Category:  Pharmacology/Administrative                             Policy Grade: B

 

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Latest Review Date:  December 2018

 

Description of Procedure or Service:

This policy applies to Physician Administered Compounded Medications only.

 

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.

 

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. Mixing or reconstituting a commercially available product in accordance with the manufacturers FDA approved labeling typically does not constitute compounding a medication.

 

Over the past 10 years it has been noted there has been an increase in the emergence of firms with pharmacy licenses making and distributing drugs outside of what would be considered traditional pharmacy compounding. This has become a great concern to the FDA; the practices align more closely with drug manufacturers than with traditional pharmacies. 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. Today compounding pharmacies do not have to meet these regulations.

 

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 list as “currently in shortage” status.

 

Additionally the FDA defines “essentially a copy” as a compound drug product that has the same active pharmaceutical ingredients (API) as the commercially available drug product, 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.

 

Note: Mixing or reconstituting a medication which follows the manufacturer’s FDA approved labeling is typically not considered compounding.

 

 

Policy:

Physician Administered Compounded Medications may be considered medically necessary when all of the following are met:

 

• The product contains at least one prescription ingredient; AND
• All prescription ingredients are FDA approved for medical use in the United States; AND
• The compounded medication is not essentially a copy of a commercially available FDA-approved drug product; AND
• The compounded medication is not for the purpose of convenience or preference; AND
• ALL prescription ingredients in the compounded product are being used for ONE of the following:
  • An FDA approved indication (including the final route of administration) for each prescription ingredient in the compound; or
  • An indication and route of administration supported by appropriate clinical documentation submitted by the prescriber (e.g., MicroMedex, NCCN, peer-reviewed studies published in a nationally recognized medical journal)

 

Physician Administered Compounded medications is considered not medically necessary when the compound contains ingredients, which include but are not limited to any of the following**(see list below):

• those with potential safety risks; OR 
• bulk chemicals/powders/products not FDA approved; OR
• controlled substance pain medications and non-covered drug classes (e.g. anorexiants, impotence)or products

 

NOTE: 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.

 

**This is not an all inclusive list.

Generic Name	GPI
ALL BULK CHEMICALS/POWDERS/PRODUCTS with a 3rd party restriction code of B	N/A
ALFENTANIL	6510001500****
ALPROSTADIL	9950001000****
ALPROSTADIL (BULK)	9630100700****
ANOREXIANTS NON-AMPHETAMINE	6120**********
ANTICOAGULANTS	83************
ANTI-OBESITY AGENTS	6125**********
ANTITUSSIVE - OPIOID	431010********
BUPRENORPHINE	6520001020****
BUPRENORPHINE AND NALOXONE	652000101007**
CODEINE PHOSPHATE	6510002010****
CODEINE PHOSPHATE POWD	651000201029**
CODEINE SULFATE	6510002020****
DOMPERIDONE (BULK)	9648704000****
FENTANYL	6510002500****
FENTANYL CITRATE	6510002510****
FENTANYL CITRATE-SODIUM CHLORIDE	6510002512****
HEPARIN SODIUM (PORCINE) (BULK)	9656504820****
HYDROCODONE BITARTRATE (ANTITUSSIVE) POWD	431010051029**
HYDROCODONE BITARTRATE CRYSTALS	43101005103800
HYDROCODONE W/ HOMATROPINE SYRP	431010100012**
HYDROMORPHONE HCL	6510003510****
HYDROMORPHONE HCL POWD	651000351029**
HYDROMORPHONE HCL-SODIUM CHLORIDE	6510003512****
IMPOTENCE AGENTS**	4030**********
KETAMINE HCL (BULK) POWDER	96625003392900
LEVORPHANOL TARTRATE	6510004010****
MEPERIDINE HCL	6510004510****
MEPERIDINE HCL POWD	651000451029**
MEPERIDINE HCL SYRP	651000451012**
MEPERIDINE HCL-SODIUM CHLORIDE	6510004512****
METHADONE HCL	6510005010****
METHADONE HCL POWD	651000501029**
MORPHINE SULFATE	6510005510****
MORPHINE SULFATE BEADS	6510005520****
MORPHINE SULFATE FOR CONTINUOUS MICROINFUSION	6510005530****
MORPHINE SULFATE IN DEXTROSE	6510005511****
MORPHINE SULFATE LIPOSOME	6510005540****
MORPHINE SULFATE POWD	651000551029**
MORPHINE SULFATE-SODIUM CHLORIDE	6510005515****
OPIOID COMBINATIONS	6599**********
OPIOID PARTIAL AGONISTS	6520**********
OXYCODONE HCL	6510007510****
OXYCODONE HCL POWD	651000751029**
OXYMORPHONE HCL	6510008010****
PHENTERMINE HCL (BULK)	9672561647****
PROPOXYPHENE NAPSYLATE	6510008520****
REMIFENTANIL HCL	6510008710****
SUFENTANIL CITRATE	6510009010****
TRAMADOL HCL	6510009510****

 

 

Key Points:

A 2009 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 the 2009 report the results of a survey conducted from June to December 2001 were discussed. In this survey 29 products made by 12 compounding pharmacies were collected and evaluated. 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.

