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"The Rising Cost of Prescription Drugs"

Part 2

"Compounding Pharmacists: An Under-utilized Solution"

As the costs of prescription drugs continue to rise, we are all faced with a myriad of problems. The rates for health insurance plans are spiraling upward. The list of prescription drugs which are covered by these plans are trimmed down.

Elderly patients find themselves unable to pay for prescriptions which they so desperately need. We hear stories about the elderly having to decide between buying food, or paying for the drugs they need. Or, how they cut their doses in half because they canít afford the cost of the full prescription. Unfortunately, taking half a dose of a prescribed medication does not mean that the positive effects of the drug will be reduced by half.

As advances in scientific research continue to deal with a vast array of diseases and ailments, and as more and more drugs are developed to deal with these afflictions, the consumer is overwhelmed with thousands of drugs. The cost of research is definitely not cheap, and these costs are passed on to the consumer in the ultimate price of these new drugs as they are released into the market place. But as pharmaceutical manufacturers have commercialized much of the production of prescription drugs, some things have occurred which put the consumer at a distinct disadvantage.

Prior to the commercialization of prescription drug manufacturing, the process to obtain prescription drugs was rather simple. A doctor would prescribe a drug for a patient. The patient would take this prescription to their local pharmacist or apothecary. The pharmacist would then mix various ingredients to fulfill the specific directions of the doctor. Each prescription was made specifically for each patient at the direction of the doctor. We all remember the mortar and pestle which pharmacists used to mix many of these drugs, and it still remains today as a logo for many pharmacists. The Rx on every prescription is actually a Latin abbreviation for "Take thou a recipe".

This individual kind of service was timely and very costly. But, if the patient required 10mg of a drug, or 12mg of a drug, it was rather easy for the pharmacist to make the exact dose. If the doctor requested that the drug be in liquid form, or tablet form, the pharmacist could do this. If the drug needed to be flavored to make the drug more palatable, the pharmacist could do this.

As a matter of fact, pharmacists have always been trained on how to mix various substances to fulfill the specific prescription orders of doctors.

Commercialization has changed much of this. It is now far too costly to make prescription drugs in whatever dosage form is required by the individual patient. Mass production precludes this kind of individual attention. If a drug is manufactured in a 10mg and 25mg dose, and the patient requires a 15mg dose, theyíre left with taking either too little of the drug, or, too much. The science and technology which we have used to make so many medical advancements in the development of prescription drugs has forgotten the most important aspect of the process,........the patient!

But the skills which pharmacists are trained with have not been forgotten and have not been lost. There are thousands of pharmacists who still utilize their training to provide patients with individual prescription services. They are referred to as compounding pharmacists. After all, thatís what pharmacists used to do, they mixed various substances to make a drug, they "compounded". This is not something new, not something which is experimental, it is the primary foundation of pharmacy!

The US FDA (Food and Drug Administration) has issued many policies, procedures and directives regarding compounding pharmacists. They receive the same level of scrutiny and review as the do all pharmaceutical manufacturers. Compounding pharmacists have been restricted from mass producing any compounded drugs, and are required to make these drugs on an individual patient by patient basis at the specific direction of the prescribing physician. The formulas used by compounding pharmacists are subject to intensive scrutiny by various agencies.

So, if making a drug for a patient on an individual basis is time and labor intensive, how can compounding be less expensive for the patient or insurance provider. Letís look at a few examples.


A commercial drug is manufactured to treat a specific ailment. The drug is prescribed for a child. The drug has both an offensive smell and taste. The childís parent attempts to administer the drug (giving them the prescribed amount in a spoon). The child gags, squirms, and spits outs the mouthful of the drug. After 4 attempts, the parent is able to get the child to swallow the prescribed dose. During the course of treatment, with this example in mind, it might be possible that the parent has used 4 times the amount of drug required to fulfill the treatment.

A compounding pharmacist can flavor this drug to make it more palatable, thereby reducing the total amount of drug required to meet the requirements of the prescription. Although the unit cost might be more expensive in some instances, the total cost for the prescription could be significantly reduced since the total amount of drug used is less.

