Category Archives: Pharmacy, PBMs, and Pharma costs

Workers’ comp opioid usage in California…

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Schedule II opioid scripts in California increased 557% from 2005 to 2012.  

According to a study released by CWCI yesterday, growth seems to have topped out, with S-IIs accounting 7.2 percent of all drugs prescribed in the 4th quarter of 2012 after hitting 7.1 percent in 2011.

Some may see this as progress.  If “progress” is defined as not getting any worse, perhaps that’s accurate.  I’d suggest that stabilizing at 7.2 percent of scripts and 19 percent of drug spend for drugs that have little place in treating workers’ comp injuries is only good news if one doesn’t consider the long-term impact of opioids.

Claimants taking opioids over the long term are not going back to work, aren’t going to settle claims, and are going to cost far more than claimants – with the same diagnoses – that aren’t on opioids.  Lest you think this another “insight” from Captain Obvious, ask your actuaries if they have projected future costs factoring in the impact of opioids.

Fact is there is precious little research into the impact of opioids on financials over the long term. I’ve asked many industry experts, insiders, and thought leaders, along with several comp actuaries, if they’ve heard of or done much in the way of analysis.  With some notable exceptions, the answer is “not really”.

In defense of actuaries, they’re using historical data to predict the future.  So, the financial effect of a pentupling of opioid usage hasn’t revealed itself in the data yet; or more accurately, the impact has yet to be fully realized.

When it is, the stuff is going to hit the fan.

I’d note that these data refer to California’s experience and may not be – and in all likelihood are not – representative of the entire country.  I’d hazard a guess that some states have yet to reach their “opioid peak” while others may be close to stabilizing growth.  Scary thing is, outside of California and Texas, payers just don’t know.

We do know that initial opioid usage in Texas has decreased thanks to the closed formulary and tough UR standards.  We also know that payers using PBMs have seen declines in opioid usage (see here and here).

What does this mean for you?

Do you KNOW the financial impact of opioids?

Hawai’ian Drug Summit – weird goings on…

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I attended and was privileged to speak at the Hawai’i Rx Drug Summit, held yesterday in Honolulu. Focused on opioids and drug controls but with a heavy emphasis on physician dispensing of drugs, the Summit also featured a random guy videotaping me, a guy who claimed he’s working on a documentary about the dearth of doctors on the Islands.

That line made no sense, as I wasn’t speaking about anything remotely related to that issue, yet he had three (!!) separate cameras recording both of my talks – and one followed me around recording me as I chatted with other attendees…

The guy, one Michael Cooper, claimed he was doing this on his own, was not affiliated with any other entity, and was funding this documentary all on his own.  I informed Cooper, in front of the 300+ people, which included law enforcement, that he could only use the video or any recording of me for the documentary and no other purposes whatsoever. Cooper agreed – again in front of the entire audience.

We shall see what develops; given my “popularity” with the physician dispensing crowd, I thought it might just be that somehow they’d want to record me saying something they could twist or slant or use to further their cause….

Here are a few of the highlights.

Tim Dayton of auto insurer GEICO spoke, noting 60% of auto loss costs are for auto repair, but losses are trending lower due to better, more efficient repairs and competition.  However, the trend in other coverages – especially PIP (medical coverage) is getting much worse.  In fact, GEICO needed a rate increase of 75% – 89% increase for PIP for some of their insurance lines, and ended up with a 25% rate increase for PIP.

A big driver is – surprise – physician dispensing.

Dayton is, to his dismay, quite knowledgeable about drug costs, drug pricing, and physician dispensing.  He opined that some very smart peole had figured out how to exploit a rule that had been written with the best of intentions – he was referring to a HI rule re reimbursement for drugs for medical treatment.   Dayton cited SpeedGel (you remember that, right?) and the “evolution” in pricing for that “medication”, it was $24.95 originally, then $59.95, then $258.96, now $416.01 at 140% of AWP, the reimbursement required by state regulations.  And all with barely a change in the wonder drug!

Dayton was followed by Paul Au, the risk manager for the City and County of Honolulu, where drug costs went up from $400k to 1.8 million over ten years; and a  half-million over two (1.25 to 1.78 from 2011 – 2012).  This was driven almost exclusively by physician dispensed drugs, which happened after a large dispensing entity entered the islands. (this could be mere coincidence…)

For the City/County, physician-dispensed drugs now account for 19% of scripts, 50% of costs; the cost is up 650% over 8 years.

This at a time when claim counts have declined by 300 claims, or 20% or so while drug costs are up 570% on a cost per claim basis.

