A major cost component of all employer health plans is the priceof prescription drugs. Most health plans include formularies withtiers for generic and name-brand drugs, and the plans also includeoptions for compounded drugs, defined by the Professional Compounding Centers ofAmerica as medications made based on a practitioner'sprescription in which individual ingredients are mixed together inthe exact strength and dosage form required by the patient. Thecost of compounded medications is also driving up workers'compensation costs across the country.

In the state of Texas, for example, a House committee asked theDivision of Workers' Compensation (DWC) to look at compounded drugprescriptions for injured employees. The division examined its dataon pharmacy billing and an ongoing audit of doctors' practices, andit found that the cost of compounded drugs doubled from 2010 to2014, and the average cost per prescription had risen to $829 in2016.

According to DWC, the numbers were concerning because compoundeddrugs aren't recommended as first-line medications in treatmentguidelines for injured employees. After reviewing DWC's report,members of the House Committee on Business & Industry asked DWCto address the issues through a new rule. In response, DWC recentlyannounced an informal draft rule to require that compounded drugsbe preauthorized.