Survey: Workers’ Comp Drug Spend Declined by $1B in Past 8 Years

July 18, 2018

Pharmacy costs in workers’ compensation have decreased by $1.1 billion during the past eight years, according to CompPharma’s 15th Annual Survey of Prescription Drug Management in Workers’ Compensation.

“Pharmacy is no longer the fastest-growing segment of work comp medical expenses,” said Joe Paduda, president of CompPharma, LLC. “Work comp payers, regulators and PBMs have been extremely successful in reducing drug spend, much more successful than other payers. Survey respondents reported a 9.84 percent decline in total pharmacy costs during the past year, while the national spend across all payer types decreased by a paltry 2.1 percent.”

According to the report, “cost” is defined as total drug expenses for a payer. “Price is a contributor to cost, as is utilization or the number and type of drugs dispensed. Think of cost as Cost = Price x Utilization,” stated the report.

Twelve of the respondents credited clinical programs for the decrease while eight cited fewer opioid prescriptions.

A total of twenty nine payers were surveyed, including state funds, insurers, TPAs and self-insured employers.

Despite their success, payers remain focused on opioid management.

“They know that far too many patients still use opioids and are concerned about the risk of addiction and dependency,” Paduda noted.

According to the report, “Compounds, unscrupulous prescribers and dispensers gaming the system, drug price inflation, and implementing state formularies were named as the emerging issues of most concern to payers.”

The trend toward consolidation in the pharmacy benefit management (PBM) industry concerned some respondents.

“Some payers believe the large PBMs will be less willing to compete for their business and less willing to customize programs for them,” Paduda said. “At the same time, some see the potential that more resources and better buying power will help them further reduce costs.”

A copy of CompPharma’s 15th Annual Survey of Prescription Drug Management in Workers’ Compensation can be downloaded from

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