Workers’ Compensation Drug Trends

By April 14, 2017Commentary

Workers’ compensations systems bear a fair amount of health costs and deal with many of the same cost-management issues that other health care payers do.  As for those other payers, workers’ compensation payers have been concerned about drug costs and abuse, particularly in the treatment of pain, a common workplace condition.  Express Scripts has released on report on the 2016 Workers’ Compensation drug spending and use trend.   (WC Drug Trend Rpt.)    In very good news for the payers it works for, Express Scripts saw a decrease of 7.6% in drug spending from 2015 to 2016.  This decline was composed of a 2.4% lowering of unit prices combined with a 5.9% drop in utilization.  Spending decreased in seven of the top ten spending drug categories.  Some highlights were 53.5% less spending on hepatitis C drugs, as there is competition now in that category and 28.6% less spending on compounded medications.  Some pharmacies have used unnecessary and excessive compounding as a method to avoid cost caps on certain types of medication.  Opioid prescribing is recognized as a national public health issue and according to Express Scripts cost of these medications declined 13.4% in 2016, based largely on declining utilization due to more aggressive tactics to restrain unnecessary prescribing for injured employees.  The problem still appears to be widespread, as slightly over 50% of injured workers had a prescription for an opioid in 2016 and almost a quarter used one for over 30 days.  In some states opioid prescriptions accounted for more than 30% of all workers’ compensation prescriptions.  And the use of opioid antagonists to treat overdoses has also risen significantly.  Techniques that Express Scripts used to reduce drug costs include avoiding physician-dispensed drugs, using preferred pharmacies and maximizing generic use.  Fortunately for workers’ compensation payers, there is very little use of specialty compounds in the segment.  The report also highlights the role that state workers’ compensation regulations, which are often heavily influenced by unions and workers’ compensation-focused providers, plays in inhibiting maximum use of cost and care management techniques, which results in higher spending.  On the other hand, some states have enacted rules helping limit opioid and compounding use.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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