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What the Illinois repackaged drug fix means for you

Now that Illinois has fixed its physician dispensing upcharge problem, there’s one less target for the dispensing industry.  While that’s great for the Illini, it’s not so great for those in states where upcharging for repackaged drugs is still allowed.

That’s you, Florida.  And you too, North Carolina, and Virginia, and Michigan.

You can expect the prices for repackaged drugs to increase, in some places dramatically. With Illinois joining GA SC AR MS CT CA AZ and other states where upcharging for dispensed drugs is essentially banned, there are fewer states where the dispensing industry can still plunder employers and taxpayers.  The dispensing industry must continue to generate ever-higher margins for their owners and investors, so they are going to increase prices and push for more scripts for more claimants from more physicians dispensing.

As WCRI has ably reported, prices for drugs dispensed by Florida physicians have held remarkably stable, while prices in other state, notably Illinois, increased substantially.  There’s some thinking that the industry has purposely held prices in the Sunshine State down in an effort to remove some of the pressure to pass a legislative fix.  After spending the last two days at the Florida Chamber’s Insurance Institute and conversing at length with  legislators keenly interested in the topic, my sense is the issue will once again be front and center in Tallahassee.

One anecdote points to the extent of the problem.  A good friend from a PBM told me yesterday that one of their clients sent them a $4300 bill for a repackaged drug, and asked what was to be done.  The PBM told them:

  1. that same drug would have cost $151 at a retail pharmacy
  2. as this was in North Carolina, where the fee schedule is “pay as billed”, there wasn’t much they can do.

This isn’t by any means a rare event. It is happening every day in many states, likely even your’s.


One thought on “What the Illinois repackaged drug fix means for you”

  1. re: the North Carolina drug with a repackaged price of $4300 and retail pharmacy price of $151. I think that carrier and the PBM now have a ‘poster child’ for the problems with repackaging. I would try and schedule a meeting (face to face) with the prescribing physician and SHOW THE DOCTOR. It would be very interesting to know how much of the $4149 ‘extra’ profit (remember the retail pharmacy is making a profit when the sell the drug for $151) is going to the doc, and how much to the repackager. Tell the doctor (and his boss if he’s an employed physician) that as much as you value the care he gives to his injured worker patients YOU CANNOT AFFORD TO SEND PATIENTS TO HIM ANY MORE because of the repacking. I would also take this ‘poster child’ example to my state legislator and to anyone else who will listen.

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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.



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