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Compounded Medications Prior Authorization Program Summary
Policy Number: PH-1004
All compounded claims must be submitted electronically. Paper claims for compounded products will not be accepted.
This program applies to Blue Partner and Commercial formularies
POLICY REVIEW CYCLE
Effective Date |
Date of Origin |
1/1/2024 |
|
FDA APPROVED INDICATIONS AND DOSAGE
See package insert for FDA prescribing information: https://dailymed.nlm.nih.gov/dailymed/index.cfm
CLINICAL RATIONALE
Clinical Rationale |
Pharmaceutical compounding is defined as the process by which a pharmacist or physician combines, mixes, or alters ingredients to create a medication tailored to an individual patient’s needs. The FDA recognizes pharmacists or physicians have traditionally engaged in extemporaneous drug compounding of reasonable quantities of drugs in response to and upon receipt of a valid prescription for an individually identified patient.(1-3) By definition, pharmacy compounding involves making a new drug for which safety and efficacy have not been demonstrated with the data the FDA requires to approve a new drug.(3) Mixing or reconstituting a commercially available product in accordance with the manufacturers FDA approved labeling typically does not constitute compounding a medication.(1,2) The Compounding Quality Act divides compounding under two laws. Compounding facilities may register under 503B to become a registered outsourcing facility. All other facilities are captured under 503A. A drug compounded under 503A must meet the following requirements:(1)
Drug manufacturers are required to meet good manufacturing practice (GMP) regulations, which are federal statues put in place to govern the production and testing of pharmaceutical materials. Compounded medications are exempt from these regulations and testing to assess product quality is inconsistent. Some pharmacies engage in activities that extend beyond the boundaries of traditional pharmacy compounding, such as large-scale production of compounded medications without individual patient prescriptions, compounding drugs that have not been approved for use in the US and creating copies of FDA-approved drugs. Compounding drugs in the absence of GMPs increases the potential for preparation errors. Published reports of independent testing by the FDA, state agencies, and others consistently show that compounded drugs fail to meet specifications at a considerably higher rate than FDA-approved drugs.(3) A 2018 report by the FDA noted that since 1990 the FDA had become aware of more than 55 product quality problems associated with compounded products, many of which resulted in recalls. In this survey 29 products made by 12 compounding pharmacies were collected and evaluated. Five different dosage forms (i.e. sterile injectables, ophthalmic products, pellet implants, inhalation products, and oral dosage forms) were sampled. Ten (34%) of the 29 evaluated compounds failed one or more standard quality tests performed. Nine of the ten products with failed results did so in potency. Potency analyses indicated sub-potent results ranging from 59 percent to 89 percent of expected potency (as indicated on the product’s label). None of the compounded products failed identity testing and of those subject to sterility testing (sterile injectables, pellet implants, and ophthalmic products) or microbial limits (inhalation product) no compounds failed. As a comparison, of the more than 3,000 drug products from commercial manufacturers that had been analyzed at the time of this study, less than 2 percent had a failure rate, though the sample size of this study was small.(2) For a compounded drug product to qualify for the exemptions under section 503A of the FD&C Act the product must be compounded by a licensed pharmacist or a licensed physician that does not compound regularly or in inordinate amounts any drug products that are essentially copies of a commercially available drug product. The FDA defines commercially available drug product as marketed drug products. Drug products are not considered commercially available if the drug product has been discontinued and is no longer marketed or if the drug product appears on the FDA drug shortage database as currently in shortage status.(4) The FDA defines essentially a copy as a compounded drug product that has the same active pharmaceutical ingredient(s) (API) and is identical or nearly identically as the commercially available drug product.(4,5) Additionally, the APIs have the same, similar, or an easily substitutable dosage strength, and the commercially available drug product can be used by the same route of administration as prescribed for the compounded drug unless the prescriber determines that there is a change, made for an identified individual patient, which produces, for that patient, a significant difference from the commercially available drug product.(4) |
Definitions |
Medical Necessity or Medically Necessary – services or supplies which are necessary to treat an illness, injury, or symptoms. To be medically necessary, services or supplies must be determined by Blue Cross and Blue Shield to be:
Drug compounding for the purpose of convenience is not considered medically necessary. Bulk chemicals/powders/products are not FDA approved entities which have established necessity and therefore do not meet the definition of medical necessity. Investigational – any treatment, procedure, facility, equipment, drugs, drug usage, or supplies that either Blue Cross and Blue Shield does not recognize as having scientifically established medical values or does not meet generally accepted standards of medical practice. Medical and Scientific Evidence – any one of the following:
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REFERENCES
Number |
Reference |
1 |
Pharmacy Compounding of Human Drug Products Under Section 503A of the Federal Food, Drug, and Cosmetic Act. August 2018. United States Food and Drug Administration. Available at: https://www.fda.gov/regulatory-information/search-fda-guidance-documents/pharmacy-compounding-human-drug-products-under-section-503a-federal-food-drug-and-cosmetic-act. |
2 |
Limited FDA Survey of Compounded Drug Products. 2018. United States Food and Drug Administration. Available at: http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm155725.htm. |
3 |
Gudeman J, Jozwiakowski M et al. Potential Risks of Pharmacy Compounding. Drugs R D 2013;13(1)1-8. |
4 |
Compounded Drug Products That Are Essentially Copies of a Commercially Available Drug Product Under Section 503A of the Federal Food, Drug, and Cosmetic Act. 2018. United States Food and Drug Administration. |
5 |
Compounded Drug Products That Are Essentially Copies of Approved Drug Products Under Section 503B of the Federal Food, Drug, and Cosmetic Act. January 2018. United States Food and Drug Administration. |
PRIOR AUTHORIZATION CLINICAL CRITERIA FOR APPROVAL
Module |
Clinical Criteria for Approval |
|
Compounded Medications will be approved when BOTH of the following are met:
Note: Drug compounding for the purpose of convenience or preference is not considered medically necessary. If the compound contains more than one ingredient listed above, ALL criteria must be met for each individual ingredient in the compound. If any component does not meet the criteria, the entire compound will not be covered. Compendia Allowed: AHFS, DrugDex 1 or 2a level of evidence, or NCCN 1 or 2a recommended use Length of Approval: 6 months
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This pharmacy policy is not an authorization, certification, explanation of benefits or a contract. Eligibility and benefits are determined on a case-by-case basis according to the terms of the member’s plan in effect as of the date services are rendered. All pharmacy policies are based on (i) information in FDA approved package inserts (and black box warning, alerts, or other information disseminated by the FDA as applicable); (ii) research of current medical and pharmacy literature; and/or (iii) review of common medical practices in the treatment and diagnosis of disease as of the date hereof. Physicians and other providers are solely responsible for all aspects of medical care and treatment, including the type, quality, and levels of care and treatment.
The purpose of Blue Cross and Blue Shield of Alabama’s pharmacy policies are to provide a guide to coverage. Pharmacy policies are not intended to dictate to physicians how to practice medicine. Physicians should exercise their medical judgment in providing the care they feel is most appropriate for their patients.
Neither this policy, nor the successful adjudication of a pharmacy claim, is guarantee of payment.
BCBSAL _ Commercial _ CS _ Compounded Medications _PA _ProgSum_ 1/1/2024