The same type of pediatric example could be stated for tablets. Although aspirin is an OTC drug, children often times do not like the bitter taste. Many years ago, a company flavored aspirin to make them more palatable. This product still exists today, no one thinks it is experimental, and it meets the individual needs of the patient.

Enhancing the flavor or altering the taste is just one way which compounding pharmacists can reduce the total amount of drug used in the course of treatment.


Letís say that a patient has a medical problem which requires a prescription. The doctor determines that a particular drug should be prescribed. It is commercially available in a 200mg tablet and a 250mg tablet. An initial prescription is written for the 200mg tablet. The patient takes the prescription for a few days and conveys to the doctor that the drug is not having the desired effect. The doctor determines that a greater dose of the drug is required, and prescribes the 250mg tablet. The patient obtains the new prescription and continues to experience problems. The doctor determines that the dosage is too high to meet the medical needs of the patient.

After filling 2 different prescriptions (both of which must now be discarded), the alternatives are minimal at best. Unless there is a drug commercially manufactured in a different dose, the patient is left with either being over-medicated, under-medicated, or not medicated at all. Letís not forget that the patient and the insurance provider have both paid for the cost of 2 prescriptions.

In this instance, a compounding pharmacist would be able to compound a limited supply of the drug in a specific dose as prescribed by the doctor which has the desired effect on the patient. Waste would be significantly reduced, the patient would be able to receive the dosage of the drug necessary, and possibly the patient would be able to avoid additional complications by receiving the medical treatment they needed. If the proper and accurate usage of prescription drugs can prevent other more costly medical treatments, (although the compounded drug costs might be more expensive in some instances than commercially available drugs), the cost savings to the patient and insurance provider could be significant. Additionally, this type of service ensures increased quality patient care.

Some insurance providers look upon this process as an excellent way to meet the needs of the their subscribers and as a way to avoid expensive alternative treatments. They are willing to reimburse compounding pharmacists at a competitive rate for these unique services.

Other insurance providers ignore the "no mass-production" edicts imposed by the US FDA on compounding pharmacists, and are only willing to reimburse compounding pharmacists for these prescriptions in a mass-production cost formula. This results in a reimbursement rate for the compounded drug which the pharmacist makes being far less than what is commercially available. Hence, the commercially available drug in a 200mg dose might sell for $85. The compounded drug in a 225mg dose (made specifically by the pharmacist for the patient) could very easily be subject to an insurance providerís reimbursement calculation of only $7.50 Although both prescriptions are the same drug, they are different dosages. The compounded drug is not reimbursed in a competitive fashion by some insurance providers. If a commercially available drug meets the needs of the patient, it should be used. If it doesnít, there should be an equitable pricing solution for the use of compounded drugs to meet the needs of the patient and to reduce the more expensive alternative medical treatments.

This type of inequitable pricing leaves the patient with few alternatives, puts unrealistic financial burdens on compounding pharmacists, and ultimately results in significantly higher drug costs for the insurance provider and the patient.

Dose / Injectables:

Many patients need to take their medications by injection. In a simple format, the patient obtains a prescription for the drug, and draws out the amount of drug needed from the vial into a syringe and injects the drug. Subsequent injections allow for the patient to re-access the vial for additional amounts of the drug.

In some instances, due to the disease or ailment, the type of drug prescribed is dispensed in a single-dose vial. This means that the patient cannot reinsert a needle into the vial for a subsequent injection.

If the single dose vial (which is commercially manufactured) contains 300mcg of the drug, and the prescription is for a 75mcg injection, this will require that the patient discard 225mcg of the drug after each injection. One might suggest that the patient purchase a smaller dose vial to reduce the amount of waste, but if a 300mcg vial is the smallest dose vial commercially manufactured, they have little if any alternative.

Discarding 75% of a drug as a normal procedure is not a financially sound practice!

