Florida Legislature targets repackaged drug costs

Reimbursements for repackaged or relabeled prescription drugs add an estimated $62 million in annual costs to Florida's workers' comp system, according to NCCI. With that in mind, lawmakers are considering legislation that would close what supporters call a legal loophole that allows for the higher prices, possibly reducing system costs by 2.5 percent.

State law allows reimbursement for prescription drugs as the average wholesale price plus a $4.18 dispensing fee, or contract rate, whichever is lower. Repackaged drugs, on the other hand, are pharmaceuticals purchased in bulk by drug repackagers and then assigned a different AWP, "which is often substantially higher than the manufacturer's AWP," according to a legislative summary of H.B. 511. "As such, the cost for a prescription filled with repackaged drugs in the workers' compensation system is generally much higher than it would have been if the prescription had been filled with the same drug that had not been repackaged."

The proposed legislation would provide the same rate of reimbursement for repackaged or relabeled drugs as for non-repackaged drugs. "Reimbursement for repackaged or relabeled drugs is to be calculated by multiplying the number of units of the drug dispensed by the per-unit AWP set by the original manufacturer of the drug (which may not be the manufacturer of the repackaged or relabeled drugs), plus a $4.18 dispensing fee, unless the carrier has contracted for a lower amount. The bill expressly prohibits the price of repackaged or relabeled drugs from exceeding the amount that would otherwise be payable had the drug not been repackaged or relabeled," according to the summary.

CWCI: Compound drugs are more potent, costly (03/11/13)
State legislators to address controversial meds in workers' comp (03/04/13)
NCCI: Physician dispensing on the rise in most states (10/06/11)
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)

The top 15 most frequently dispensed drugs in Florida's workers' comp system are 45 percent to 679 percent more expensive when dispensed through repackaging, according to NCCI. The vast majority of repackaged drugs in Florida are dispensed through physicians' offices -- which account for 36 percent of overall prescription drug costs.

Supporters, including several business groups, say the legislation will end unpredictable cost fluctuations that drive up workers' comp pharmacy costs. They also say the savings could be used to create jobs in Florida.

Similar legislation passed by the legislature two years ago was vetoed by then-Gov. Charlie Crist, who said it had not been fully vetted in the legislative process. A bill last year was passed in the Senate, but not in the House.

Read more at the WorkersComp Forum homepage.

January 30, 2012

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