In early June, pharmacy benefits manager giant Express Scripts announced that it was dropping coverage of more than 1,000 compound drug ingredients. Patients must now choose between switching medications or paying up to $1,000 for a single prescription.

The St. Louis-based company, which manages pharmacy benefits for 90 million Americans, is the most recent in a string of pharmacy benefits managers to restrict access to compound drugs.

The use and costs of compound medications have skyrocketed in the past two years. For Express Scripts’ clients, those costs increased 511 percent from $28 million in the first quarter of 2012 to $171 million in the first quarter of 2014, according to Brian Henry, Express Scripts’ spokesman. He said the average cost per compound prescription per patient increased from $90 in the first quarter of 2012 to $1,100 in the first quarter of this year.

The policy change will reduce costs of compound drugs for Express Scripts’ clients by 95 percent, Henry said.

“There was a 30 percent increase in demand from 2011 to 2014,” he said. “At the same time, costs have gone up 1,000 percent.”

The cost increases were due to new billing standards by the National Council on Prescription Drug Programs. The change was implemented Jan. 1, 2012. Starting then, compounding pharmacies were permitted to charge for each component in a compound medication and for the labor involved in making it. Previously, pharmacists frequently lost money on compound medications because they were only able to charge for the most expensive ingredient, according to A.J. Day, PharmD, the director of pharmacy consulting at Professional Compounding Centers of America (PCCA), a chemical wholesaler to independent compounding pharmacies.

David Miller, RPh, chief executive officer of the International Academy of Compounding Pharmacies (IACP), likened the billing changes to pharmacists previously billing just for the meat in a hamburger, but now charging separately for the meat, bun, cheese, pickles and onions.

Express Scripts and other pharmacy benefit managers have responded to the cost hikes by eliminating or reducing coverage of compound medications.

According to Express Scripts’ Henry, there are other FDA-approved medications that are less expensive and just as effective as compound medications. He also noted that compound medications are not regulated by the FDA. But according to Miller, many drugs that are prescribed today predated the FDA and haven’t been FDA approved either. Some include aspirin, Codeine and morphine, he said.

Henry acknowledged that some compound medications, such as liquid forms of pills, are necessary for patients who have difficulty swallowing pills. According to Day, of PCCA, compound medications are also vital for children with autism, patients with allergies to fillers, dyes and inactive ingredients in other medications, patients receiving hormone therapy and as alternatives to highly addictive opiate pain medications, like OxyContin and hydrocodone.

Compounding pharmacies also offer patients access to medications that manufacturers have discontinued.

“The implications of this are very broad,” Day said.

The coverage changes are causing headaches for physicians and pharmacists, as they are now communicating back and forth to find suitable alternatives for patients who can’t afford to pay the retail cash price for compound drugs.

“People that are not involved in patients’ care have set up processes that prevent patients from receiving medications they need,” IACP’s Miller said.

PCCA has reached out to meet with Express Scripts officials, but Express Scripts has canceled three meetings with the company, according to Aaron Lopez, PCCA’s spokesman.

The coverage change “puts patients in very, very difficult positions,” Day said.

He said physicians should encourage patients to talk directly with their employers about opting out of programs that exclude or reduce coverage of compound medications.

The new coverage restrictions are hurting business for QmedRx, a compounding pharmacy based in Orlando. The pharmacy has seen coverage rates for prescriptions it receives drop from 65 percent to 45 percent in the past year, said Blake Powers, the company’s chief operating officer.

The industry also suffered a setback in October 2012 when the New England Compounding Center, based about 20 miles west of Boston, was shut down after an outbreak of fungal meningitis traced to the facility killed 64 people. The incident brought scrutiny on the fact that the compounding pharmacies are not regulated by the FDA.

Powers, however, said the industry is closely regulated by states that do surprise inspections at his facility.

“We’re regulated by every single state Board of Pharmacy that we ship to,” he said. The company ships to 49 states.

Can topical pain medications prevent opiate overuse and addiction?

Compound pharmacists say they can provide topical painkillers as alternatives to highly addictive opiate painkillers like OxyContin and hydrocodone. The number of annual overdose deaths from prescription painkiller was 14,800 in 2008, up 300 percent from 4,000 in 1999, according to the Centers for Disease Control and Prevention.

In the 1990s, a handful of studies suggested that opiate narcotic prescription painkillers weren’t as addictive as previously thought, and physicians started prescribing them more frequently.

“I can tell you when I went to medical school, the one thing they told me about pain was if you give a patient in pain an opiate painkiller, they will not become addicted, and that was completely wrong. We have a real need to better understand and ensure we use these only when necessary,” said Tom Frieden, director of the Centers for Disease Control and Prevention, during a press briefing last year.

The drugs were developed to treat pain in late-stage cancer patients, but physicians began prescribing them for all types of chronic pain, and the studies suggesting they weren’t all that addictive were later debunked.

In 2012, healthcare providers wrote 259 million narcotic prescriptions, enough for every American to have a bottle of pills, according to a Centers for Disease Control and Prevention report.

Forty percent of U.S. narcotic prescriptions in the United States in 2011-2012 were written by only 5 percent of opioid prescribers, according to an Express Scripts study.

Now, in order to avoid the chance of abuse and addiction, or of unwanted side effects, physicians are prescribing topical compound medications to treat pain. Those are not covered by the plans that Express Scripts administers.

Other pharmacy benefit managers reducing coverage:

In June, pharmacy benefit manager Catamaran Corp. launched a program to hep its clients reduce the increasing costs of compound medications. The Chicago-based company said in a statement that its annual expenses for compound medications had increased five-fold due to a jump in use and cost.

OptumRx, the pharmacy benefits manager of United Health Group, also recently dropped coverage of some compound ingredients. Officials said it has seen a 35 percent increase in the use of compound drugs among its members over a 12-month period from 2012 to 2013. The number of compounding pharmacies has also grown from 2,500 in 2009 to 7,500 in 2012, according to the company.

CVS Caremark, Harvard Pilgrim Health Care and some Blue Cross Blue Shield organizations have also restricted coverage for compound medications.