Commentary: Workers’ Comp Can Benefit From Drug Formularies

By Brian Allen, Mitchell VP of Government Affairs | March 27, 2018

With issues like the opioid crisis and inflating drug costs at the forefront of discussion in workers’ compensation, several states, including Indiana and Pennsylvania, are currently considering legislation to establish workers’ compensation drug formularies. Some debate has arisen as to whether these drug formularies are effective and appropriate in the care of injured workers. To address these questions, let’s take a look at the purpose of a drug formulary in the workers’ compensation system and the positive results that some states have seen.

At its core, a workers’ compensation drug formulary is a list of preferred medications that can be prescribed without pre-authorization. The list also includes other medications or combinations of medications that require additional authorization before they can be prescribed or dispensed.

The purpose of this list is to ensure that injured workers are getting the correct care for their injuries. Many issues have motivated the implementation of formularies in various states, including the opioid crisis and rising drug costs. Although only a handful of states have established statewide formularies to date, the results from these states have given credence to the ability of formularies to address these major concerns.

With so many thousands of medications available to prescribe, formularies help guide physicians on what is best to treat certain injuries. By giving physicians guidance on what is best, issues such as over-prescribing, opioid use and costs can all be reduced.

States have a few different options when developing formularies. Some states have opted to adopt commercially available guidelines, either the Official Disability Guidelines (ODG) or American College of Occupational and Environmental Medicine (ACOEM), which are based off years of medical science and evidence. Other states, such as Ohio, have developed their own evidence-based formularies specific to their state. Additionally, states typically create pharmaceutical committees comprised of medical professionals to review the proposed drug formularies before implementing.

Importantly, workers’ compensation drug formularies are different from other formularies that states may create, such as Medicaid or commercial health formularies. Allen says that the outcome expectations for a workers’ compensation formulary are different from that of other formularies. The trade-off for the injured worker in the work comp system is to try to get them back to the best health possible.

Because a high percentage of workers’ compensation patients receive opioids for pain management, much of drug formulary creation has been focused on curtailing this issue. Evidence suggests that injured workers who are given long-term opioid prescriptions typically take longer to return to work, which also increases costs. Ohio has seen a 59 percent decrease in opioid dependence in the state since the implementation of its formulary in 2011.

Another driver of formulary creation has been rising drug costs. All drug costs have been rising, even for generic medications. Some new brands are simply two generics combined to create a new drug, which also increases costs. Formularies can help reduce the prescribing of these more expensive combination drugs as well as overall drug costs. For instance, Texas has seen a major decrease in “N” drug prescriptions since implementing its formulary. “N” drugs include 25 brands of opioid pain relievers, muscle relaxants, antidepressants and cannabinoids.

These two states have been the forerunners in formulary creation and the initial findings encourage more research into formulary creation. Formularies are one powerful tool to help us achieve that goal.

Brian Allen, Mitchell VP of Government Affairs. During his time in government, Allen was actively engaged in the development of the Texas Drug Formulary Rule, the Tennessee Drug Formulary Rule and other critical rulemakings around the country. Additionally, he was a member of a special working group helping Assembly Member Perea in California draft the drug formulary legislation (AB1124). Allen is currently engaged in California, New York, Pennsylvania, Montana, Louisiana and Arkansas on drug formulary proposals and is working with other states on managed care and reimbursement issues.