Workers Compensation Research Institute (WCRI) recently conducted a series of studies aimed at examining the effects that federal and state regulations are having on the reduction of pharma spend. What the industry is seeing is an emerging trend in physician prescription reimbursement that begs the question, is price-focused reform effective?

One particular regulation, enacted to cap prices paid by tying the maximum reimbursement to average whole price (AWP) has left physicians in certain states dispensing new drug strengths and formulations at higher prices in efforts to compensate for lost revenue. AWP is set by the original drug manufacturer, however new strengths/formulations are seen as generic, not repackaged. This technical distinction allows the new “manufacturer” to set a new, much higher, AWP, sidestepping reforms. Highlighted in the report, Physician Dispensing of Higher-Priced New Drug Strengths and Formulation, the muscle relaxant cyclobenzaprine, one of several drugs prescribed in this manner, illustrates the effects of such dispensing practices (sales from the first quarter of 2014, post-reform):

  • California
    • Typical 5-10mg dose: $0.38-0.39 per pill
    • New 7.5mg product: $3.01 per pill
    • Prescription increase (in same quarter): 55%
  • Florida
    • Typical 5-10mg dose: $1.29-1.75 per pill
    • New 7.5mg product: $4.11 per pill
    • Prescription increase: 49%
  • Illinois
    • Typical 5-10mg dose: $1.25-1.55 per pill
    • New 7.5mg product: $3.86 per pill
    • Prescription increase: 22%
  • Tennessee
    • Typical 5-10mg dose: $1.08 per pill
    • New 7.5mg product: $3.97 per pill
    • Prescription increase: 19%

How can you reduce large loss claim outcomes in the face of these cost drivers?
This trend is driving up medical costs not just in the workers compensation industry, but in the healthcare industry as a whole. With our proprietary pharmacotherapy review, ANS is able to cut through the red tape and provide our clients with quantifiable results. The results achieved not only lower financial costs, but dramatically improve the quality of life and care for the injured worker.

Get on the road to settlement to day with ANS Solutions.