WCRI: Physician-dispensed drugs still a concern despite reforms in Georgia
The Massachusetts-based Workers Compensation Research Institute compared average prescription prices for physician-dispensed medications before and after the state initiated rules to lower the costs. The report raises some questions about the practice.
"After the reform, the average prices paid to physicians for common drugs were mostly 20-40 percent higher than the prices paid to pharmacies for the same medications," the study says. "Why were the prices for the same drug not similar after the reform?"
Georgia changed the reimbursement rules for physician-dispensed prescriptions in April 2011 due to the typically "much higher price" compared to the same drugs dispensed by pharmacies. The reform capped the reimbursement rate to the average wholesale price of the original drug product used in the repackaging process.
The idea was to reduce the costs but still allow physicians to dispense medications, according to the authors. The reform effort seemed to be successful, to a point.
For example, physician-dispensed hydrocodone acetaminophen cost an average of $1.05 before the reform and $0.67 after. While that represents a decrease of 36 percent, the same prescription costs $0.48 when dispensed by a pharmacy -- 40 percent less.
"We see some evidence that physician dispensers prescribed certain strength drug products with a higher price more often in the post-reform period than in the pre-reform period. Hydrocodone acetaminophen 5-325 milligrams vs. 5-500 milligrams was an example," the report says. "This shift can probably be explained by two main reasons: concerns about the adverse health risks of high dose acetaminophen and also some physicians' desire to mitigate the reduction in income after the reform."
As the authors explain, the Food and Drug Administration is asking all manufacturers of oral prescription acetaminophen combination products to limit the maximum amount of the drug by next year due to concerns about liver damage associated with overdose. Some physicians, and to a much less extent some pharmacies, have shifted to prescribing drug products with the same strength for hydrocodone but lower strength acetaminophen.
"The lower strength drug product had a higher price," the report says. In fact, the 5-325 milligram product costs 50 percent more than the 5-500 milligram product.
"This raises the possibility that the shift to the lower strength drug product may have been partly motivated by some physicians' desire to mitigate the reduction in income from dispensing prescriptions after the reform reduced the prices paid for physician-dispensed prescriptions," the report says.
One other reason for the overall continued price disparities between physician-dispensed and pharmacy-dispensed medications may have to do with discounts contracted by pharmacy benefit managers with pharmacies, which may bring prices below AWP, the authors said.
The report also noted that physicians in Georgia continued dispensing drugs after the reforms despite concerns by some that reducing the reimbursement rates might preclude them from doing so. Thirty-five percent of all prescriptions were dispensed by physicians before the reform while the figure dropped to 28 percent after the reforms.
Several drugs that were typically dispensed by physicians were much less likely to be prescribed by physicians that did not dispense them. Examples include acetaminophen, ibuprofen, naproxen sodium, and omeprazole -- many of which are available without a prescription, but at lower strengths.
By Nancy Grover
Read more at the WorkersComp Forum homepage.
August 12, 2013
Copyright 2013© LRP Publications