A major cost component of all employer health plans is the price of prescription drugs. Most health plans include formularies with tiers for generic and name-brand drugs, and the plans also include options for compounded drugs, defined by the Professional Compounding Centers of Americaas medications made based on a practitioner’s prescription in which individual ingredients are mixed together in the exact strength and dosage form required by the patient. The cost of compounded medications is also driving up workers’ compensation costs across the country.

In the state of Texas, for example, a House committee asked the Division of Workers’ Compensation (DWC) to look at compounded drug prescriptions for injured employees. The division examined its data on pharmacy billing and an ongoing audit of doctors’ practices, and it found that the cost of compounded drugs doubled from 2010 to 2014, and the average cost per prescription had risen to $829 in 2016.

According to DWC, the numbers were concerning because compounded drugs aren’t recommended as first-line medications in treatment guidelines 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 recently announced an informal draft rule to require that compounded drugs be preauthorized.