Compounded medications are generally not covered by most commercial insurance plans or Medicare, regardless of whether they are prepared by a 503A pharmacy or a 503B outsourcing facility. This limited coverage is primarily due to concerns about safety, efficacy, high costs, and the lack of FDA approval for compounded products.[1-2] Insurers and pharmacy benefit managers have instituted policies to restrict or exclude claims for compounded medications, and compounded drugs represent a small fraction of total prescriptions but a disproportionately high cost per prescription.[1]
There is no evidence in the medical literature that insurance coverage differs systematically between medications compounded by 503A pharmacies versus 503B outsourcing facilities. Both types of compounded medications face similar coverage restrictions, as payers do not distinguish between the two in their exclusion policies. In public health systems, such as workers’ compensation programs, compounded medications may be reimbursed under specific billing regulations, but these are exceptions and not the norm in commercial insurance.[2]
In summary, insurance coverage for compounded medications is limited and does not differ based on whether the medication is compounded by a 503A pharmacy or a 503B outsourcing facility.[1-2] Coverage decisions are driven by payer policies and regulatory status, not by the type of compounding facility.