Insight, analysis & opinion from Joe Paduda

< Back to Home


Drugs and worker’s comp, part 2

Yesterday we posted on top takeaways from our 18th Survey of Prescription Drug Management in Workers’ Comp.

Today, I’M responding to several readers’ questions about physician dispensing (PDD) and mail order pharmacies (twin sons of different mothers) and why they are rearing their unfathomably ugly heads once again.

Mostly because payers have pretty much neglected the issue for more than a decade. Meanwhile the profiteering dispensing industry has been contributing big dollars to politicians, coming up with new and ever-more creative ways to get around regulations, and learning how to get reimbursement from payers – one at a time.

The work comp payer industry is fat dumb and hugely profitable for insurers and some (non PBM) vendors/service entities. Why expend energy on PDD when you’re making bank, employers aren’t complaining, and claim counts are going to continue to decline?

Unfortunately, injured workers are the victims, as are employers and tax payers.

  • PDD are rarely subjected to utilization review (by the time the payer finds out a drug has been prescribed and dispensed by PDDs, it’s way too late to do anything about it.
  • PDDs may conflict with other medications, duplicate other medications, or be contra-indicated for the patient.
  • PDDs are hugely expensive – and often unnecessary or duplicative. Profit margins likely exceed 90%.

The net is payers are usually demanding PBMs “fix” the problem of PDD – instead of partnering with PBMs, employers, and other stakeholders to build and implement a long-term strategy to stop PDD.

What does this mean for you?

If you aren’t fighting the good fight, you are the problem.



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.