5.13 Compounded Prescriptions

General Policy Description

Pharmacare recognizes compounded prescriptions as rational combinations of active ingredients requiring professional judgment and technical skill in their preparation. 

PharmaCare reimburses pharmacies for specific compounds and for compounding costs, up to certain limits.

Policy Details

Compounds eligible for coverage

The compounds on the list of eligible compounds below are PharmaCare benefits when
  • No suitable alternative is available commercially (e.g., different brand, different drug, etc.), and
  • The specific eligibility criteria for the ingredient (as noted below) are met, and
  • The pharmacy has a current medical practitioner's prescription for the compound on file, and
  • The compound is produced by trained staff with appropriate expertise using appropriateand cost-effective ingredients and procedures.

PharmaCare covers other types of compounds (i.e., those not on the list of eligible compounds) only if Special Authority approval is granted before the compound is dispensed.

Important: Unsure if PharmaCare will cover a specific compound? Please contact the PharmaNet Help Desk for clarification before submitting the claim on PharmaNet.

Eligible compounds list
Eligible compound Criteria for coverage
Oral solutions N/A
Oral suspensions Oral suspensions are a benefit only
  • for a pediatric or adult patient who cannot swallow tablets/capsules due to age or disability (includes J/G tube patients); OR. 
  • for pediatric patients only, when the prescribed dosage is not available commercially or cannot be achieved safely by modifying a commercial product; AND 
  • when a specific compound benefit PIN has been assigned by Pharma Care for the active ingredient or particular combination of active ingredients. Refer to Compounded Prescription PINs
The active ingredient(s) must be a PharmaCare benefit in another oral form or the patient must have a current Special Authority in place for the active ingredient(s).
Pharmacists must document, on the original prescription, the reason the patient requires a suspension.
Dermatological compounds GENERAL CRITERIA—Dermatological compounds are a benefit when all of the following conditions are met:
  • The active ingredients are prescribed by a medical practitioner
  • The active ingredients are on the list of eligible active ingredients
  • Any specific coverage criteria for each active ingredient is met
  • The active ingredients are compounded into an eligible base
  • A specific compound benefit PIN has been assigned by PharmaCare for the active ingredient or particular combination of active ingredients. Refer to Compounded Prescription PINs
Important: Transdermal compounds are not a benefit.
Topical antifungals Topical antifungal compounds are a benefit only if the patient has a current Special Authority for the specific active ingredient.
Retinoic acid Retinoic acid compounds are a benefit only if the patient has a current Special Authority for the specific active ingredient.
Preservative-free sterile eye drops Preservative-free sterile eye drops are a benefit when:
  • Prescribed by an ophthalmologist due to a patient allergy to preservatives in commercially available prescription eye drops;
    AND
  • A specific compound benefit PIN has been assigned by PharmaCare for the active ingredient or particular combination of active ingredients. Refer to Compounded Prescription PINs
The prescriber must verify on the original prescription that there has been a significant allergic reaction and identify the ingredient suspected of triggering the reaction.
Plan P injectable analgesics–CADD pumps The required repackaging of a prescribed injectable Plan P benefit medication(s) into a continuous ambulatory delivery device (CADD) pump is a compound benefit when the patient is registered under the PharmaCare Palliative Care Drug Plan (Plan P).
Plan P intrathecal analgesics Intrathecal analgesic compounds are a benefit for patients registered under the PharmaCare Palliative Care Drug Plan (Plan P).

Dermatological compounds—eligible active ingredients and criteria for coverage

Dermatological copounds
Eligible Active Ingredient Coverage Criteria
Anthralin For psoriasis, eczema, and other severe dermatological conditions
Camphor Only when in combination with at least one prescription, benefit ingredient
Clindamycin in Duonalc™ Only clindamycin in Duonalc™ is a benefit; clindamycin in Reversa™ or any other over‑the-counter medicated base is not a benefit.
Coal Tar None
Corticosteroids Only when used as additives or as a medicated benefit base (e.g., hydrocortisone, betamethasone, clobetasol)
Preparations containing a corticosteroid compounded with a non-benefit or over‑the‑counter medicated product are not benefits.
Erythromycin None
Liquor Carbonis Detergens (LCD) None
Menthol Only in combination with at least one prescription, benefit ingredient
Metronidazole None
Salicylic acid For psoriasis, eczema, and other severe dermatological conditions
Sulfur, sulfacetamide When added to, or combined with, a medicated benefit base

