Costly Prescription Drugs Are Jacking Up WC Bills

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A greater use of pricier painkillers and other prescription drugs to treat employees hurt on the job is sending workers compensation costs soaring, an insurer study has found.

Ken Martino, senior vice president of Specialty Risk Services, a subsidiary of The Hartford Financial Services Group, says that “the use of drugs and a shift to more costly drugs,” was behind a 67% cost increase his company has tracked over the past two years.

The Hartford says it has contracted with a pharmacy benefits management program, Tmesys, a service of the PMSI division of PharMerica, as one of a number of steps to put a damper on prescription drug costs. “We think we are well on the way” to reducing expenses, says Martino.

In examining its drug costs, the company did a ranking of 25 medications. The most money the company spent on prescriptions was for the time-released pain reliever Oxycontin, followed by two anti-inflammatory drugs, Celebrex and Vioxx, according to Martino.

He notes that, in the past, two other painkillers–Relafen and Daypro–were among the top 10 on the list. They cost about $1.50 per dose, he says. Now, he points out that Relafen ranks 22nd on the list, while Daypro has dropped off entirely. Celebrex and the other drugs that have taken their place cost from $2.50 to $3.00 a dose, he explains.

The volume of Vioxx prescriptions, according to The Hartford, jumped 908% last year compared with 1999.

Zanaflex, an Elan Pharmaceuticals drug for muscle spasms, was found to have gone from 25th to 14th on the list–with volume increasing 567%.

Duragesic, a patch that delivers medication to relieve localized chronic pain, jumped from 17th to eighth in the rankings following a 169.2% cost increase over the past two years.

Martino says that The Hartford–by written premium the eighth-largest workers comp writer in the country–typically finds pain medications being prescribed for workers comp patients to relieve back, knee and shoulder problems.

The Hartford and Specialty Risk Services, which is a third-party administrator, says that high prescription costs should be addressed on four fronts:

Analyze data to understand trends and improve outcomes.

Inform injured workers and healthcare service providers.

Enhance pharmacy utilization management.

Fight prescription fraud and abuse.

According to The Hartford, its analysis found that the higher-priced drugs were being prescribed for conditions successfully treated by other medications.

Providing information to injured workers and physicians about alternatives and implementing a pharmacy benefit management program, Martino says, “are both crucial in helping to control workers compensation costs.”

The Hartford says its pharmacy benefits management program offers its workers comp customers access to more than 90% of the nations retail pharmacies.

According to the company, besides saving workers comp clients money through retail pharmacy discounts and generic drug substitution when appropriate and permissible, a pharmacy management program can flag potential side effects or other dangers, and bring these to the attention of the pharmacist or healthcare providers.

As an example, the insurer says, a painkiller might cause stomach problems or sleeplessness, requiring additional medication. Other medicines might be addictive and should only be used for a short period.

A pharmacy benefits management program, according to company, could uncover unusual usage patterns, which might indicate fraud.

The company says other solutions for reducing drug costs include introduction of new state legislation to increase generic drug use and implementation of more utilization controls.

According to Martino, prescription regimens are sometimes more effective when coupled with other treatment modalities such as physical therapy.

He notes that an increase in prescription drug volume rather than price has been a general market trend.

is an associate editor of NU’s Property & Casualty/Risk & Benefits Management edition.


Reproduced from National Underwriter Life & Health/Financial Services Edition, May 13, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.