 

After the initial 2001 FDA survey an additional survey was conducted in 2006 by the FDA. The FDA collected 125 active pharmaceutical ingredients (APIs) and 73 finished compounded drug product samples in three major drug classes (female hormone products, inhalation products, and local anesthetic products) during unannounced visits to compounding pharmacies throughout the country. All 125 API samples passed analysis for identity of active drug substance and assay for the amount of active drug substance. This finding suggests that any subsequent failures of the compounded finished drugs were related to compounding processes within the pharmacies. Of the 73 finished compound samples only 36 were able to be evaluated (16 samples had expired by analysis time, 21 were deemed unusable for reasons such as problems with the analytical process or expiration during the analysis period). Of the 36 usable compound samples 12 (33%) failed analytical testing using rigorously defensible testing methodologies. Failed samples passed identity testing but failed assay and, in some cases, content uniformity testing (specific to compounded capsule dosage forms). Potency ranged from 67.5% to 268.4% of the drug indicated on the product labeling.

 

Not only is incorrect or mislabeled potency a concern, but contamination, as microbial contamination or the presence of chemical impurities, of compounded finished drug products has also been observed.

 

There is an important health concern in improperly compounded products. In 2003 on a nationwide basis 1% of all prescriptions, totaling approximately 30 million, were estimated to be compounded. From 1990 to 2005 the FDA learned of at least 240 serious illnesses and deaths associated with improperly compounded products. Because pharmacists are not required to report adverse events there may be additional unreported events.

 

 

There are also reports in the literature of serious injuries caused by improperly compounded products. For instance, two cases of hospitalization of children occurred due to compounded preparations that were 10-fold and 87-fold superpotent. In another case, pharmacy mixing of a medicine too long before use, allowing chemical generation of a toxin was suggested to have a role in the death of a patient. These cases illustrate that the quality problems associated with compounded drug products can have serious and fatal consequences for patients.

 

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 to be:

 

• Appropriate and necessary for the symptoms, diagnosis, or treatment of the medical condition;
• Provided for the diagnosis or direct care and treatment of the medical condition;
• In accordance with standards of good medical practice accepted by the organized medical community;
• Not primarily for the convenience and/or comfort of the patient, the family, the physician, or another provider of services;
• Is not investigational;
• Performed in the least costly setting required by the medical condition.

 

Bulk chemicals/powders/products are not FDA approved entities 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 does not recognize as having scientifically established medical values or does not meet generally accepted standards of medical practice.

 

Medical and Scientific Evidence – any of the following:

 

• Peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff.
• Peer-reviewed literature, biomedical compendia, and other medical literature that meet the criteria of the National Institute of Health’s Nations Library of Medicine for indexing in index Medicus, Excerpta Medicus (EMBASE), Medline, or MEDLARS database Health Services Technology Assessment Research (STAR).
• Medical journals recognized by the Secretary of Health and Human Services, under Section 1861(t)(2) of the Social Security Act (42 U.S.C. 1395x).
• The following standard reference compendia:

• The American Hospital Formulary Service Drug Information (AHFS-DI)
• MicroMedex’s DrugDex
• Clinical Pharmacology
• National Comprehensive Cancer Network (NCCN) Drug & Biological Compendia.

• Findings, studies, or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes including the:

• Agency for Healthcare Research and Quality,
• National Institutes of Health,
• National Cancer Institute,
• National Academy of Sciences,
• Center for Medicare and Medicaid Services, and
• Any national board recognized by the National Institutes of Health for the purpose of evaluating the medical value of health services.

• Peer-reviewed abstracts for presentation at major medical association meetings.

 

Practice Guidelines and Position Statements

American Society of Health-System Pharmacists

The ASHP has extensive guidelines regarding compounding services. These guidelines are available at: www.ashp.org.

 

The Institute for Safe Medication Practices

In 2016, the ISMP revised the initial set of consensus guidelines for safe preparation of sterile compounds. The revisions were based on feedback received by an advisor panel and through public comment to address and emphasize ISMP’s support for the use of IV admixture technologies. A complete listing of guidelines regarding compounded medicines is available at: //www.ismp.org/Tools/guidelines/sterile-compounding

 

The recommendations contained within the safe practice guidelines focus on the following processes:

• Policies and procedures for compounding sterile preparations
• Order entry and verification
• Drug inventory storage
• Assembling products and supplies for preparation
• Compounding
• Drug conservation
• Compounding performed outside the pharmacy IV admixture service
• Preparation of source/bulk containers
• Technology/automation used for compounding sterile products
• Automated compounding (pumping) systems
• Quality control/final verification
• Product labeling
• Staff management

 

 

U.S. Preventive Services Task Force

Not applicable

 

 

 

Key Words:

Compounding medication, pharmacy compounding, pharmaceutical compounding

 

Approved by Governing Bodies:

Not applicable

 

 

Benefit Application:

Coverage is subject to member’s specific benefits.  Group specific policy will supersede this policy when applicable.

ITS: Home Policy provisions apply.

FEP: Special benefit consideration may apply. Refer to member’s benefit plan. FEP does not consider investigational if FDA approved and will be reviewed for medical necessity.

