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Compounded Drugs: TRICARE's Payment Practices Should Be More Consistent with Regulations


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DOD offers comprehensive health care coveragepharmacy and medical benefitsto eligible beneficiaries through its TRICARE program. As part of its benefits package, TRICARE pays for compounded drugs. Traditionally, a drug is compounded through the process of mixing, combining, or altering ingredients, to create a customized drug tailored to the medical needs of an individual patient upon receipt of a prescription. Concerns exist about the safety and the rising costs of compounded drugs. The National Defense Authorization Act for Fiscal Year 2014, mandated that GAO review TRICAREs payment for compounded drugs. For this report, GAO examined (1) the number and cost of compounded drugs paid for by TRICARE in fiscal year 2013, and (2) TRICAREs payment practices for compounded drugs and how they compare to other federal health care programs. GAO reviewed and analyzed TRICARE data on compounded drugs and reviewed, analyzed, and compared federal laws, regulations, and other documents pertaining to pharmacy and medical benefits under TRICARE, Medicare, and the VA health care system. GAO also interviewed program and contractor officials. GAO recommends that DOD align TRICAREs payment practices for compounded drugs with applicable regulations governing the TRICARE program. DOD concurred with GAOs recommendation and VA generally agreed with GAOs conclusions. HHS and VA provided technical comments that GAO incorporated as appropriate.



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