Evolution of the Military Health System compounded drugs utilization and management

Abstract

Over the past decade, the TRICARE pharmacy benefit has undergone significant changes, particularly in the management and utilization of compound drugs. Compound drugs are customized formulations that combine 2 or more pharmaceutical ingredients to meet specific patient needs and can offer therapeutic alternatives when standard US Food and Drug Administration-approved medications are ineffective. However, concerns regarding the safety, clinical effectiveness, and rising costs have necessitated increased oversight. Between 2013 and 2015, TRICARE experienced a drastic surge in compound drug expenditures, escalating from 4% of total pharmacy outpatient drug costs to 13% (more than $1.6 billion), despite representing only 0.4% of total outpatient prescription volume. This rapid increase highlighted the need for stricter controls to manage spending and ensure appropriate utilization. In response, the Defense Health Agency implemented a compound drug screening process in 2015, applying utilization management tools such as quantity limits, prior authorization, and step therapy. These measures aim to balance cost containment with maintaining access to clinically necessary compounded medications. This article provides a comprehensive review of the evolution of compound drugs within the TRICARE pharmacy benefit, examining safety concerns, spending trends, and management strategies.

FIGURE 1

TRICARE Spend (in Millions) on Compounds (Fiscal Year)

FIGURE 2

Percentage of Compound Prescriptions to All TRICARE Prescriptions (Calendar Year)