Compounds Pose Emerging Cost Driver in Work Comp Pharmacy, but Physician Dispensing and Opioids Still Major Concerns, According to CompPharma’s 11th Annual Survey of Prescription Drug Management in Workers’ Compensation

Tampa, Fla. (Dec. 16, 2014) – Drug costs still worry workers’ compensation payers, despite relatively flat pharmacy costs, according to the results of CompPharma’s annual survey report of Prescription Drug Management in Workers’ Compensation. The 11th annual report can be found at http://tinyurl.com/CP2014Survey.

Answering the question “How big of a problem are drug costs?” on a scale of 1-5 with 3 being “Drug costs are equally as important at other medical cost issues,” respondents put drug costs at 4.1. A slight increase over the past three-year average of 3.8, it indicated drug costs were more important than other medical cost issues. Respondents also predicted drug costs would be more of problem in the next two years than they are now.

Specifically, payers’ concerns circulated around opioids/narcotics, physician dispensing, and the emerging issue of compounded drugs. Physician dispensing, which accounted for more than 35 percent of the drug costs in 2013, raised specific concerns. Respondents cited patient safety because these drugs bypass the drug utilization review process and offer potential for duplicate therapy. All respondents pointed to higher costs. Repackaged drugs are priced higher than the same medications at retail stores; studies show extended disability duration and higher overall medical costs associated with physician dispensed drugs; and often the medication is unnecessary or not related to the claimant’s work injury.

When asked how to addresses these issues, respondents mentioned programs, legislation and regulation. “They seem to believe that without the legal backup provided by regulations or legislation, payers cannot effectively address certain concerns,” said CompPharma President Joe Paduda, noting that one person called for regulatory action regarding the use of strong utilization review coupled with evidence-based guidelines and tight formularies.

“There’s a sense that jurisdictions haven’t kept pace with medical developments, the explosion in the use of opioids or the creativity of repackagers and physicians seeking to maximize profits and the expense of tax payers and employers,” he added.

About CompPharma Established by industry consultants Joseph Paduda and Helen Knight, CompPharma, LLC is a consortium of workers’ compensation PBMs active in workers compensation. More information is available at www.comppharma.com or by contacting Helen Knight at 813-690-4787 or hknight@comppharma.com.

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Media Contact:  Helen Knight, 813-837-1701; helen@kingknight.com