Dermatological compounds—eligible non-medicated bases

  • Aquaphor™
  • Aquatain™
  • Cetaphil®
  • Cliniderm™
  • Cold cream
  • Complex 15™
  • Dermabase™
  • Dilusol™
  • Dormer™
  • Duonalc™
  • Emollient cream
  • Eucerin™
  • Glaxal™
  • Hydrophilic petrolatum +/- 25% water
  • Lanolin
  • Lubriderm®
  • Medi-Derm™
  • Moisturel™
  • Neutrogena®
  • Nutraderm™
  • Spectro Gel™
  • Unibase®
  • Vanishing cream
  • Vaseline™

Important: If a non-medicated base is not listed above, please contact the PharmaNet Help Desk to determine whether the base is eligible for coverage before submitting a claim.

PharmaCare does not cover compounds containing non-benefit ingredients.

If a compound is not eligible for PharmaCare coverage but is claimed using a Product Identification Number (PIN) for a benefit compound, the claim is subject to recovery upon audit.

Important: Unsure if PharmaCare will cover a specific compound? Please contact the PharmaNet Help Desk for clarification before submitting the claim on PharmaNet.

PharmaCare does not cover compounds intended to replace commercially available products that have been discontinued by the manufacturer even if the commercial product was a benefit.

Special Authority coverage for compounds to replace discontinued products may be requested only after the patient’s medical practitioner has:

  • Reassessed the patient’s need for that specific drug and dosage form, and
  • Has contacted Health Canada’s Special Access Programme to see if the product is available through that route.

PharmaCare does not automatically cover compounds intended to replace products unavailable due to a manufacturer shortage. When notified of a shortage, PharmaCare will first verify the shortage and expected duration of the shortage with the manufacturer.

If a shortage is expected to last for an extended period of time, PharmaCare normally establishes a specific PIN and maximum price in PharmaNet for replacement compounds. Replacement compounds can then be claimed using these PINs for the duration of the shortage. The submission of Special Authority requests is not required if a specific PIN has been assigned.

Important: The PIN assigned must be in place before a claim is submitted.

If PharmaCare has not assigned a specific PIN for a replacement compound, prior Special Authority approval is required.

Information about current manufacturer drug shortages and the replacement products PharmaCare is covering (including compounds) is available by calling the PharmaNet Help Desk.

PharmaCare recognizes that there may be exceptional, “last resort” circumstances in which coverage of non‑benefit compounds is justified.

Special Authority approval is required for PharmaCare coverage of non-benefit compound prescriptions.

>> See Submitting a Special Authority Request for a compound at the end of this section.

Such requests are reviewed on a case-by-case basis.

PharmaCare may approve full, partial or no coverage for a Special Authority request.

If Special Authority coverage for a compound is approved, PharmaCare provides the pharmacy with a specific PIN that must be used when submitting the claim.

Pharmacies are required to submit a HLTH 5425 - Compound Costing Worksheet (PDF, 521KB) for compounds that require Special Authority approval.

A copy of the approved Compound Costing Worksheet must be retained on file with the original prescription.

The maximum allowable compounding fees that PharmaCare will reimburse are specified below.
If a compound does not appear on the schedule of maximum allowable compounding fees below, PharmaCare Special Authority will review compounding costs on a case-by-case basis and determine an appropriate compounding fee.  

Compounding fees must be added to the ingredient costs, and the combined amount entered in the Drug Cost field of PharmaNet. Do not include the compounding fee in the Dispensing Fee field.

Compounding fees in excess of PharmaCare maximums—or the amount approved by Special Authority—must not be claimed in the Drug Cost field. Upcharges on compounding fees must be entered in the Cost Upcharge field so that the amount becomes payable by the patient or their alternate insurer.

Important: The table below establishes maximum fees for both benefit compounds and for compounds approved via the Special Authority process that would otherwise be a non-benefit. The inclusion of a fee for a particular type of compound in the schedule below, therefore, does not necessarily confer benefit status.

Compound Maximum Allowable Compound Fee
Oral solutions $20.00
Oral suspensions $20.00
Capsules $0.30 per capsule
Suppositories $40.00 *
Oral lozenges $40.00 *
CADD injections $20.00
Sterile IV, IM, SC injections $20.00
Intrathecal injections $40.00
Creams/ointments/lotions: < or = 250 gm/mL $15.00
Creams/ointments/lotions: > or = 251 gm/mL $20.00
Sterile eye drops, preservative-free $30.00

* Where appropriate (e.g., when the prescription will be dispensed on a frequent, short days’ supply basis), the compounding fee for suppositories and oral lozenges will be pro-rated during Special Authority adjudication.

