Medications compounded for individual patients are an important part of health care, but a good deal of confusion exists about them, especially after events of the past few years. This article discusses both what they are and why they are important in ophthalmology practice.

Q. What is a compounded medication?

A. The FDA defines compounding as: “ … a practice in which a licensed pharmacist, a licensed physician, … combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.”¹

Q. Why are compounded medications prescribed?

A. For many reasons. In particular, patients with a specific health need may require an individually compounded medication. For example:

• The patient requires limited dosage strength.
• The compounded medication replaces the patient’s regular drug due to a supply shortage.
• The patient needs the medication in liquid form instead of pill form.
• Due to a patient allergy, the drug must have dyes removed.
• The drug is not commercially available in an appropriate dosage.

The most commonly used compounded medication in ophthalmology is bevacizumab (Avastin, Genentech). Bevacizumab is FDA approved to treat colorectal cancer, so its use in ophthalmology is “off-label”. It has not been through the rigorous FDA process required for approval to treat ophthalmic pathology.

This has not, however, stopped ophthalmologists from using bevacizumab or other compounded drugs. They use bevacizumab to treat a variety of ophthalmic conditions, including choroidal neovascularization, AMD, diabetic retinopathy and retinal vein occlusion.

The drug’s manufacturer does not produce bevacizumab in doses suitable for intravitreal injections; therefore, ophthalmologists look to compounding pharmacies to create single-use vials of the appropriate dose.

Q. Have there been any incidents of infection with the use of compounded drugs?

A. Unfortunately, yes. In September 2012, the Centers for Disease Control and Prevention (CDC) and the FDA investigated a fungal meningitis outbreak and other infections acquired by patients who had received steroid injections, primarily for pain management. These procedures occurred throughout the United States.

The New England Compounding Center (NECC) in Framingham, Mass., had supplied the compounded medications to the facilities where the injections were administered; there were more than 800 illnesses resulting in 64 deaths. The investigation revealed a violation of NECC’s state license as a compounding pharmacy.

In 2014, the American Academy of Ophthalmology reported incidents of infections associated with bevacizumab injections in four locales from 2011.² The FDA issued a warning to providers to be cognizant of where the drug is compounded and to use only drugs secured from reliable pharmacies using aseptic techniques for drug preparation.

Q. Are there specific reimbursement issues?

A. Payers typically reimburse for FDA-approved drugs when prescribed or used for indications described in the FDA labeling. However, payment for off-label drugs or compounded drugs is at the discretion of the payer. Key points about reimbursement for compounded drugs include:

• An ASC is not separately reimbursed for compounded drugs.
• Pricing for compounded drugs comes from the local Medicare contractor.
• Specific HCPCS codes do not exist for compounded drugs. Do not use the HCPCS code for the brand name drug that is being mixed or altered by the compounding pharmacy.
• Compounded drugs are coded as miscellaneous “J” codes, J3490 or J3590. Last year, CMS added J7999 specifically to describe ophthalmic bevacizumab.
• Compounded medications do not have NDC numbers.
• Submitted claims typically require a narrative to describe the compounded medication, including dose; some payers also require an invoice.

Q. Is pricing a consideration when physicians prescribe a compounded drug?

A. Sometimes. Although not listed by the FDA or other authorities on compounding, price is also a factor when physicians prescribe a compounded drug over a similar FDA-approved drug sold by a manufacturer. Drug manufacturer’s prices are usually higher than compounding pharmacy pricing.

Q. Who oversees compounding pharmacies?

A. Since 2013, the FDA has monitored and regulated the manufacture of compounded drugs. It also prohibits reselling drugs labeled “not for resale”, and traces drugs throughout the US. Section 503A of the FDCA outlines rules and limitations for compounding pharmacies.³ The following are of interest:

• Licensed individuals perform the compounding.
• The product is compounded based on a valid prescription order for a specific patient.
• Under certain conditions, limited quantities may be compounded prior to receipt of a valid prescription for an individual patient.
• There are specific quality standards.
• Compounding must be done with FDA-approved or -regulated substances.

The FDA added a new section, 503B, in 2013, permitting a pharmacy to become an “outsourcing facility”. Outsourcing facilities are a cross between a traditional compounding pharmacy and a drug manufacturer.

These facilities must register with the FDA, comply with current good manufacturing practice, and undergo periodic FDA inspections; they are held to a higher standard than 503A pharmacies.

Unlike 503A pharmacies, outsourcing facilities do not require a patient-specific prescription. Registered outsourcing facilities can be verified on the FDA website.⁴

State pharmacy boards oversee the licensure and daily operations of pharmacies. The requirements vary by state. For example, some states allow compounding pharmacies to fill a general prescription for “office use”; others require a patient-specific prescription. After the NECC failure, several states began requiring individual prescriptions for every compounded medication order. OM

REFERENCES

1. Compounding and the FDA: Questions and answers. fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm339764.htm#risks . Accessed May 30, 2017.
2. Verifying the source of compounded bevacizumab for intravitreal injections - 2014. tinyurl.com/yc4ghh7m . Accessed May 30, 2017.
3. Pharmacy compounding of human drug products under Section 503A of the Federal Food, Drug, and Cosmetic Act. https://tinyurl.com/ycqajgcw . Accessed May 31, 2017.
4. Registered Outsourcing Facilities. fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm378645.htm . Accessed May 30, 2017.

Suzanne L. Corcoran, COE is vice president of Corcoran Consulting Group. She can be reached at (800) 399-6565 or www.corcoranccg.com .