Report: Higher-Priced Drugs Added $2.1B to 2011 Workers’ Comp Pharmacy Costs

April 18, 2012

Unnecessary use of higher-priced medications resulted in nearly all of the $2.1 billion in wasted pharmacy-related spending last year for workers’ compensation payers, according to research published in the 2011 Express Scripts Workers’ Compensation Drug Trend Report.

About 125 million workers are eligible for workers’ compensation benefits in the U.S., and an estimated 4.2 million suffer from a work-related injury or illness each year.

For the first time, the report identifies the different areas of waste and quantifies potential savings for payers that implement and optimize workers’ compensation pharmacy benefit management programs.

The report provides a comprehensive look at overall spending on prescription drugs for the top therapy classes and key issues facing the workers’ compensation industry. The company’s research found:

  • $2 billion of waste resulting from use of higher-cost medications when therapeutically equivalent, lower-cost alternatives are available.
  • $107 million of waste through use of out-of-network pharmacies and third-party billing.
  • $40 million of waste from use of higher-cost delivery channels such as retail pharmacies instead of home delivery for long-term medications used by injured workers.

Express Scripts workers’ compensation clients saw drug trend fall 1.8 percent – the second consecutive annual decline – despite cost per prescription rising 1.5 percent in 2011. The company’s effective utilization management programs helped reduce utilization 3.7 percent. Drug trend is overall pharmacy-related spending and includes cost per prescription and utilization.

“By applying clinical evidence and behavioral science insights to workers’ compensation, we can save billions of dollars and improve health outcomes,” said Tim Pokorney, pharmacist, and clinical director of workers’ compensation at Express Scripts. “It is critical for employers and payers to get a handle on the costs associated with workers’ compensation prescriptions, and we have the solutions to help them to do so, leading to better outcomes for injured workers with minimal disruption.”

At $508, narcotic analgesics had the highest annual cost per user in 2011, accounting for about 38 percent of total drug spending and more than one-third – 34 percent – of total utilization. Cost per user for compounded prescriptions – those that are not available commercially in the strength, dosage, form or exact combination needed by the patient – increased 13.7 percent.

Other key findings include:

  • The top six therapy classes – which include anticonvulsants, anti-inflammatory and dermatological medication in addition to narcotic analgesics – represented 76.2 percent of total drug spending in 2011.
  • Oxycontin had the highest per-user cost and accounted for 10 percent of the total drug spending in 2011.
  • Dermatological medication costs rose 7.4 percent, the highest increase of any therapy class.

Behaviors such as habit or lack of awareness can lead some physicians to continue to choose branded medications over more clinically equivalent, lower-cost generic alternatives. Injured workers may also request the more expensive medication. These behaviors drive up the cost of the workers’ compensation pharmacy benefit. Express Scripts offers Step Therapy programs combined with physician outreach to optimize drug mix for maximum savings.

Source: Express Scripts

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