CurrentBlue Cross Blue Shield - IowaPolicy 05.01.88

Compounded Drug Products

Defines coverage criteria for compounded drug products with total prescription ingredient cost of $500 or more for Wellmark Blue Cross and Blue Shield members; applies to medical necessity determinations and benefit administration.

Policy Summary

PayerBlue Cross Blue Shield - Iowa

PolicyCompounded Drug Products

Policy CodePolicy 05.01.88

Change TypeNon-material revision (Dec 2023)

Effective DateFeb 22, 2024

Next Review DateN/A

Key ActionSubmit prior authorization for compounded drug products with total prescription ingredient cost of $500 or more and include documentation that each active ingredient is FDA-approved and appropriate for the indicated route and dose.

SourceLink

POLICY UPDATE CHANGES

Policy revised December 2023 (see history).

>$500Ingredient cost threshold

36 monthsDOA - transplant (12+)

6 monthsDOA - other

05.01.88Policy identifier

Coverage Criteria for Compounded Drug Products

Medical necessity criteria

Covered when ALL of the following are met for compounded drug products whose total prescription ingredient cost is $500 or more:

Primary covered categories: Request is for one of: intravenous (IV) injection or infusion; anti-infective for injectable use (e.g., antibacterials, antivirals, antifungals); total parenteral nutrition (TPN); leuprolide acetate for infertility when the patient is unable to utilize the FDA‑approved commercial product (1 mg per 0.2 mL kit); pyrimethamine; sirolimus for tuberous sclerosis when other dermatologic treatments are inappropriate.

Transplant exception: Request is for tacrolimus (Prograf) or everolimus (Zortress) for a patient receiving a transplant.

Drug and formulation requirements: Each active ingredient in the compound is an FDA‑approved drug and is FDA‑approved for the prescribed indication; the compound route of administration matches the FDA‑approved route for each active ingredient; the dosage or concentration of each active ingredient is equal to or below the FDA‑approved dosage or concentration.

Exclusions to coverage: Request is not for a topical compound or topical compound kit for use on skin (except sirolimus for tuberous sclerosis); compound is not intended for anti‑aging or cosmetic use; compound is not a compound kit that contains bulk powder or a dietary supplement; request is not for a hormone therapy compound for menopause or for androgen decline due to aging.

Additional justification permitted/required: Coverage allowed if there is a current supply shortage of the commercially manufactured product OR the patient has a medical need for a dosage form or dosage strength not available commercially OR the patient had an intolerance or contraindication to the commercially manufactured product (e.g., allergen or adverse effect to inactive ingredients) OR the commercial product has been discontinued by the manufacturer for reasons other than lack of safety or effectiveness.

Duration of approval

Duration of Approval (DOA) rules:

DOA for transplant patients: Tacrolimus (Prograf) and everolimus (Zortress) for a patient receiving a transplant: for patients 12 years of age and older DOA = 36 months; for patients less than 12 years of age DOA = up to 12 years of age.

DOA for other drugs: Other drugs and indications: DOA = 6 months.

Coverage excludes topical compounds and topical compound kits for use on skin (for example: creams, gels, lotions, or ointments), except for sirolimus when prescribed for tuberous sclerosis. Compounds intended for anti-aging or cosmetic use, compound kits, and compounds that contain bulk powders or dietary supplements are also excluded. In addition, hormone therapy compounds for menopause or for age-related androgen decline (e.g., testosterone, estrogen, progestin, bioidentical hormones) are not covered.

Compounded products that do not meet the policy's specified medical necessity criteria are considered not medically necessary and will not be covered.

Provider Requirements and Prior Authorization

Prior Authorization

Prior Authorization Required

Prior authorization is required for compounded drug products with a total prescription ingredient cost of $500 or more.

Applies to compounded prescriptions with total ingredient cost of $500 or more.

Step Therapy

Step-through Commercial Product First

When a commercially available, FDA‑approved product exists for the same indication and is appropriate for the patient, the commercially manufactured product must be used before a compounded product will be approved.

If the patient has intolerance or contraindication to the commercial product, or the commercial product is discontinued, a compounded product may be considered.
Approval may be granted when there is a current supply shortage of the commercial product or when a needed dosage form/strength is not commercially available.

