As a May 1 deadline approaches for Tricare to place new controls on compounded medication prescriptions, some compounding pharmacies have launched aggressive marketing campaigns to bill the Pentagon for millions of dollars.
In what initially seemed to be a phone phishing scam to get personal information from Tricare beneficiaries, compound pharmacy marketers have been cold-calling military families and retirees to persuade them to apply for specialty prescriptions like pain creams, wound ointments and erectile dysfunction medications.
The companies also are trolling for sales staff and Tricare beneficiaries on Craigslist and setting up shop on and around military bases to sell these medications.
Tricare officials say the beneficiaries are receiving calls or direct requests from sales representatives who ask whether patients have certain medical conditions, and, if so, if they are interested in compound medications.
They then ask the patients to complete forms and provide their sponsor's Social Security number to initiate the prescriptions while they bill Tricare.
Such medications can range in cost from a few hundred dollars to more than $9,000 per prescription.
The Defense Health Agency has seen reimbursements for compounded medications skyrocket in the past decade. In 2004, Tricare paid $5 million for these medicines. In just the first three months of this year, the Defense Health Agency was billed more than $700 million for the drugs.
"Compounds by definition are supposed to be individualized therapy for an individual patient's needs," said George Jones, Tricare's pharmacy chief. "It's been difficult to believe that's what's truly going on when there are printed recipes and standard formulas [being sold]."
The extreme sales tactics have gone far beyond phone calls.
At Joint Base San Antonio this week, a compound drug marketer set up a food truck outside the main gate at Fort Sam Houston, promising free lunch to Tricare beneficiaries who signed up for medications, according to documents obtained by Military Times.
Marketing materials distributed by the pharmacy representatives at the truck claim the products are "For Military Only, Approved by Tricare." They tout a website, soldierscripts.com, where Tricare beneficiaries can log on and order medications.
Representatives listed on the marketing materials and on the website did not return phone calls from Military Times.
"We are looking at putting out a notice to the post populations that these people are seeking personal information and to be mindful. This company is not operating under any invitation from anyone here at Joint Base San Antonio," spokeswoman Karla Gonzalez said.
Company representatives have been caught soliciting beneficiaries inside military hospital pharmacies and at exchanges and commissaries, according to Jones.
Marketers also are using Craigslist to search for sales reps and customers.
One advertisement posted April 7 in Houston calls the medications "a free fringe benefit for Tricare customers."
"Hand crafted for every individual, the products are specially designed to help our servicemen and women cope with everything from PTSD, anxiety, chronic pain and scars," the ad reads.
Another sales rep, who claimed to be the spouse of a military health care provider, was searching on Craigslist for "charismatic, outgoing people with military ties" to help him sell the medications in San Antonio.
"Ideally, I'd like military spouses or active duty members to join my team that have a huge circle of friends with Tricare," wrote the advertiser, who did not respond to a Military Times request for comment.
Industry advocates say the vast majority of compounding pharmacies are small companies whose operators want to help patients and get paid a fair price.
But a host of factors, including changing regulations and reimbursements and "simple unscrupulous business practices" have contributed to the industry "developing a reputation akin to the Wild West," said David Ott, CEO of United Compounding Management, a network of accredited pharmacies.
"A minority of bad actors have given compounding a bad name and made new management strategies a necessity," Ott said in a recent editorial in The Hill newspaper.
Starting May 1, Defense Department pharmacy contractor Express Scripts will screen each ingredient in these medications to ensure that all substances comply with Food and Drug Administration regulations.
Those with allowable ingredients will be covered by Tricare. Those with unacceptable additives either will need to be reformulated or require prior approval for coverage.
The change likely will make many of these new prescriptions ineligible for reimbursement.
"We have developed a process that leverages the technology as much as we can ... and developed a set of criteria to ensure the safety of our patients while also ensuring that Tricare can pay for the ingredients," Jones said.
Until then, companies surely will continue to press for new customers.
Tricare officials say beneficiaries should never provide personal information, including birth date, Social Security numbers or bank information, over the phone.
If they receive a call, they should contact Express Scripts at (866) 216-7096 or by email, fraudtip@express-scripts.com.
"Tricare will never call beneficiaries and ask for personal information," said Defense Health Agency spokesman Kevin Dwyer.
Patricia Kime is a senior writer covering military and veterans health care, medicine and personnel issues.
