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Costly compounded drug prescriptions cut by certain formulary designs

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Certain formulary designs could cut prescriptions of costly compounded drugs.

Compounds, which usually are customized for patients, include topical creams and gels, injections, oral liquids, anesthetics, anticonvulsants, analgesic painkillers and muscle relaxants.

Texas' closed drug formulary requires preauthorization to prove medical necessity only when compounded medications contain “N drugs,” such as OxyContin. However, compounds made up entirely of “Y drugs” are treated as approved medications and don't require preauthorization.

“We saw an immediate decrease in 'N drug' compounds in Texas” when its closed formulary went into effect in 2011, said Brian Allen, Westerville, Ohio-based vice president of government affairs at pharmacy benefit manager Helios. “It was like a cliff – they just fell off. But what we have since seen is a commensurate spike in compounds that are all 'Y drugs.' ”

In Texas, 'Y drug' compounds are subject to retrospective review, which means “they're getting through the system and sometimes getting paid for before the retrospective review happens,” Mr. Allen said.

Oklahoma took a different approach when the Workers' Compensation Commission established a formulary for workers injured on and after Feb. 1, 2014.

Oklahoma's formulary, which is to expire in September, treats all compounds as 'N drugs, 'Mr. Allen said.

“That should have an impact because it empowers everyone to take a second look … and have a conversation about the efficacy and the cost of the medication,” he added. “So if (formularies) treat compounds like 'N drugs,' then it can have an impact. But if they do what Texas did and only allow for retrospective review, it won't be very effective.”