main banner


TRICARE, the health care program serving Uniformed Service members, retirees and their families worldwide, recently announced that they will no longer pay for compounded medications that use APIs. We believe that compounded medications serve a valuable medical need by providing patients and their practitioners with a therapeutic alternative when manufactured drugs have not worked. It’s critical that pharmacists, patients and practitioners make their voices heard so that compounding remains a viable option for our uniformed service members.

NEW: Oct. 2 — GAO Releases Report on TRICARE’S Payment Practices for Compounded Drugs

As you may recall, the fiscal year 2014 Defense Authorization Act included a provision requiring GAO to review TRICARE’s payment practices for compounded drugs.

According to GAO, the report examines:

  1. The number and cost of compounded drugs paid for by TRICARE in fiscal year 2013, and
  2. TRICARE’s payment practices for compounded drugs and how they compare to other federal health care programs.

GAO’s Recommendation:

“To help ensure TRICARE’s payment practices for compounded drugs are consistent with its regulations, we recommend that the Secretary of Defense align TRICARE’s payment practices for compounded drugs with applicable regulations governing the TRICARE program. This may include considering whether to amend TRICARE’s regulations to explicitly allow payment for some or all bulk drug substances in compounded drugs.”

Additional Background

In July 2013 Tricare officials began notifying beneficiaries that medications containing a bulk chemical or bulk powder will no longer be covered by Tricare, effective that month. Following concerns from patients and stakeholders, Tricare initially announced a 180 day delay in the proposed reimbursement change. This delay was again extended following passage and implementation of the Drug Quality and Security Act, and a final decision could come this year.

In addition, this summer the Senate Armed Services Committee included language in its fiscal year 2015 Defense Authorization bill that allows for provisional Tricare coverage for certain health care products and services that “have not been demonstrated to be safe and effective.” Companion language is not included in the House proposal, so differences must be worked out in a conference between the bodies which could happen later this year.

DOD’s response to GAO’s recommendation references this bill language in the pending Defense Authorization Act and indicates that if enacted it would help shape DOD’s approach to reimbursement policies, along with continued monitoring of the implementation of the Drug Quality and Security Act.


In June 2013, Express Scripts (ESI) sent a letter to all TRICARE beneficiaries receiving compounded medications that their prescriptions would no longer be reimbursed, effective July 24th, 2013. Many of these letters list what ingredients that will no longer be reimbursed, but ESI clarified their position in an e-mail to pharmacy providers on June 26, 2013 that “Pharmacies may not be reimbursed for non-FDA approved ingredients used in the compounding of a prescription drug, including bulk chemicals.” By their very definition, bulk drug chemicals and inactive ingredients cannot go through an FDA approval process. Therefore, many of the ingredients that go into making a compounded medication for a patient will not be reimbursed for these patients.

What other members have done to make their voices heard

Some PCCA members have taken the initiative to start letting their patients know that their voice can be heard.

  • In Florida, a member contacted her local newspaper and television stations to let them know that retired military service members and their families will be negatively affected by this decision. This member found out, by talking to her patients, that putting patients in contact with their Senators would be a good start in trying to overturn this decision. A local TV station came out and did a story, featuring the pharmacy, the owner, and one of the affected patients.
  • Other members are using the power of to leverage both advocacy efforts simultaneously – letting their patients know to personally write their Senators and Representatives regarding the TRICARE issue while at the same time, contacting their legislators about Senate Bill 959.

PCCA is working to find the best person to contact regarding this change in policy by TRICARE. In the meantime, please use the contact information below to send messages, e-mails, and phone calls to TRICARE and Department of Defense, letting them know how your practice and your patients will be negatively affected by this new policy.


There are approximately 25 commercially manufactured drugs on the market today, which have never been through the FDA approval process. These drugs existed in the marketplace before the FDA’s New Drug Approval Process was implemented and therefore were “grandfathered”. The FDA allowed the pharmaceutical manufacturers to continue to make them, even though they have never been proven safe and effective. Many insurance companies, including ESI, reimburse for these medications. Therefore, not reimbursing for bulk drugs powders and inactives because they are not FDA approved, yet reimbursing for these “grandfathered” drug products, show that the insurance companies are applying an inconsistent policy in regards to prescription reimbursement.

What you can do now

Contact TRICARE, the Department of Defense (Military Healthcare), and your state insurance commission.

    • TRICARE Telephone Numbers:
      • North Region – 877-874-2273
      • South Region – 800-444-5445
      • West Region – 877-988-9378
      • To get more information about TRICARE Contact Telephone numbers click here.
    • Email TRICARE – By e-mail
    • NEW Submit an appeal to TRICARE
      • Any customer whom carries TRICARE Insurance that is dissatisfied with the recent changes regarding compounded prescriptions may take the following measures:
        1. Call (877) 363-1303 and request to speak with a Customer Advocate if you have any questions or if you would like to register a complaint.
        2. In addition to entering a complaint with TRICARE Pharmacy, you also have the option to go through an Appeals Process to have an exemption made on your behalf. Upon approval, TRICARE would continue to cover your necessary compounded prescription.
      • You will need to either fax or mail the following information:
        • A letter notifying TRICARE that you are authorizing your physician to appeal on your behalf.
        • A letter from your physician detailing the medical necessity for the medication as well as an explanation of why you (the patient) need the prescription compounded.
        • Also include pertinent information about yourself (Name, Account #, Address, Phone #, Physician Info, etc.)
        • The appeals process can take up to 90 days – in order to expedite the process, all information above should be included together upon sending.
      • The fax and mail information to begin the appeals process is included below:
        • Mail to:
          Express Scripts, Inc.
          P.O. Box 60903
          Phoenix, AZ 85082-0903
        • Fax to: (866) 374-5545
    • Contact the Department of Defense
      • Under “Select a Topic” use the drop down menu and select the “Department of Defense Military Healthcare/TRICARE
    • Send a letter to Jonathan Woodson, the Assistant Secretary of Defense for Health Affairs
    • Talk to your state insurance commission and let them know how TRICARE will affect your community and practice
    • NEW Download, print and distribute this Handout about TRICARE to military personnel and others who may be affected. NOTE: Two handouts print on an 8.5″ x 11″ sheet.
    • NEW Use your social media channels to inform others about TRICARE’s decision. Following are sample posts and a graphic you can share
TRICARE, the health care program serving Uniformed Service members, retirees and their families worldwide is discontinuing coverage of personalized medicine. Don’t let it happen! Go to:

TRICARE, the health care program serving Uniformed Service members, retirees and their families worldwide is discontinuing coverage of personalized medicine. Don’t let it happen! Go to: