationship with this “provider.”

The new pharmacy plan covers compounded drugs. Or so says their literature. I’ll find out later this month.

OK, I’ve tested your patience long enough.

Here are the answers to the quiz questions above.

  1. The two pills are both  4.5 mg of Low Dose Naltrexone. According to Express Scripts, the one on the left actually cost $1.96 ($58.94 for 30 pills, a month’s supply). Thanks to their generous coverage, my co-pay made the one on the right cost $0.83 (a co-pay of $25.00 for 30 pills)

  2. The two pills are both 100 mg of pure biotin. According to Express Scripts, the actual cost of the one on the left was $15.68 per capsule ($1411.49 for 90 pills, taken 3 per day, a month’s supply). Thanks to their REALLY generous coverage my payment per capsule was $0.03. (a co-pay of $25.00 for 90 pills)

  3. Now that I’m paying the full out-of pocket price for both drugs, the pair on the left that Express Scripts claimed cost a real total of $1470.43 per month, is identical to the pair on the right for which I now actually pay the pharmacy’s retail price of $318 per month


I have to say that even the difference of $50/month to $318/month is pretty painful after the loss of coverage, (more on that in another post) but according to Express Scripts the real price difference would actually have been, annually, $600 ($50 x 12) with coverage, compared to $17,645.16 ($1470.43 x 12) without.


The compounding pharmacy –which is buying the LDN and the biotin, compounding them to the correct dose and putting them in itty-bitty size 0 capsules, (and certainly charging a profit) says the annual retail cost of these two compounds is $318 x 12 =$3,804.

In fact, Express Scripts seems be be off on their sums by about $13,841.

(I find the fact that Tricare’s extraordinary prices always include some odd number of cents ridiculous, so I’ll omit them here. No I won’t. You can see for yourself it’s sixteen cents from the above figures.)

I can’t imagine why anyone might want to sue them.

I think, instead, they should offer them a shitload of calculators. All the same brand, color and size. Preferably intended for a market that uses non-Western characters for numbers. It could only improve on their math.

Update: Found a way around paying $270/month for biotin.


One thought on “Compounded medicine and insurance

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s