Relationship of Compounding Fees to Dispensing Fees

Pharmacies can claim both their usual dispensing fee and a compounding fee.

Ingredient costs for compounds are subject to all PharmaCare Pricing Policies.

Ingredient costs for commercial products must be claimed at the lowest of any pricing policy applicable to the product (e.g., the Maximum Pricing Policy, Low Cost Alternative Program, Reference Drug Program).

>> For more information on pricing policies, see section 5 of the policy manual.

Raw ingredients are subject to the Actual Acquisition Cost Policy.

PharmaCare expects pharmacies to use the most reasonably priced ingredients when compounding PharmaCare benefits. For example:

  • omeprazole—use powder versus capsules
  • sodium bicarbonate—use powder and water vs. sodium bicarbonate injectible for oral/topical products that do not require sterility.

PharmaCare covers the cost of the following supplies and equipment:

  • required supplies and special packaging such as gelatin capsules, cassettes/bags/syringes for administration devices, IV bags, adapta-caps, EMP jars.
  • disposable, required supplies and equipment applicable to a particular compound claim, such as weighing boats, syringes, filters, needles for compounding/measuring.

Reimbursement for eligible supplies and equipment is subject to the Actual Acquisition Cost Policy.

>> For more information on the Actual Acquisition Cost Policy, see section 5.7 of this manual.

  • The following costs are not covered: Charges for equipment use, lab fees, pH metre fees, etc., as well as the cost of gowns, booties, and similar items.

Enter claims for prescription compounds using the applicable benefit or non-benefit compound PIN.

Claims for non-benefit compounds that are submitted using a PIN for a benefit compound are subject to recovery upon audit.

For the list of current PINs, refer to the Compounded Prescriptions PINs page.

Important: When Special Authority coverage for a compound is approved, PharmaCare will provide the pharmacy with a specific PIN for use when submitting the claim. Pharmacists must use that specific PIN when submitting the claim to PharmaNet.

When a pharmacy contracts another pharmacy to provide a compound for individual prescriptions, the dispensing pharmacy may not claim more than is permitted under the PharmaCare Compounded Prescriptions policy.

When determining if contracting this service is appropriate, the dispensing pharmacy should ensure the contracted pharmacy will provide the compound at a cost within PharmaCare policy limits.

[Clarification as of February 28, 2013] If a pharmacy contracts another pharmacy to provide a compound, the pharmacy must ask the compounding pharmacy for a cost breakdown and must retain that cost breakdown on file in keeping with the record keeping requirements below.

For benefit compounds: Pharmacies must document the following information and retain it on file with the original prescription:

  • The compound ingredients and their concentration, dosage form and quantity
  • The itemized cost of each ingredient and total ingredient costs
  • The itemized supply and equipment costs and total costs
  • The compounding fee

This information may be recorded on the prescription or on a separate document attached to the prescription. The HLTH 5425 - Compound Costing Worksheet (PDF, 521KB) may be used for this purpose.

[Clarification as of February 28, 2013] If a change in costs occurs for a refill of a compound, pharmacies must complete and retain a new compound costing document, including all the information above.

For compounds requiring Special Authority: Pharmacies must retain on file with the original prescription a copy of the HLTH 5425 - Compound Costing Worksheet (PDF, 521KB) approved during Special Authority adjudication.

 

Procedures for Pharmacists

When submitting a claim for a compound:

  • In the Drug Cost field, enter the combined amount for:
    • eligible ingredient costs, plus
    • eligible compounding fee, plus
    • eligible equipment and supply costs.

Do not add the compounding fee to the Dispensing Fee field.

  • In the Dispensing Fee field, enter your usual dispensing fee.
  • In the Upcharge field, enter any portion of the compounding fee, ingredient costs, or supply/equipment costs that exceeds PharmaCare reimbursement maximums or the amounts approved by Special Authority.

These amounts will then be payable by the patient or their alternate insurer.

  1. Enter the appropriate benefit PIN from the Compounded Prescription PINs or the specific PIN provided for a Special Authority compound.
  2. To ensure complete information regarding a compounded prescription is visible to other healthcare providers using PharmaNet for patient care purposes, the following information must be entered at the beginning of the Directions for Use (SIG) field: 
  • If the PIN description identifies the active ingredient(s): Enter the dose and/or concentration along with the directions for use.
  • If the PIN description does not adequately identify the active ingredient: Enter the active ingredient(s), the dose and/or concentration, along with the directions for use.

