Opioids, MD dispensing drive workers’ comp pharmacy costs

January 14, 2013

Opioid use and physician dispensing top the list of cost drivers for workers’ compensation pharmacy programs across the country.

            Opioid use and physician dispensing top the list of cost drivers for workers’ compensation pharmacy programs across the country. Most workers’ compensation programs have instituted programs to manage opioid use and abuse. But physician dispensing of repackaged drugs is beyond control in some states.

            “The god of Mammon [god of excess] has affected physician prescribing patterns,” said industry consultant Joseph Paduda, principal of Health Strategy Associates and president of CompPharma, which conducts an annual survey of prescription drug management in workers’ compensation programs nationwide. “Over one third of workers compensation drug dollars are going to physician dispensing. That represents about $1.5 billion annually. Physicians sell repackaged drugs at up to eight times the typical community pharmacy cost for the same product.”

            Physician dispensing raisers four specific concerns, Paduda said. Number one is patient safety because physician-dispensed products rarely go through drug utilization review. The number two concern is increased costs since physicians typically dispense repackaged products that are significantly more expensive than the same prescriptions filled at a retail pharmacy.

            The number three concern is extended duration of disability because of lack of oversight, followed by higher overall medical costs.

            Workers’ compensation is a particularly difficult area to control because state programs typically offer first dollar coverage, Paduda explained. Most states do not use tiers, formularies, copays, or other pharmacy benefit management tools in their workers’ compensation Rx programs.

            Opioid use in particular has surged in workers’ compensation programs. About 85% of all workers’ compensation scripts are for acute or chronic pain management, he said. The vast majority of workers’ compensation claims involve musculoskeletal injury or pain.

            Some states, notably Texas and Washington, have made significant strides in reducing opioid misuse by implementing a closed formulary, strict medical guidelines, and rigorous enforcement for workers’ compensation. But many states have taken little action to curtail opioid abuse in workers’ compensation, which Paduda called “addiction creation programs.”