Compounding Pharmacy Policy Briefing

September 2016

Texas Compounding Policy Initiatives
The Texas State Board of Pharmacy (TSBP) is under Sunset Review, meaning the entire Pharmacy Practice Act, including compounding provisions could be subject to additional legislative review. The initial Sunset Commission recommendations did not mention compounding; however, technical definition
"tweaks" of compounding are anticipated.

In July 2016, the Texas State Board of Pharmacy (TSBP) adopted rules under 22 TAC §281.8, concerning Grounds for Discipline for a Pharmacy License, to include waiving, discounting, reducing a patient copayment or deductible for a compounded drug as outlined in SB 460 by Sen. Schwertner (2015). The Alliance weighed-in on the rules, with concerns that authorizing the pharmacist to determine financial hardship without additional guidance will lead to inconsistent application of discounted copays. The Alliance suggested additional guidance be included for documenting "legitimate" financial hardship.

The new law and rules also give TSBP additional authority in inspecting financial arrangements of a pharmacy to identify pharmacies with financial ties to physicians writing prescriptions for those pharmacies.

Texas Legislature, TDI Division of Workers' Compensation and the House Business and Commerce Committee
In 2015, the Texas Division of Workers' Compensation (DWC) initiated a data call and earlier this year, adopted an audit rule to review the medical necessity and utilization patterns of compounded medications in the Texas system.

Meanwhile, a House interim committee hearing on utilization trends discussed dramatic increases in cost for compounding prescriptions to the Texas Workers' Compensation system (DWC). The Committee heard testimony from workers' compensation PBMs recommending prior authorization and other utilization management processes on all compounded prescriptions for both "Y" and "N" drugs as a means of controlling utilization.

Helios, an Optum company states the following;
"Recent data points to an all too familiar claim where compounded medications with six or more ingredients are being billed at several thousand dollars for a month's supply. Numerous stakeholders in Texas have approached the DWC expressing concerns about the disturbing pattern of high cost compounds and have sought further clarification from the DWC on how compounded medications could be processed with alternate controls (Prior Authorization). The DWC took action by initiating a data call last year and adopted an audit rule in 2016 to review the medical necessity and utilization patterns of compounds in the Texas system." Optum/Helios. Read More

Recent denials from workers' compensation PBMs have been challenged in state administrative hearings where PBMs have prevailed in one case, arguing that despite "Y" list ingredients in compounds, the combination of "Y" list ingredients is not considered an FDA approved drug.

Federal Compounding Initiatives

Federal Drug Administration 
Just days after the most recent FDA Guidance on Enforcements documents were released, April 15, 2016, limiting office use compounds to patient specific prescriptions, the House Committee on Appropriations released a draft report criticizing the FDA's hardline stance.   "The committee reminds the FDA that compounding pharmacies are not drug manufacturers, but rather are state licensed and regulated health care providers that are inspected by state boards of pharmacy pursuant to state laws and regulations that establish sterility and other standards for the pharmacies operating within their states," the committee's report read.

Meanwhile, Drug Quality and Security Act (DQSA 2013) stakeholders, including IAPC and NCPA have responded to numerous FDA enforcement actions, including;

  • Compounding "office-use" medication for administration to or treatment of a patient in a prescriber's practice shall be subject to the exemptions provided for within 503A in those states where permitted within state law, regulation, or rule. 
  • Inspection of a traditional compounders by the FDA shall be conducted using the standards established in USP 795 and USP 797, not CGMPs adopted for outsourcing facilities. 
  • Use of an Active Pharmaceutical Ingredient (API) to achieve the desired therapeutic results shall be the sole responsibility of the compounder.

Last week, seven national pharmacy organizations, including; NCPA, APhA, ASCP, CPNP, IACP, NASPA and NACDS, sent letters to all state boards of pharmacy requesting a five-year delay in enforcement of USP General Chapter 800 until July 1, 2021 (the official implementation date is July 1, 2018). USP General Chapter 800, Hazardous Drugs--Handling in Healthcare Settings will apply to all healthcare personnel who handle hazardous drug preparations.  This grace period allows state-licensed practitioners to assess and plan for the significant operational and structural changes needed as well as budget, and obtain the necessary resources in an already strained financial environment.

More about USP 800, FAQs
In September, USP posted updated FAQ's regarding General Chapter 800, Hazardous Drugs--Handling in Healthcare Settings.  The responses are provided for clarity and are not to be relied on to demonstrate compliance with USP standards or requirements. Please click here for the FAQ's:

The Alliance will continue to review compounding pharmacy policy at the state and federal level and report in our mid-month policy briefing. Our policy initiatives are developed by Alliance Compounding Pharmacy Advisory Committee. The Advisory Committee meets monthly and advises the Board of Directors on compounding initiatives.
Members include:

  • Chair Rene Garza, Pharm.D
  • Bruce McAnally, R.Ph.
  • Kelly Selby, R.Ph.
  • Ken Hughes, R.Ph.
  • Andy Komuves, R.Ph.

We appreciate their commitment, time and support.

Click here for our public policy blog on compounding, on our website and sent to members of the legislature, legislative staff and the Texas State Board of Pharmacy.