Medications compounded for individual patients are an important part of health care. This article discusses what they are and their importance in a retina 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. Physicians have 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 their regular drug due to a supply shortage;
• The patient needs a liquid dose of a medication instead of a pill form;
• Due to an allergy, the drug must have dyes removed; or
• The drug is not commercially available in an appropriate dosage.

The most commonly used compounded medication in ophthalmology is bevacizumab (Avastin; Genentech). The FDA approved bevacizumab to treat colorectal cancer, so its use in the eye is off label. It has not been through the rigorous FDA process required for approval to treat ophthalmic pathology. This has not stopped retina specialists from using bevacizumab or other compounded drugs. Retina specialists use bevacizumab to treat a variety of ophthalmic conditions, including choroidal neovascularization, AMD, diabetic retinopathy, and retinal vein occlusion. Genentech does not produce bevacizumab in doses suitable for intravitreal injections, so ophthalmologists look to compounding pharmacies to create single-use vials of the appropriate dose.

Q. Are there specific reimbursement issues?

A. Payers typically reimburse for FDA-approved drugs when prescribed or utilized 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 the following:

• 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. In 2016, CMS added J7999 specifically to describe compounded drugs, including ophthalmic bevacizumab.
• Compounded medications do not have NDC (National Drug Code) numbers.
• Pricing for compounded drugs is by the local Medicare contractor.
• Submitted claims typically require a narrative to describe the compounded medication, including dose; some payers also require an invoice.
• An ASC is not separately reimbursed for compounded drugs.

Q. Is pricing a consideration when prescribing 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 manufacturers’ prices are usually higher than compounding pharmacy pricing.

Q. Why does Medicare use a 28-day interval between injections for anti-VEGF drugs?

A. This is based on the FDA package labeling for Lucentis (Genentech), which specifies this interval. Eylea (Regeneron) package labeling is more flexible, but also states that once every 4 weeks after the initial loading dose is the maximum frequency. Medicare is more or less using the original anti-VEGF for ophthalmology (Lucentis) as the standard for these drugs. It even often applies the same requirement for intravitreal injections of Avastin, which doesn’t have any FDA guidelines for ophthalmic use.

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

A. Unfortunately, yes. In September 2012, the CDC and the FDA investigated a fungal meningitis outbreak and other infections acquired by patients who had received steroid injections. The investigation revealed a violation of the pharmacy’s state license as a compounding pharmacy. Also, in 2014, the American Academy of Ophthalmology reported incidents of infections associated with the injection of bevacizumab in 4 locations from 2011.² The FDA issued a warning to providers to be cognizant of where drugs are compounded and only to use drugs secured from pharmacies that use aseptic techniques for drug preparation.

Q. Who oversees compounding pharmacies?

A. State pharmacy boards oversee pharmacy licensure and operations. Requirements vary by state. Some states allow compounding pharmacies to fill a general prescription for “office use,” whereas others require a patient-specific prescription. Some states have begun requiring individual prescriptions for every compounded medication order. Since 2013, the FDA has regulated the manufacture of compounded drugs, prohibited reselling drugs labeled “not for resale,” and traced drugs throughout the United States. Section 503A of the Federal Food, Drug, and Cosmetic Act outlines rules and limitations for compounding pharmacies.³ Provisions include that licensed individuals perform the compounding; the product be 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); quality standards be specified; and that compounding be done with FDA-approved or FDA-regulated substances. A new section, 503B (added in 2013), permits a pharmacy to become an “outsourcing facility.” These are a cross between a traditional compounding pharmacy and a drug manufacturer. These facilities must register with the FDA, comply with Current Good Manufacturing Practices, 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’s website.⁴ RP

REFERENCES

1. US Food and Drug Administration. Compounding and the FDA: questions and answers. Accessed April 5, 2021. http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/PharmacyCompounding/ucm339764.htm#risks
2. US Food and Drug Administration. Compounding Risk Alerts. Accessed April 5, 2021. https://www.fda.gov/drugs/human-drug-compounding/compounding-risk-alerts
3. US Food and Drug Administration. Pharmacy compounding of human drug products under section 503A of the federal food, drug, and cosmetic act guidance. Accessed April 5, 2021. https://www.fda.gov/regulatory-information/search-fda-guidance-documents/pharmacy-compounding-human-drug-products-under-section-503a-federal-food-drug-and-cosmetic-act
4. US Food and Drug Administration. Registered outsourcing facilities. Accessed April 5, 2021. https://www.fda.gov/drugs/human-drug-compounding/registered-outsourcing-facilities