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Drug formularies and workers’ comp

There’s a LOT of activity around the country related to drug formularies.  Four states (OH OK TX and WA) have implemented formularies and at least 4 more are considering doing so (CA, ME, MT, TN). (AR was scheduled to do so this year but pulled back)

The “Why?” is obvious; the proliferation of opioids, inappropriate prescribing of other drugs (Soma(r)), exploding volume of compounding, and rampant off-label use of drugs is seen as a major problem in work comp.

The “What”, as in, what formulary to use, is demonstrably not obvious.

There are (roughly speaking) three varieties of formularies;

  • Open – pretty much any drug is available to anyone
  • Closed – a binary, or yes/no formulary that is drug-centric
  • Disease state/Condition-specific – formulary based on the underlying diagnosis and disease state (e.g. acute v chronic)

The closed formulary has some advantages – it is very simple and easy to understand, and from a regulatory perspective, administer and evaluate.

The closed formulary also has some rather significant issues.

  1. it starts with the drug, not the patient’s medical condition.  This strikes me as backwards; guidelines should ALWAYS begin with the diagnosis.
  2. problems arise when “Y” drugs are dispensed, paid by the PBM, then the payer determines the drug is for an unrelated condition. Think antihypertensives, insulin replacements or asthma meds.
  3. it does not differentiate between acute and chronic stages of a disease or condition; treatment can be quite different for these different stages.

What does this mean for you?

While the closed formulary is easy to explain, it’s a lot tougher to manage on the back end for payers, PBMs, and prescribers alike.

And, while I’m no clinician, allowing antihypertensives and duragesic patches without a prior auth no matter the diagnosis, while requiring a PA for benadryl does seem problematic. 

3 thoughts on “Drug formularies and workers’ comp”

  1. Joe, Excellent points. In the Ohio BWC Formulary we have a subset of PA requirements on 363 of the 405 drug classes in the formulary. These drugs have an electronic edit applied at the pharmacy the requires the drug’s most common indications to be related to the allowances in the claim. If the relationship is not there, then a PA is required. Thus an antihypertensive would be blocked in a back sprain. Likewise a sustained release opioid product like duragesic is blocked as a first line product unless there are swallowing or absorption allowances in the claim. Thanks again for keeping the conversation on formulary use going.

    1. The “electronic edits” you describe. Are these edits applied by the PBM applying the formulary on behalf of the WC payer based in claim information shared its PBM by the WC payer ?

    2. This system is simply a way to put All people that are on WC into one ‘barrel’… Not everyone that need medication are the same, nor are each person Junkies or abusers.
      I have been denied medication not for the cost but for the reason that my condition is not cancerous. I have had 5 back surgeries and I am fused from my S-1 vertebrae up to my T-9 vertedrae.
      I have never failed a drug test or had ANY reason of concern by my physician that I am an drug abuser. Yet, I have been denied most all medications that would help me with my pain an offer me a day to be able to get up on my feet and have a half way decent functioning day.
      I am terrified daily of what type of letter that may come in my mail or that I may get a phone call telling me that I have been denied a refill.
      I have been “Cut-off” suddenly at the time of my scheduled refill sending me on a rollercoaster of Withdrawal that brings me sweats, chills, vomiting, mood swings and having all my extreme pain continue. This can last for over 3 weeks. This has happened to me two different times. All the while I have been on the medication over 15 years while being under the Same ‘pain Management’ doctor for 17 years.
      This system is un fair…
      Not all people that use opioid medicine are abusers, junkies, or sellers of their Medicie.
      Thank you for reading. J.D.

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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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