California: Use of compound drugs up sharply in comp system

The use of compound drugs, medical foods, and so-called convenience packs that combine prescription drugs and medical foods have increased dramatically in the California workers' compensation system.

A study by the California Workers' Compensation Institute found that the increase coincided with a crackdown by state regulators on physician-dispensed repackaged drugs.

According to the CWCI, the Food and Drug Administration has become increasingly concerned about potential health and safety issues associated with compound drugs and has ratcheted up its monitoring and enforcement efforts. Regardless, compound drugs, co-packs and medical foods have been promoted to workers' comp physicians and injured workers as an alternative to FDA-approved pain management pharmaceuticals. And like repackaged drugs, researchers said anecdotal reports suggest that these therapies are often used as a means to supplement physician revenue.

Use of Schedule II narcotics decreases among California injured workers (08/13/12)
IAIABC, ACOEM target state workers' comp agencies with opioid message (10/24/11)
Study shows increasing frequency, costs of physician-dispensed meds (09/06/12)
Opioids, physician dispensing continue to concern practitioners (02/25/13)
Opioids, physician dispensing are major concerns among WC payers (02/11/13)

To estimate changes in the volume and cost of these prescriptions, the CWCI examined data on California workers' comp prescriptions filled between 2006 and the first quarter of 2009 -- which encompassed more than 3 million prescriptions identified by specific national drug codes or product billing codes. After calculating quarterly distributions for the various prescriptions, researchers analyzed the growth in the use of bulk and component drugs used in compound medications, co-packs and medical foods across the 40-month study period. The study found that the percentage of California workers' comp prescription codes linked to compound drugs, co-packs and medical foods nearly quadrupled from 1.2 percent in the first quarter of 2006 to 4.7 percent in the first quarter of 2009 with the biggest surge coinciding with the regulatory elimination of differential pricing for repackaged drugs in March 2007.

According to the study, compound drugs, co-packs and medical foods have emerged as a significant pharmaceutical cost driver in the system. Researchers said this trend is likely to continue until specific statutory controls and administrative oversight are enacted to determine the true efficacy and the appropriate use and reimbursement of these products.

Read more at the WorkersComp Forum homepage.

September 27, 2010

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