I spoke twice – first on opioids (yes, again…) and then on physician dispensing, citing CWCI’s ground-breaking research, and debunking the five myths of physician dispensing (improves access (not), improves outcomes (actually worsens them), requires higher reimbursement due to higher cost for repackaged drugs (absolutely false), MD-dispensing is necessary to get life-saving drugs started immediately (completely untrue), reduces disability duration (actually increases it).

The Summit was put together by Kristy Kobayashi of CorVel, and sponsored by CompToday, Genex, ESI, PacBlue, and Allied Managed Care.  Kudos to those folks for sponsoring…

more to come.

Express Scripts’ work comp results are in

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Express Scripts’ 2012 Drug Trends Report provides an interesting picture of the trends experienced by their clients.  ESI has a pretty strong presence among the State Funds, with California and New York two of the larger ones served by the St Louis-based PBM.

As noted last week, you can’t compare statistics from one PBM to the next without ensuring you understand and factor in the definitions, formulae, claimant population and methodology/time frames used by the PBMs in question.

ESI’s stake in the ground is in avoiding “waste”, defined as “any additional spend on pharmacy costs that provides no incremental benefit in treatment outcomes.” Prescribing branded drugs when generics are available, maximizing home delivery, avoiding potentially abused drugs – all contribute to waste and thus higher costs and poorer outcomes.

A couple of interesting data points; ESI’s researchers determined that using non-morphine pain medications (typically synthetic opioids e.g. OxyContin) instead of morphine-containing meds “could have cost $1,172 in additional spend per injured worker for each year during which narcotic medications were used.” The point was specific to claimants receiving long-acting opioids relatively early in the treatment process, with ESI contending other, less expensive drugs are likely more appropriate.

Lead clinician TIm Pokorney RPh and his colleagues also looked at compounds and copacks; potency was “much higher than intended in MIssouri and Texas”, a particularly frightening finding given the well-publicized problems with compounds’ safety.

ESI’s average client saw trend increase 2.9% in 2012, driven by a 3.2% increase in the cost per script.  Oxycontin remained the top drug in terms of cost, at 9.7 percent of spend, however overall usage of narcotics was down 2.7% – a welcome change and one mirrored by other PBMs’ results.

Drugs that saw significant more utilization year-over-year include generic morphine, Cymbalta(R) gabapentin and oxycodone – all used for treating pain. On the positive side, utilization of Opana(R) ER and Oxycontin both declined dramatically. Clearly ESI’s efforts to move claimants from branded drugs to generics are paying off.

Progress.

 

Opioids in workers’ comp – problems with long-term usage and what to do about it

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WCRI hosted a webinar yesterday to discuss WCRI’s latest research into long term users of opioids, policy options and recommendations.  The event topped the list of best-attended webinars – the problems associated with opioids and potential solutions thereto is a critical issue facing all workers’ comp payers.

Dr Dongchun Wang started with a review of WCRI’s new information – with a focus on longer-term usage – lost time, musculoskeletal-related injuries without surgery who received opioids more than 6 months after injury. Here are a few of Dr Wang’s highlights:

  • In Louisiana, one in six claimants who received opioids early on were long term users, in other states it is one in ten.
  • The use of other treatment modalities in conjunction with opioids was quite low – 24% of claimants from 2009 – 2011 were receiving drug testing – ten points higher than the two previous years – whoever range was from 18% – 30%.
  • This was far better than psych evals – which were in the mid-single digits.  Very few claimants are evaluated on the front end for psych issues, or get psych treatment.

Dr Kathryn Mueller followed up with a discussion of the global pain problem and attendant issues with opioid over-prescribing and abuse.  Claimant MEDs (morphine equivalent dosage) varied by a factor of four across the study states.  This despite consistent guidance from all sources recommending limited use of opioids. ACOEM calls for limiting opioids to 3-10 days while all guidelines re CNCP (chronic non-cancer pain) essentially include the same treatment for pain – limited opioids, use of NSAIDs, manage not end pain, use CBT (cognitive behavioral therapy, 6-10 visits typically).  Opioid therapy is a very small part of pain therapy, which should also require documentation of functional improvement and change. Dr Mueller also:

  • recommended accessing PDMsP.
  • recommended including weaning language in all opioid agreements.
  • noted there are no studies that show long acting opioids are preferred or have better outcomes than short acting – and no evidence for or against a specific drug.
  • noted CO has a drug monitoring payment code to encourage payment for physicians managing opioids
  • said re urine drug monitoring, that physicians need confirmatory testing of metabolites and not just in-office screening

Dr Dean Hashimoto finished up; we will review his comments in a later post.

