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Photograph of pharmacist making compound medicine

How much does a Compound Medication Cost?

The short answer, and I promise that it’s not a cop out is…it depends. Unlike commercial products that are sold at normal retail pharmacies and are produced by large manufacturers, compounds are all made on site at our Collier Compounding Lab location.

There are two primary factors that help determine the cost of a compound: labor cost and ingredient cost.

Labor Cost for Compounds

When determining the labor cost of a compound, the complexity of the final product must be taken into account. The more complex a medication is to make, the longer it typically takes to make it. The longer it takes to make the medication, the more labor cost is associated with the final price of the product.

For example, capsules, troches, and suppositories are all multiple step processes that require more time to complete than do most creams or gels. Therefore on average, capsules, troches, and suppositories will cost more than creams or gels.

Ingredient Cost for Compounds

The ingredient cost is the next important factor in determining the cost of a compound. A lot of compounds have fairly low cost of ingredients, especially if the ingredients are commonly used by the pharmacy.

Just like an individual going grocery shopping, a compounding pharmacy can lower the cost of its ingredients by buying in bulk. However, care must be taken not to over-purchase the ingredient, or it will expire before it can be used, and then the pharmacy loses that cost savings.

If an ingredient is not commonly used by the pharmacy, it may have to be special ordered by the pharmacy for a particular compound. This will inevitably raise the cost of the compound due to the special order, extra shipping costs incurred from chemical suppliers, etc.

Actual Dollar Costs for Compounds

Just like commercial medications, actual dollar amounts can vary substantially. A general range can be anywhere from twenty dollars up to several hundred dollars, again depending on the labor and ingredient costs. However, the majority of compounds for our store fall between $35 and $45.

Does Insurance Cover Compounds?

Unfortunately, most insurances don’t cover the cost of compounds. Actually, less than 30% of compounds are covered by insurance. Of those that pay, most are private insurances provided either through a patient’s employer or purchased separately. Medicare Part D plans and Arkansas Medicaid does not cover compounds.

If your insurance does cover compounds, they are often treated as a brand commercial medication and will typically fall into the 2nd or 3rd tier of copays. Many times, the actual cash price of the compound is less than the copay tier amount the insurance has set up for compounds. In these cases, a claim may be accepted by an insurance company, but the patient pays the full cash price because it is less than what the insurance would have required with a copay.

Here’s an example to help:

A patient’s insurance covers compounds, but has them listed as a tier 3 medication that carries a normal $50 copay. The compound’s cash price is $42.50. The insurance may accept the claim from the pharmacy, but the patient will still pay $42.50 because it is below the $50 amount.

Tips to Maximize Savings for Compounds

1) Ask if they have all the ingredients in stock
Ask the compounding pharmacy if they have all the ingredients in stock to make your compound or if they will have to order something just to use on your medication. If they are going to have to order something just for you, ask if there is a similar ingredient they can use that they wouldn’t have to order. (They will most likely have to call your doctor if they have an alternative, to get authorization for the change.) There may not be an alternative, but if there is, you may save some money because the pharmacy isn’t having to spend more on a chemical just for you.

2) Buy in bulk
If the compound you are prescribed is going to be a new maintenance medication for you, meaning you will continue using it for at least several months, ask the compounding pharmacy if there is a price break for purchasing multiple months of medication at once. Purchasing 2 to 3 months of medication at a time can save you between 10-25% because it helps the compounding pharmacy reduce their labor costs. They will make more medication once, rather than each month you get a refill. The pharmacy may not be able to make multiple months depending on the expiration date of the compound once made, but it’s definitely worth asking.

3) Be open to suggestions
Most pharmacists, by nature, are helpful people. Although it doesn’t necessarily make sense for their business, many pharmacists are willing to suggest a less expensive alternative that will save the patient money. It’s just what we do. As such, ask for a suggestion about a comparable medication that is easier on the pocket book.