So called “Compound Pharmacies,” companies that combine medications to suit the customized needs of individual patients are costing Tricare programs billions of dollars this year. Tricare is a health care program for civilian employees of the Department of Defense.
These companies, according to The Gazette, are mostly to blame for the defense health budget hole that is upwards of $2 billion.
Each year, the debt owed by Tricare has increased. In 2014, outpatient costs were $7.7 billion and compound drugs were $515 million. In the first few months of 2015, compound drugs for Tricare are $1.7 billion. Spending on outpatient drugs for Tricare is expected to rise to $8.2 billion by the end of the year.
Deputy Assistant Secretary of Defense of Health Resources Jon Rychalski said, “It’s really unheard of to see this kind of spike, and it threatens our program.”
These pharmacies that combine drugs that are not available on the market have been at the center of pricing scams and harmful marketing practices, and have especially targeted military health plans.
Retired military members have been reportedly receiving calls asking if they were in need of “specialty drugs” that could help them with aches and pains. They were told that their Tricare retail pharmacy benefit would cover the costs. According to The Gazette, in just two years, Tricare’s average cost for a compound drug has gone from $192 to $2,595.
Rychalski believes the compounders are taking advantage of the spike in prices with aggressive marketing practices.
According to the Pensacola News Journal, Dr. Jonathan Woodson, assistant secretary of defense for health affairs, among other health officials, have sent a letter to the armed services and appropriations committees requesting several changes that would close a $2 billion funding gap. Decreasing the use of compounding pharmacies and switching some accounts are among the requested changes.