Why are compounded medications more expensive? (2024)

FAQs

Why are compounded medications so expensive? ›

Ingredients: The personalization involved in compounding medications means that specialized ingredients may be involved. When specialty ingredients need to be sourced, and often in smaller quantities, this can drive up the cost of materials. Equipment: Not all pharmacies are equipped to make compounded medications.

A patient may not be able to tolerate the commercially available drug, the exact preparation needed may not be commercially available, or a patient may require a drug that is currently in shortage or discontinued.

Generally speaking, compounded medications can be safe when a reputable compounding pharmacy prepares them. However, as mentioned earlier, it's not possible to ensure their safety, effectiveness, and quality since they don't carry FDA approval . Due to this, there are risks involved with compounded medications.

Some pharmaceutical companies acquire patents for older drugs and then jack up the price. Others have bought or merged with another drugmaker to avoid price competition. Direct-to-consumer advertising. Drug companies spend billions on ads (nearly $8.1 billion in 2022).

With that being said, because most compounded drugs aren't FDA approved, most insurance companies refuse to cover the costs of custom medications. However, some do cover the costs or provide opportunities for reimbursem*nt of out-of-pocket expenses.

That means many people with legitimate prescriptions from their doctors were unable to get them, except through a compounding pharmacy. Properly compounded versions are legal for anyone with a prescription, says Scott Brunner, CEO of Alliance for Pharmacy Compounding (APC), an advocacy organization.

Because compounding pharmacies have access to all kinds of raw ingredients for medications, they can make drugs with the same active ingredients. They'll get you back on track with a custom medication that works like the discontinued drug.

There are several reasons a prescription may be compounded, but typically it is because the drug that a patient has been prescribed is not commercially available.

However, compounded drugs pose a higher risk to patients than FDA-approved drugs because compounded drugs do not undergo FDA premarket review for safety, effectiveness, or quality. Compounded drugs should only be used to fulfill the needs of patients whose medical needs cannot be met by an FDA-approved drug.

A drug may be compounded for a patient who cannot be treated with an FDA-approved medication, such as a patient who has an allergy to a certain dye and needs a medication to be made without it, or an elderly patient or a child who cannot swallow a tablet or capsule and needs a medicine in a liquid dosage form.

Why is compound pharmacy so expensive? ›

Sometimes, there isn't even a one-size-fits-all medication available to compare prices. A compounded medication can cost anywhere from a few bucks to hundreds of dollars. It varies according to the compounds employed. Rare compounds and complex medication may raise the prices.

To determine that the compounding facility and its equipment meet safety and quality standards, ask about accreditation. Accreditation is the process by which a compounding pharmacy's quality is measured and determines that a pharmacy exceeds minimum standards in their quality and operations.

The cash advantage

Another reason compounding typically yields more profits than traditional dispensing is cash. Cash payments are more common among compounding pharmacies than traditional dispensing pharmacies. According to an NCPA survey, patients pay for half of compounded prescriptions with cash.

However, compounded drugs pose a higher risk to patients than FDA-approved drugs because compounded drugs do not undergo FDA premarket review for safety, effectiveness, or quality. Compounded drugs should only be used to fulfill the needs of patients whose medical needs cannot be met by an FDA-approved drug.

Compounding can be beneficial for patients who require customized doses, unique delivery methods, or specialized medications that are not commercially available.