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Pharmacy Faculty


Background: Although compounding has a long-standing tradition in clinical practice, insurers and pharmacy benefit managers have instituted policies to decrease claims for compounded medications, citing questions about their safety, efficacy, high costs, and lack of Food and Drug Administration (FDA) approval. There are no reliable published data on the extent of compounding by community pharmacists nor the fraction of patients who use compounded medications. Prior research suggests that compounded medications represent a relatively small proportion of prescription medications, but these surveys were limited by small sample sizes, subjective data collection methods, and low response rates.

Objective: To determine the number of claims for compounded medications, on a per user per year (PUPY) basis, and the average ingredient cost of these claims among commercially insured patients in the United States (US) for 2012 and 2013.

Methods: This study used prescription claims data from a nationally representative sample of commercially insured members whose pharmacy benefits were managed by a large pharmacy benefit management company. A retrospective claims analysis was conducted from January 1, 2012 through December 31, 2013. Annualized prevalence, cost, and utilization estimates were drawn from the data. All prescription claims were adjusted to 30-day equivalents. Data mining techniques (association rule mining) were employed in order to identify the most commonly combined ingredients in compounded medications.

Results: The prevalence of compound users was 1.1% (245,285) of eligible members in 2012 and 1.4% (323,501) in 2013, an increase of 27.3%. Approximately 66% of compound users were female and the average age of a compound user was approximately 42 years throughout the study period. The geographic distribution of compound user prevalence was consistent across the US. Compound users’ prescription claims increased 36.6%, from approximately 7.1 million to approximately 9.7 million prescriptions from 2012 to 2013. The number of claims for compounded medications increased by 34.2% from 486,886 to 653,360 during the same period. PUPY utilization remained unchanged at 2 prescriptions per year from 2012 to 2013. The most commonly compounded drugs were similar for all adult age groups, and represented therapies typically indicated for chronic pain or hormone replacement therapy. The average ingredient cost for compounded medications increased by 130.3% from $308.49 to $710.36 from 2012 to 2013. The average ingredient cost for these users’ non-compounded prescriptions increased only 7.7%, from $148.75 to $160.20. For comparison, the average ingredient cost for all prescription users’ claims was $81.50 in 2012, and increased by 3.8% to $84.57 in 2013.

Conclusions: Compound users represented 1.4% of eligible members in 2013. The average ingredient cost for compound users’ compounded prescriptions ($710.36) was greater than for non-compounded prescriptions ($160.20). The one-year increase in average compounded prescription costs (130.3%) was also greater than for non-compounded prescriptions (7.7%). Although prevalence of compound users and the PUPY utilization for compounded prescriptions increased only slightly between 2012 and 2013, the mean and median cost of compounded medications increased dramatically during this time. Text mining revealed that drug combinations characteristic of topical pain formulations were among the most frequently compounded medications for adults.


This is the Accepted Manuscript version of an article published in the Journal of Managed Care & Specialty Pharmacy, 2016 Feb;22(2):172-181. The final version is available online at