Please see examples for specific compound types below.

BENEFIT COMPOUND SUSPENSIONS

Benefit compound PINs are drug/dosage form specific. To ensure the dose and concentration is visible to other PharmaNet users, enter it exactly as indicated in the example below:

Prescription

felodipine 10 mg (in suspension) once daily.

PIN

22123241

Description on PharmaNet

felodipine compounded suspension

Directions to be entered in SIG field

Take 5 mL (10 mg) once daily

PALLIATIVE BENEFIT CADD PUMP COMPOUNDS

CADD pumps PINs specify whether or not the ingredient is narcotic. The dose is usually included in the directions of the prescription. To identify the specific drug being used, it must be entered as indicated in the example below.

Prescription

hydromorphone 20 mg/mL for CADD. 3.5 mg/hr and 7 mg BTP q20min.

PIN

22123288

Description on PharmaNet

narcotic CADD pump compound: palliative

Directions to be entered in SIG field

Run 3.5 mg/hr (hydromorphone) and 7 mg for BTP every 20 min

BENEFIT DERMATOLOGICAL COMPOUNDS

PINs for these medications identify the ingredient or class of ingredients. It is not mandatory that a pharmacist enter the specific corticosteroid or concentration of ingredients. See example below.

Prescription

HC 1% + menthol 0.25% cream. BID.

PIN

22123278

Description on PharmaNet

corticosteroid + menthol +/or camphor

Directions to be entered in SIG field

No change in entry required. Enter usual directions for use.

BENEFIT COMPOUNDED PRESERVATIVE-FREE EYEDROPS

PINS for eyedrops identify the active ingredient and that the eyedrops are preservative-free. Add the concentration of the eyedrops to the directions as indicated in the example below.

Prescription

timolol 0.25% preservative-free eyedrops. 1 gtt BID.

PIN

22123295

Description on PharmaNet

timolol PF cpd eyedrop

Directions to be entered in SIG field

Instil 1 drop (0.25%) in left eye twice daily.

PALLIATIVE BENEFIT COMPOUNDED INTRATHECAL INJECTIONS

Due to wide variation in ingredients and in concentration of ingredients, the PINs give only a general description. It is not necessary to add information to the usual instructions for use. See example below.

Prescription

Intrathecal fentanyl 1000 mcg + bupivicaine 40 mcg + clonidine 100 mcg/mL

PIN

22123302

Description on PharmaNet

narcotic + non-narcotic intrathecal cpd: palliative

Directions to be entered in SIG field

No change in entry required. Enter usual directions for use.

Important: Ensure you retain on file with the original prescription the information required in support of compound claims (see Recordkeeping Requirements).

To obtain Special Authority approval for extraordinary coverage, the following documentation is needed:

>> From a medical practitioner:

  • A completed General Special Authority Request indicating: 
    • the compound prescribed
    • why the compound is required for the particular patient
    • the name of the compounding pharmacy (so that PharmaCare can contact the pharmacy)

Palliative care compounds: A copy of the prescription may suffice as supporting documentation for Special Authority requests for certain palliative care compounds. Contact the PharmaNet Help Desk to determine the documents required for particular palliative care compounds.

>> From a pharmacy:

  • A HLTH 5425 - Compound Costing Worksheet (PDF, 521KB) including: 
    • drug, concentration, dosage form, and quantity
    • itemized cost of each ingredient
    • itemized supply and equipment costs
    • days’ supply
    • the time required to compound (actual, active compounding time only. Do not include set‑up, cleaning, or administrative time.)

Important: Retain a copy of the Compound Costing Worksheet on file with the prescription.

  • Wait for PharmaCare Special Authority approval before dispensing the compound.
  • When PharmaCare receives the Special Authority Request and cost breakdown, it will decide the amount, if any, that is eligible for PharmaCare coverage.
  • PharmaCare will advise the
    • prescriber of Special Authority approval or denial.
    • pharmacy of the amount eligible for PharmaCare coverage and the specific PIN to be used when submitting the claim

If a pharmacy submits multiple claims for compounded prescriptions on the same day using the same PIN for different preparations for the same PHN, PharmaNet cannot determine that they are separate prescriptions and will reject them (PharmaNet will interpret them as an error).

To prevent rejection of multiple legitimate same-day/same PHN claims for compounds, submit the claim with the Intervention Code UF (“Patient Gave Adequate Explanation. Rx filled as written”).

 

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