A surge in prescription activity by doctors is having a greater impact on the cost of treating injured workers than the price of drugs, according to new research from the National Council On Compensation Insurance.
The findings were made in the report “Prescription Drugs: Comparison of Drug Costs and Patterns of Use in Workers Compensation and Group Health Plans.”
Among the other key findings were figures showing that workers compensation systems paid roughly 125% of the average wholesale price of prescription drugs, while group health operations paid 72%.
The report also said that the prescription drug share of workers comp medical costs rose from 6.5% in 1997 to 9.6% in 2001, using the year the accident occurred.
It was noted that if the yearly cost for a fixed regimen of medical treatment begins at $10,000 and there is annual medical cost inflation of 10%, then the cost for these medical treatment services will be nearly double by the eighth year after the accident.
Generic equivalent drugs, the report said, are prescribed, when available, 79% of the time for workers compensation claims.
Barry Llewellyn, NCCI senior divisional executive for regulatory services, based in Hoboken, N.J., and one of the reports authors, says he was surprised by the fact that generics were that widely prescribed. “Frankly, thats been one of the leading attempts to control costs. Apparently its happening.”
Llewellyn at the same time notes the high rate of prescriptions for the aggressively promoted nongeneric pain killer Oxycontin, which he says normally is reserved for only the most severe cases of pain such as the last stages of cancer.
The researchers found that 56 percent of comp drug costs are associated with drugs having no generic equivalent. So savings from generics are available for only about 8% of workers comp drug costs overall.
Painkillers, according to the report, represent 55% of the cost of workers comp prescriptions.
Explaining drug utilization, which the report says has a greater impact on comp drug costs than price, researchers say it includes “movement to new or more powerful drugs and an increase in the number of prescriptions.”
Factors that were found to increase utilization include:
Greater availability and dependence on medications for treatments.
Aggressive marketingmajor pharmaceutical manufacturers spend more than twice as much on marketing and administration than on research and development, says NCCI. Drug promotions reached nearly $19.1 billion in 2001, the report says.
The aging workforce, which requires greater support from prescription drugs.