Documentation Required

Required Documentation Elements

Provide documentation showing that each active ingredient in the compound is an FDA‑approved drug and is FDA‑approved for the prescribed indication, the compound route of administration matches the FDA‑approved route for each active ingredient, and the dosage/concentration of each ingredient is equal to or below the FDA‑approved dosage/concentration. Also document the clinical reason for compounding (e.g., intolerance/contraindication to commercial product, unavailable dosage form/strength, supply shortage) and the requested duration.

Confirmation that each active ingredient is FDA‑approved and FDA‑approved for the intended indication.
Route of administration for the compound equals the FDA‑approved route for each active ingredient.
Dosage/concentration of each active ingredient is ≤ the FDA‑approved dosage/concentration.
Clinical rationale for compounding (e.g., allergy to inactive ingredients, contraindication, discontinued commercial product, supply shortage, need for unavailable dosage form/strength).
Specify whether request is for IV/infusion, anti‑infective injectable, TPN, leuprolide acetate for infertility (when unable to use commercial product), pyrimethamine, or sirolimus for tuberous sclerosis when other treatments are inappropriate; tacrolimus or everolimus for transplant recipients (include age for duration determination).
Do not submit topical, anti‑aging/cosmetic, hormone therapy for menopause or age‑related androgen decline, bulk powders, or dietary supplement compounds unless policy exceptions apply.

Denial Risk

Common Exclusion Triggers

Common exclusion triggers that will generally make a compounded product not medically necessary include topical preparations, anti‑aging or cosmetic uses, compound kits, bulk powders, dietary supplements, and hormone therapy for menopause or age‑related androgen decline.

Topical compounds or topical compound kits for use on skin (e.g., cream, gel, lotion, ointment) are excluded.
Compounds intended for anti‑aging or cosmetic use are excluded.
Compounds containing bulk powder ingredients, dietary supplements, botanical/herbal products, vitamin/mineral products, amino acid products, or enzyme supplements are generally excluded.
Hormone therapy compounds for menopause or androgen decline due to aging (e.g., testosterone, estrogen, progestin, bioidentical hormones) are excluded.

Definitions

Pharmaceutical compounding

DefinitionPharmaceutical compounding is the combining, mixing, or altering of ingredients to create a customized medication that is not otherwise commercially available and is medically necessary for an individual patient in response to a licensed practitioner's prescription.

Exclusions from compoundingDoes not include mixing or reconstituting commercial products per the manufacturer's instructions or approved labeling; compounded drugs are not FDA‑approved and bulk ingredients are not FDA‑approved products.

Clinical reasons for compoundingMay be necessary for drug shortages, discontinued/unavailable products, allergies to commercial product excipients, need for tailored dosage strengths, or alternative dosage forms for patients who cannot use the commercial form.

Initial Therapy Criteria

Initial therapy criteria

Initial coverage conditions: Each active ingredient is an FDA‑approved drug and is FDA‑approved for the indication; route of administration is the same as the FDA‑approved route; dosage/concentration of each active ingredient is equal to or below FDA‑approved dosing; request is not for a topical compound or topical compound kit for skin (with the exception of sirolimus for tuberous sclerosis as noted in primary covered categories); compound is not intended for anti‑aging or cosmetic use and does not contain bulk powder or dietary supplements; request is not for hormone therapy for menopause or age‑related androgen decline; coverage is justified by shortage, unavailable dosage form/strength, intolerance/contraindication to commercial product, or commercial product discontinued for reasons other than safety/effectiveness.

Step Therapy Requirements

Step	Requirement	Coverage status
1	Commercially available FDA‑approved products must be used first when appropriate; compounded products may be considered only when commercial options are unsuitable (examples: shortage, intolerance/contraindication to the commercial product, discontinued by manufacturer for reasons other than safety/effectiveness, or required dosage form/strength not available commercially).	Covered with criteria
2	Compounded product route of administration must match the FDA‑approved route for each active ingredient, and dosage/concentration of each active ingredient must be equal to or below the FDA‑approved dosing.	Covered with criteria
3	Topical compounds or topical compound kits for skin, compounds intended for anti‑aging or cosmetic use, compound kits containing bulk powders or dietary supplements, and hormone therapy compounds for menopause or age‑related androgen decline are excluded from coverage (except sirolimus for tuberous sclerosis per other criteria).	Not covered

OpenPayer

Compounded Drug Products

Coverage Criteria for Compounded Drug Products

Coding and Cost Threshold

Provider Requirements and Prior Authorization

Background on Compounding

Definitions

Initial Therapy Criteria

Continuation / Additional Fills

Step Therapy Requirements