Numerous compounding pharmacists maintain sterile laboratory environments where they can compound various drugs in a sterile environment. These laboratory facilities are used for the compounding of chemotherapy products, enteral therapy products, and many IV solutions which can only be compounded in this type of sterile environment. They can also pre-load syringes in this sterile environment which allows them to make use of all of the drug in a single-dose vial.

In the above mentioned example, the patient would be required to discard 75% of the drug from the single-dose vial. A compounding pharmacist with the proper laboratory equipment would be able to pre-load syringes with this drug, thereby reducing the 75% waste factor.

There are medical facilities and insurance providers across the nation who utilize this process to reduce drug waste. The cost savings to the patient and insurance providers are phenomenal. But there are insurance providers who continue to take a negative view on these options. They will pay for a prescription where the patient is required to discard 75% of the drug, but when they have the opportunity to utilize a compounding pharmacist who can pre-load the syringe, they will only reimburse the pharmacist for the amount of drug dispensed, not for the use of the lab or the pharmacy technician performing this service. Although 75% of the total cost has been eliminated by pre-loading the syringe, the insurance provider will not pay for these services, or pass on any of the cost savings to the compounding pharmacists.

Ultimately, the financial result is that it is more fiscally sound for a pharmacist to dispense the drug as prescribed (with a 75% waste factor), than it is to only dispense the actual amount of drug required by the patient and called for in the prescription.

Application (Method of Delivery):

Sometimes, the form in which drugs are commercially available conflict with the needs of the patient, or, the patient has medical problems which prevent them from administering the drugs in their available form.

A patient might not be able to swallow a drug in tablet form, but is able to take a capsule. A compounding pharmacist can make this change.

A patient might not be able to digest tablets or capsules, or might have negative digestive reactions to this mode of delivery. A compounding pharmacist could make a trans-dermal compound which is able to be applied to the skin and absorbed into the system that way.

Minor pain relief or analgesic medications might cause gastric distress. Simple trans-dermal compounds can be made to allow the patient to apply the medication directly to the afflicted area. This process works extremely well with arthritic patients.

These are just a few of the alternatives available.


There are a lot of factors which drive up the costs of prescription drugs. Pharmaceutical manufacturers have done a great job of supporting research and development for newer and better drugs. The R&D expenses, clinical trials and US FDA regulatory compliance procedures are very expensive. If we as consumers want better drugs, we should be willing to pay for all of the related expenses.

But, the issues raised in this commentary as well as issues raised in a previous commentary Part 1 merit serious consideration. Quality patient care at affordable rates should always remain as the primary consideration. The cost of prescription drugs should not be used to artificially supplement poor management, archaic policies and procedures, and unsound fiscal management.

It is difficult to rationalize the expenses related to a 1-month prescription which must be discarded and replaced with a different prescription multiple times before the proper medication has been identified. It is difficult to rationalize a standardized waste factor of 75%. It is difficult to rationalize increased rates and reduced prescription plan coverages merely to compensate for loss factors which could very easily be rectified.

The cost of prescription drugs will continue to increase as the expenses related to their development continue to increase. But these costs should not cover the expenses of providers who fail to make the best use of technology which is available.

When an insurance provider tells you that they are willing to pay $2,000. for a prescription, but are unwilling to pay only $700. (plus a compounding pharmacist fee) for the same prescription, you might scratch your head a few times (like I do) and ask yourself "Whatís wrong with this picture?"

Prescription costs are going to rise, and they will continue to rise. But it would be nice if we didnít have to pay for bureaucratic ineptitude at the same time. There are many viable solutions to these cost problems, and many of them address the issues of quality patient care as well. In many instances, the services provided by compounding pharmacists can play a critical role in the solution. The mortar and pestle continues to be a state-of-the-art tool in the pharmacy. Itís where it all began!

Additional Information:

If you would like to obtain additional information about compounding and compounding pharmacists, you will find the following web sites of interest:

International Academy of Compounding Pharmacists

Professional Compounding Centers of America, Inc.

Mark S. Deion
23 September 1999

© Copyright 1999

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