Frequently Asked Questions About Pharmacy Compounds

What is pharmacy compounding?
Pharmacies make compounded medicines when an individual patient has needs that commercial products can’t meet. For example, many medicines are available only in adult doses. If a child needs a lower dose, a pharmacy could make a low-dose compound.
What are the risks and benefits of pharmacy compounding?
All of the ingredients in commercial medicines are tested together to get approved by the U.S. Food and Drug Administration (FDA). These tests establish safety, effectiveness, stability, good absorption and elimination. The FDA also inspects drug manufacturing facilities to assure quality and purity. The FDA does not monitor local pharmacies for each compound they make. There is no information about what happens when ingredients are mixed. Nor is there evidence about how well the medicines absorb, or the frequency and severity of side effects. 
How did the university determine its requirements for covering compounds?
The plan recognizes that some patients may require treatment with a customized compounded medication. The plan covers pharmacy compounds only when evidence of effectiveness and safety of the mixture is available from a reliable source, such as a structured study published in a peer-reviewed scientific communication. 
Why doesn’t the university cover compounded medications that contain bulk chemicals?
By themselves, bulk chemicals are not reviewed or approved by FDA. There is no good information about how well they work or how safe they are when used in a compound medicine.
Why doesn’t the university cover compounded pain medication?
FDA approved creams and patches are available to manage pain. Compounded pain products are prescribed in a wide variety of combinations that often contain bulk chemicals. There is no information about how these ingredients work when they are mixed together.
Why doesn’t the university cover compounded hormone replacement products?
A number of FDA approved hormone replacement products are available. There is no evidence that individually compounded hormone products are better than FDA approved medications. In fact, there is evidence that compounded hormones are not consistently absorbed. Consistent absorption is critical to assure that these hormones work and are safe.


Please be advised that the University of Michigan Prescription Drug Plan formulary is updated periodically and changes may appear prior to their effective date to allow for client notification. The University of Michigan does not warrant or assure accuracy of such information nor is it intended to be comprehensive in nature. The medical provider should consult the drug manufacturer's product literature or standard references for more detailed information. Every effort is made to ensure complete and accurate information; however, the most accurate source of medication coverage and member cost is the Magellan Rx pricing tool. The pricing tool will not provide cost estimates for the product selection penalty or medications that require prior authorization.