Compounding for Rheumatologists: A Glimpse Inside the Black Box of Pricing to Patients

Objectives Drug compounding is the combining, mixing, or alteration of active pharmaceutical ingredients (API) into doses or dosage forms for individual patients.[1] While often prescribed by rheumatologists, the methodology behind drug compound pricing by pharmacies remains unclear to most rheumatologists. In this study, we reviewed the approach to pricing 1 of the most prescribed compounds: 100 grams of diclofenac 10% in PLO. Methods The constituent costs of a drug compound were determined by interviewing members of the Alberta Pharmacist’s Association. API and excipient ingredient costs were determined by reviewing listed wholesaler prices. Published insurance plan information was used for dispensing fees and insurer permitted mark-ups.[2] These mark-ups are at the pharmacy’s discretion if a patient pays cash. Price quotes were attained by calling pharmacies across Alberta. Independent, chain, and compounding pharmacies were called to ensure representation from the different pharmacy types. Only 1 pharmacy from each brand/banner was called. Results A comprehensive overview of price constituents for diclofenac 10% in PLO is seen in Figure 1. Using the information available, we determined the theoretical lowest cost for this compound was $31.78. Contextually, the cost per 10g of diclofenac (amount needed to make compound) ranged from $2.92-$17.92 The cost per 90g of PLO (amount needed to make compound) ranged from $8.67-$13.86. Mark-up and dispensing were the largest contributor to final price. The real price varied considerably by pharmacy. The average price for 100g of 10% diclofenac was $50.54 (range: 38.42-55.82) at chains, $88.36 (range: 37.83-205.00) at compounding pharmacies, and $94.63 (range: 55.75-170.00) at independent pharmacies. Conclusion A wide range of prices for the same compound were determined. Several factors contribute to the large price variations. The most important be summarized as follows: 1. Differing acquisition costs from wholesalers for the active pharmaceutical ingredient and excipients (diclofenac, PLO), 2. Mark-ups, which can be changed at the pharmacy’s discretion for patients without insurance 3. Dispensing fees 4. Hidden repackaging costs (charges associated with a non-compounding pharmacy acquiring compounds from another pharmacy). It is important to note that items 1-3 provide profit to the pharmacy after covering labor and material costs. These findings have important implications for prescribing rheumatologists and patients without adequate insurance who may be exposed to elevated prices without their knowledge. A range of prices from $33.55 to $205.00 a product costing $31.78 to make highlights the need for greater price transparency. Rheumatologists are well-situated as prescribers to advocate on behalf of patients. [1.] Alberta Blue Cross. Reference guide for Alberta pharmacies. 2023. [Internet.] Available from: https://www.ab.bluecross.ca/pdfs/82477-ab-pharmacy-reference-guide.pdf . [2.] Telus Health. Submission and eligibility guidelines for compounds. 2022. [Internet.] Available from: https://page.telushealth.com/rs/655-URY-133/images/supportdoc_compound-eligibility-en.pdf?_ga=2.232875934.1641613068.1625517315-1146326151.1613664105 .