Insight, analysis & opinion from Joe Paduda

< Back to Home


Employers in Illinois have much to be thankful for

As of yesterday, employers won’t have to pay outrageously inflated prices for drugs dispensed to their injured employers.  Until the legislature approved regulations capping drug prices for repackaged drugs, employers’ workers comp drug costs had been increasing at an astounding rate.

The regs now require insurers to base reimbursement for physician dispensed repackaged drugs on the price of the drug before it was repackaged.  Here’s the new language as published in the Illinois Register:

“If a prescription has been repackaged, the Average Wholesale Price used to determine the maximum reimbursement shall be the Average Wholesale Price for the underlying drug product, as identified by its National Drug Code from the original labeler.”

A big win to be sure, as physician dispensing companies, their investors and enablers were making millions in Illinois doing little more than taking pills from one bottle and putting them into another. The result? In Illinois, costs for physician dispensed drugs went up more than twice as fast as the number of scripts, because physicians dispensing medications raised their prices dramatically. According to a WCRI study, while the price of Vicodin purchased at a retail pharmacy dropped 2 percent over a year, physician dispensed Vicodin went up 66% over that three-year period.

I won’t get into how employers were able to defeat the efforts of physician dispensers, their investors and enablers to stop the new regulation except to acknowledge this would not have happened without

Lest we get too complacent, realize this is but one state out of 50. The repackagers and their enablers will continue their efforts in Florida, Hawai’i, Michigan, and everywhere else to keep sucking money out of employers and taxpayers to pay big dividends to private equity firms, buy corporate jets and fancy cars.

For now, congratulations to the good guys.  Then back to work on Monday.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.