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While comparing baseball scorecards to workers compensation prescription drug costs may be a bit of a stretch, it certainly is a very good idea for payors to "know the score" on an ongoing basis. With that in mind, Progressive Medical Inc., a national workers' compensation pharmacy benefit manager (PBM) in Columbus, Ohio, has boosted its "scorecard," the company's Workers' Compensation Drug Spend Analysis, from an annual event to twice per year.

According to Jason Winters, RPh, MBA, and business development manager at Progressive Medical, the main reason for releasing a mid-year Drug Spend Analysis simply comes down to giving clients even more data about the critical factors that go into the cost of prescription drugs for comp. There also is a lot to report about. In the case of Progressive clients, the news remains very good.

"Initially, we believed once a year would be enough in terms of keeping our customers up to date on prescription drug costs and the factors that affect them most, but changes are happening so fast, we knew we needed to report to them twice a year," Winters explains.

So what's the "score" for Progressive clients (Progressive uses aggregate data for the prior six-month period from its client database)? For one, when compared to the first half of 2009, Progressive clients experienced a 1.9 percent reduction in drug spending per injured party. This comes on the heels of a similar 1.9 percent reduction in injured party drug spending experienced by Progressive clients from 2008 to 2009.

Other significant findings from the first half (Jan.1-June 30) of 2010 include:

-- The average injured party is on track to use 3.7 percent fewer days' supply of medication.

-- Increased generic dispensing continues to help payors, though it is somewhat balanced by increased use of some new, brand only products.

-- Average Wholesale Price inflation increased drug spending 3.4 percent.

Those results are following the same trends in the first two years of our Drug Spend reports," Winters says. "Another very positive trend is narcotic use as a percentage of total drug spend is going down, and that also continued in first half of 2010.

"That is very big on the radar screen," he says. "We are trending into the low 30's in terms of narcotic spending as a percentage of total drug spending; this is significantly lower than what is being reported by our competitors."

In its six-month update to the Drug Spend Analysis, Progressive, which serves insurance carriers, third party administrators and self-insured employers, also details several key factors affecting spending.

Inflation is one of those key issues. For example, price inflation as measured by a changing AWP continues to affect purchasers of prescription drugs. While brand name products are on pace for low double-digit increases for the year, generics are tracking towards a very modest single digit increase. Through the first six months of 2010, rising prices have increased brand name medication spending in workers' compensation by 5.2 percent, compared to a 0.6percent increase for spending on generics. With nearly 60 percent of workers' compensation medication dollars spent on brand products, this equates to a blended 3.4 percent upwards impact on drug spending.

Winters says utilization is another key indicator mitigating drug spending so far in 2010, as injured parties are using less medication, through our programs, than through the first half of 2009. Also, per-claimant medication use is down 3.7 percent over last year, as measured by the number of days' supply of medicine obtained.

"Based on the first half of 2010, injured parties are projected to use an average of 270 days worth of medications in 2010, down from 281 days in 2009," says Winters, citing increased awareness of the dangers of the use of certain drugs, particularly powerful opioid narcotics, and more aggressive drug utilization control measures.

As noted, the increased use of generic drugs also continues to have a positive impact on drug spend, an ongoing trend since 2005 for Progressive Medical clients.

"The first half of 2010 saw a two percent increase in use of generic over the same period in 2009," Winters says. "This year-over-year improvement singlehandedly equates to a 2.6 percent reduction in overall drug spend.

"Utilization programs increasing the use of generic drugs, at an average of less than one-third the price of brand name drugs, are helping to restrain rising prescription costs," Winters adds.

On the other hand, 2009 was unusual in that two new drug entries could represent significant spending for payors. Those drugs, NucyntaŽ and EmbedaŽ, currently rank #49 and #62, respectively, in terms of dollars spent through the first half of 2010. Nucynta is a short-acting narcotic analgesic which demonstrates reduced gastrointestinal side effects for some users compared to other similar generic options. Embeda is a long-acting narcotic analgesic which combines morphine with an ingredient intended to reduce abuse.

Progressive is keeping a close eye on those two drugs for clients in terms of rising costs.

Other additional "topics of interest" covered in the mid-year Drug Spend Analysis include an update on the Risk Evaluation and Mitigation Strategy (REMS) for long-acting and extended-release opioid narcotics, such as OxyContinŽ and AvinzaŽ; an update on Abuse-Deterrent Narcotics, a positive, emerging trend, and new information about the possibility of a national Prescription Drug Monitoring Program (PDMP).

"Primarily, our goal is to give clients information that can help them make better decisions, and also show them how by working with Progressive Medical, they can reduce prescription drug costs without compromising care," says Progressive's Emptage. "Based on feedback related to the Drug Spend Analysis reports we have done so far, our clients are very pleased to receive this type of information. In this case, we delivered an accurate scorecard of the past six months, so they can truly understand why prescription drugs are such a critical factor in overall medical spending for workers' compensation."

To obtain a copy of Progressive's 2010 Mid-Year Drug Spend Analysis, visit www.progressive-medical.com.

(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & InsuranceŽ on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)

September 8, 2010

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