NCCI: Physician dispensing on the rise in most states

Prescription medication costs continue to increase in the workers' comp system, according to the latest research from the National Council on Compensation Insurance. The Florida-based organization's latest assessment of the situation points to utilization as a major cost driver.

"Utilization is one of two things," said NCCI's John Robertson, a contributing researcher to the study. "One is the number of drugs dispensed. The other is the mix -- if it goes from less expensive drugs to more expensive drugs for the same condition, that would get picked up in utilization."

Utilization helped push the cost of medications per claim up by 12 percent in 2009, the authors say. Pharmacy costs accounted for 19 percent of workers' comp medical expenses -- the highest rate since NCCI began studying the issue.

CWCI: Compound drugs are more potent, costly (03/11/13)
State legislators to address controversial meds in workers' comp (03/04/13)
Florida Legislature targets repackaged drug costs (01/30/12)
Detailed report offers analysis, suggestions to prevent drug abuse (07/09/12)
Workers' comp physicians not following guidelines for opioid use, study shows (10/25/12)

Along with, and part of the reason for increased utilization was a rise in physician dispensing of medications, an indicator that showed up in NCCI's study from last year. "When we looked at this a year ago, I was personally surprised that it was going up in every state," Robertson said. "We knew that California had taken some steps to reduce the amount of repackaged drugs sold, and we kind of expected the repackagers would try to start selling them in other states. I personally had expected it to be a few states. I was surprised to find it was practically every state."

In fact, the study showed that only four states had decreasing shares of physician dispensing in 2009: Hawaii, Idaho, Oregon, and Rhode Island. To demonstrate the significant increase in the last few years, the researchers compared figures from 2009 and 2007.

For 2009, they found:

30 jurisdictions, including the District of Columbia, have physician-dispensed shares over 15.5 percent.
Seven states have physician-dispensed shares between 10.5 percent and 15.5 percent.
Nine states have physician-dispensed shares below 10.5 percent.

Using the same share ranges, Service Year 2007 had:

14 states in the high range.
11 states in the middle range.
21 jurisdictions, including the District of Columbia, in the low range.

The cost of physician-dispensed drugs is generally higher than the per-unit cost of the same medication dispensed by a pharmacy, the study said. "States with larger than average increases in the share of drug costs arising from physician-dispensed drugs typically have larger than average increases in per-claim Rx costs," it said.

Several reasons are noted, such as overall economies of scale, the fact that pharmacies often dispense larger quantities of drugs per transaction, and pharmacies' ties with pharmacy benefit manager networks, which often can achieve lower costs.

Types of drugs prescribed. OxyContin was the top drug for 2009. Its movement from third to first from 2008 to 2009 was not unexpected, as the patent for the narcotic painkiller was reinstituted, bucking the normal trend. The next drugs in ranking order were:

Lidoderm -- used to relieve the pain associated with sunburn, insect bites, poison ivy, poison oak, poison sumac, and minor cuts, scratches, and burns.
Hydrocodone-acetaminophen -- the generic form of Vicodin, is a narcotic analgesic used to relieve moderate to severe pain.
Lyrica -- an anticonvulsant and neuropathic pain agent used for treating fibromyalgia or nerve pain caused by certain conditions, such as shingles and diabetic nerve problems. It is also used in combination with other medicines to treat certain types of seizures.
Celebrex -- a nonsteroidal anti-inflammatory drug used to treat pain or inflammation caused by conditions such as arthritis, ankylosing spondylitis, and menstrual pain. It is also used in the treatment of hereditary polyps in the colon.

Read more at the WorkersComp Forum homepage.

October 6, 2011

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