National Comp Pharmacy Costs Continue to Decrease


Sacramento, CA - CompPharma’s 13th Annual Survey of Prescription Drug Management in Workers’ Compensation analyzed the 2015 pharmacy cost data of 30 workers’ compensation insurance carriers, third-party administrators, self-insured employers, and state funds.

Total workers’ comp annual pharmacy spend is approximately $5.5 billion, but it is not possible to more precisely calculate workers’ compensation drug spend.

After a one-year bump up in inflation, work comp drug costs declined again, this time by 8.7%. The 30 payers saw a decline in spend, which they attributed to tighter clinical management, better integration with their PBMs on a variety of services, and specific efforts to reduce initial opioid scripts and decrease the level of morphine equivalents across as many patients as medically appropriate.

Over the last four years, drug costs for payers surveyed by CompPharma have dropped by 11%. This year, seven respondents’ drug costs dropped by 17 points or more. Claim volume changes were only involved for a handful of payers. Respondents attributed the steep decline to more active and assertive clinical management, especially focused on opioids and other potentially problematic drugs.

Over the 13 years the survey has been conducted, the pharmacy cost inflation rate decreased by 26.5 points.

Compounds were named as the emerging issue of most concern to payers, while opioids remained the "biggest problem" in workers’ comp pharmacy management.

Payers credited tighter clinical management, better integration with their pharmacy benefit managers, and prescriber interventions for the decrease. All have opioid management programs to limit the number of initial opioid prescriptions and/or decrease morphine equivalents across as many claims as medically appropriate.

"Twenty percent of the respondents also had assertive settlement initiatives and have been closing older claims," said Joseph Paduda, president of CompPharma, LLC. "Overall, payers have seen drug costs go down by 11 percent in the past six years despite the 2014 increase."

PBM consolidations received mixed reactions from the payer community. Some respondents hoped mergers would bring better pricing and more clinical capabilities while others expressed concern that the lack of competition would breed complacency.

The survey’s final question asks respondents to identify the single biggest problem in workers’ compensation pharmacy. This year the answers were diverse indeed. Prescriber behavior and variations thereof garnered a quarter of the responses; opioids were named by four respondents and compounds by three. If anything the most insightful answers involved the need to work with other stakeholders to address prescribing patterns, implement evidence-based guidelines and influence regulatory authority. Respondents would also like to receive more complete data (not just on pharmacy, but other medical cost data) and have better communication of the right information among stakeholders. Read More...


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