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ESI and CVS/Caremark Announce Plans to Curtail Compound Coverage
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ESI and CVS/Caremark Announce Plans to Curtail Compound Coverage

Express Scripts (ESI)

On June 3, Express Scripts launched its new “Compound Management Solution” and began contacting its clients through sales force calls and a national webcast on Tuesday, June 10. ESI’s “solution” to a growing number of claims for compounded preparations is simple:  they won’t pay for them.

ESI’s clients – individual companies, insurance firms, unions, self-insured businesses of all sizes – are being told that ESI has created a list of excluded ingredients which ostensibly would only cover those medications that the PBM deems “clinically acceptable and reasonably priced.” What’s on that list? Nobody knows. Even ESI admitted that the “list” isn’t yet available when directly questioned by its clients. No information was provided that describes the process by which clinically acceptability was determined. And, most importantly, in statements made to clients, ESI alleges that participating in their new “Compound Management Solution” will eliminate almost 95% of all compound claims.

Clients are being told that they can implement this new “solution” effective July 15 by notifying Express Scripts’ account management by July 3, 2014. If the client does not respond at all, they will be automatically enrolled in the “solution” effective September 15.  Although most clients already provide coverage with a prior authorization management system, the new program will eliminate that entirely and drugs on the so-called-to-be-determined-we-don’t-know-yet list will be automatically rejected with a “Not Covered” rejection code.

“Rather than establishing a workable and logical ‘prescription benefit management’ program for compounds, Express Scripts is taking the easy way out and saying ‘just don’t pay for these’ medicines,” says IACP President Pat Stephens, PharmD.  “That is detrimental to patient health and, given the ridiculously short notice and implementation timeline they’ve proposed, it’s clear that the impact on patients wasn’t even addressed.”


On May 30, CVS/Caremark announced plans to their provider manual related to copayment collection and claims for compounds. Click here to see the copy of this announcement obtained by IACP.

As with many other PBMs and insurance plans, participating pharmacy providers are expected to collect the full amount of the copayment from the beneficiary – no discounts, no waivers, not “copay coupons” – unless otherwise permitted by either Caremark or state law. PBMs are auditing copayment collection documentation and it looks like Caremark may be considering the same. Failure to collect the full copayment could lead to termination of a pharmacy’s network contract.

While documentation of copayment collection is an important “must do” in your pharmacy, Caremark is now requiring a completely different and onerous type of documentation for any and all compounded preparations submitted for reimbursement.  

Effective immediately, compounders not only have to include the NDC number of each ingredient use in the compound they must also have “at least two (2) scientifically valid studies in peer-reviewed journals supporting the clinical efficacy of the additional ingredients” for each of those ingredients and have those studies available if Caremark requests them.

“This is nothing more than an administrative hurdle designed to deny coverage for legitimate prescriptions and keep beneficiaries from obtaining the medications they need,” says IACP Executive Vice President/CEO David G. Miller, RPh.  “It’s discrimination… pure and simple.” With an estimated fifty percent of all prescription drugs used for extra-label purposes, Caremark has an established track record of reimbursing for medications for which no clinical studies exist. Yet, the PBM has not nothing to address extra-label dispensing or reimbursement.  Only compounds are singled out.

Of particular concern to IACP is that the peer reviewed medical literature on compounded preparations and their individual ingredients is scant. While the IACP Foundation has supported research into some ingredients and preparations – most notably BHRT – there are literally thousands of APIs, inactive ingredients, bases, flavorings, dyes, etc. for which studies have never been completed. Even the profession’s most referenced peer-reviewed journal, the International Journal of Pharmaceutical Compounding, doesn’t have the extent of information as Caremark is requesting.

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