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Annual Survey Reveals Increase in Drug Spend in Workers’ Compensation for 2014

Posted on: October 22, 2015 by Caitlin Morgan

Prescription drugs have become a key factor in workers’ compensation. Accounting for one of every six medical dollars, pharmacy’s impact on disability duration, return to work and claim settlement outweighs the benefit’s dollar expense. The extent of this issue is revealed in the 12th Annual CompPharma Survey of Prescription Drug Management in Workers’ Compensation, which recently released its findings, reporting an increase of 6.4% in 2014 drug spend. CompPharma, LLC is a consortium of workers’ compensation PBMs active in workers’ compensation.

“This increase is likely due as much to drugs’ impact on claim duration and total cost as it is to the price of drugs,” said CompPharma’s President Joseph Paduda. Moreover, Paduda cites that the increase is significant especially in light of last year’s survey showing a 3.8% decrease in drug spend.

In fact, this was the first increase since 2009, when payers reported an increase of 9.4%.

Respondents cited prescribing behavior, narcotics and the growth in prescriptions for compounds as the main cost drivers.

During the past several years long-term opioid use has become the single biggest concern identified by respondents. Some respondents voiced concerns over the FDA’s apparent willingness to increase the availability of opioids. The introduction of “abuse-deterrent” opioids and evidence of some patients’ determination to overcome their deterrent components were discussed, according to the report. In addition, payers remain extremely concerned about opioid dependency and addiction.

Also on payers’ radars is physician dispensing, driven by their own experiences and research results from the California Workers’ Compensation Institute (CWCI), Johns Hopkins University and Accident Fund Holdings, Inc., National Council on Compensation Insurance (NCCI), and the Workers’ Compensation Research Institute (WCRI). The main issue involved patient safety, including the fear that injured workers may take duplicative or very similar drugs or more opioids and have longer claims durations. Physician dispensing also drastically and artificially inflates the cost of workers’ compensation pharmacy costs. Physician-dispensed prescriptions typically cost three to ten times the amount of the same prescription filled by a retail pharmacy, according to the report.

“Continuing a pattern we’ve seen for years, payers remain quite concerned about pharmacy,” Paduda said. “This is likely due as much to drugs’ impact on claim duration and total cost as it is to the price of drugs.”

Caitlin Morgan specializes in offering Workers’ Compensation insurance and will continue to provide you with relevant issues regarding this space. For information about our Workers’ Comp solutions, please contact us at 877.226.1027.


Posted in: blog Workers Comp