 

 

Current Coding:

CPT Codes:

J7999              Compounded drug, not otherwise classified. (Effective 01/01/2016)

 

 

References:

1. Allen L. The Art, Science, and Technology of Pharmaceutical Compounding: Guidelines for Compounding Practices. //www.pharmacist.com/sites/default/files/files/Allen_%20Chap_%201_Art,%20Science%20and%20Technology%20of%20Pharmaceutical%20Compounding,%204e.pdf.
2. American Society of Health-System Pharmacists. Guidelines on compounding sterile preparations. Available at: www.ashp.org/searchresults.aspx?cid=3&q=compound.
3. Federal Food and Drug Administration. 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.
4. Federal Food and Drug Administration. Pharmacy Compounding of Human Drug Products Under Section 503A of the Federal Food, Drug, and Cosmetic Act. 2014.
5. Food and Drug Administration. CFR—Code of Federal Regulations Title 21: Part 211 Current Good Manufacturing Practice for Finished Pharmaceuticals. 2012. //www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?CFRPart=211. Accessed May 2015.
6. Food and Drug Administration. Compounding and the FDA: questions and answers.  Available at: www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm339764.htm. Accessed February 12, 2016.
7. Food and Drug Administration.  Federal and state role in pharmacy compounding and reconstitution: Exploring the right mix to protect patients. Available at: www.fda.gov/NewsEvents/Testimony/ucm115010.htm. Accessed February 12, 2016.
8. Food and Drug Administration. Limited FDA Survey of Compounded Drug Products. 2001. //www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm155725.htm.
9. Food and Drug Administration. Pharmacy Compounding. 2006 Limited FDA Survey of Compounded Drug Products. 2012. //www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm204237.htm.
10. Food and Drug Administration. The special risks of pharmacy compounding. 2012. www.fda.gov/ForConsumers/ConsumerUpdates/ucm107836.htm.
11. Gudeman J, Jozwiakowski M et al. Potential Risks of Pharmacy Compounding Drugs R D 2013;13(1)1-8.
12. Institute for Safe Medication Practices. IV sterile compounding guidelines (2013). Available at: //www.ismp.org/Tools/guidelines/default.asp.
13. Mahaguna V, McDermott JM, Zhang F et al. Investigation of product quality between extemporaneously compounded progesterone vaginal suppositories and an approved progesterone vaginal gel. Drug Dev Ind Pharm. 2004; 30(10):1069-78.
14. Staes C, Jacobs J, Mayer J, Allen J. Description of outbreaks of healthcare associated infections related to compounding pharmacies, 2000-2012. Am J Health Syst Pharm. 2013 Aug 1; 70(15): 1301-1312.
15. United States Food and Drug Administration. The special risks of pharmacy compounding. 2012.
16. United States Food and Drug Administration. CFR—Code of Federal Regulations Title 21: Part 211 Current Good Manufacturing Practice for Finished Pharmaceuticals. 2012. Available at: www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?CFRPart=211.

 

 

Policy History:

Medical Policy Group, February 2016

Medical Policy Administration Committee, March 2016

Available for comment: Policy was previously posted by pharmacy for comment from May 15, 2015 through July 1, 2015.

Pharmacy Medical Policy review, April 2018. No change to policy statement.

Pharmacy Medical Policy review, December 2018, Updates to Description, Key Points, and References; no change to policy statement, added “essentially” to criteria regarding copy of a commercially available FDA-approved drug product.

 

                                                                                                                           

This medical 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 medical policies are based on (i) research of current medical literature and (ii) 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.

 

This policy is intended to be used for adjudication of claims (including pre-admission certification, pre-determinations, and pre-procedure review) in Blue Cross and Blue Shield’s administration of plan contracts.

The plan does not approve or deny procedures, services, testing, or equipment for our members. Our decisions concern coverage only. The decision of whether or not to have a certain test, treatment or procedure is one made between the physician and his/her patient. The plan administers benefits based on the member’s contract and corporate medical policies. Physicians should always exercise their best medical judgment in providing the care they feel is most appropriate for their patients. Needed care should not be delayed or refused because of a coverage determination.

As a general rule, benefits are payable under health plans only in cases of medical necessity and only if services or supplies are not investigational, provided the customer group contracts have such coverage.

The following Association Technology Evaluation Criteria must be met for a service/supply to be considered for coverage:

1. The technology must have final approval from the appropriate government regulatory bodies;

2. The scientific evidence must permit conclusions concerning the effect of the technology on health outcomes;

3. The technology must improve the net health outcome;

4. The technology must be as beneficial as any established alternatives;

5. The improvement must be attainable outside the investigational setting.

 

Medical Necessity means that health care services (e.g., procedures, treatments, supplies, devices, equipment, facilities or drugs) that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury or disease or its symptoms, and that are:

1. In accordance with generally accepted standards of medical practice; and

2. Clinically appropriate in terms of type, frequency, extent, site and duration and considered effective for the patient’s illness, injury or disease; and

3. Not primarily for the convenience of the patient, physician or other health care provider; and

4. Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient’s illness, injury or disease.