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
- the leadership of Mitch Weisz, Chairman of the Illinios Workers’ Comp Commission and Kim Janas, Secretary of the Commission;
- WCRI’s timely and indisputable research showing just how much employers were paying to line the pockets of dispensers, repackagers, and their owners; and
- well-organized support for the regulation led by the American Insurance Association, PCI, CNA Insurance, Liberty Mutual, the Hartford, CompPharma, and workers comp PBMs.
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.