 

Workers’ comp drug trends – good news at last, Part 2

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Workers’ comp pharmacy benefit management firms devote significant resources to research, much of which is published in their annual drug trend reports.  Today we focus on PMSI’s just-released report…

The big news - narcotic utilization in the first year of the claim was down 7 percent from 2010 to 2012.  There was an increase in NSAIDs, indicating physician prescribers were substituting NSAIDs for narcotics, a major step in the right direct.  For all claims, narcotic utilization declined 3.2%, an indication that there was less of a decrease among older claimants. Nonetheless, the top drug by spend continued to be Oxycodone at 9.1%

PMSI’s 2013 Annual Drug Trends Report covers three years of in-network transactions totaling just under $1 billion in spend spread over 5.7 million transactions.  Their researchers use cost per day and average days supply to level set for changes; for 2012, cost per day was up 2.8% while utilization declined 2.7% for essentially no change in cost year over year.  This was driven in part by converting more claimants from retail to mail order and associated 21% lower price per day supply. (mail order meds are a lot cheaper)

The report also cites the key role of generic conversion – PMSI clients’ cost for generics was 75% less than for brand ($2.83 v $11.09).  Overall, both generic efficiency and generic fill rates were up; however this varies by age of claim as rates decreased as claims age.

The report includes several excellent charts and maps detailing various regulatory and legislative issues – physician dispensing regs, repackaging reimbursement limits and the like.  There’s also an excellent graphic showing how carisoprodol dispensed by a physician can cost more than ten times the retail pharmacy’s cost ($138.60 v $11.03 – p 10)

One item of interest – the cost per physician-dispensed pill in HI was $4.71 v $1.68 for pharmacy in 2012…

Finally, the big PBM’s clients saw good results from their acetaminophen program as it cut number of claimants taking more than recommended dose by 40%.

Considering this report and Progressive Solutions’, it appears that PBMs have been able to make some progress in reducing the use of narcotics on new claims.  It may also be that physician prescribing patterns are changing; I’m looking into that through a couple of sources to see if we can discern any overall pattern.

More to come.

 

 

Workers’ comp drug trends – good news at last – Part 1

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There are three workers’ comp drug trend reports out this week; we’ll look at each one (in order I received them).  A cautionary note; it is difficult to compare PBMs’ performance on the basis of their reports; the metrics and basis for those metrics varies, their books of business are different (some have lots of very old claims, others have more state funds than national clients and there are also other differences in payer mix with some payers much more aggressive and willing to work with their PBM on specific issues).

First up is Progressive Solutions’ version. The big PBM saw an average reduction in spend per claim of 0.5 percent, driven by a combination of fewer days’ supply per script and fewer scripts per claim.  Progressive has invested heavily in predictive analytics; the payoff has been a significant drop in opioid usage for targeted claims (15% decrease in morphine equivalents).  The data shared in their report parses out the various factors driving claim cost and risk, with “pharmacy behavior”(number of prescribers, number of pharmacies, medications) becoming increasingly significant as a claim ages.

Progressive’s clients are seeing a reduction in opioids as well, with both long- and short-acting opioid script volume down. This has cut per-claim costs for opioids by 4.2 percent.

The report has an extensive and accessible section on legislative and regulatory trends, with discussions of state regs on repackaging, compounds, and physician dispensing.

The takeaways are this:

  • Analytics and modeling can drive much better results by focusing resources on the big problems. The PBM and WC industries need to continue to up their game, and get smarter about where, when, and how to address cost drivers – generic, one-size-fits-all approaches are costly, inefficient, administratively burdensome, and annoy claimants and physicians.
  • The impact of regulations and legislation on WC pharmacy, and thus workers’ comp costs and outcomes, is increasingly important.  Physician dispensing and compounding are two of the biggest profit-creators for those interested in sucking money out of the comp system.  It behooves all stakeholders to thoroughly understand these issues and get involved.
  • Opioids are being addressed – there’s much to do but a strong focus and assertive programs can and do deliver results.

Finally, Progressive’s report is well-designed and well-written.  Kudos to the folks who actually took all that research and translated it into language the rest of us can understand.

 

 

A tough week for work comp in Florida

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Florida’s legislature is working thru several workers’ comp bills – and the news isn’t good.  A PDMP bill has been emasculated; Florida’s prescription drug monitoring program won’t require physicians check the system before prescribing drugs.

And while there’s ongoing negotiations on a bill addressing physician-dispensed drugs, at this point it looks like Florida’s employers will have to pay more for physician-dispensed drugs than they would if those drugs were dispensed by retail pharmacies.

This is a fluid situation and may well change – and we can only hope it does. We are also wondering where the retail pharmacies and food/drug combos are in the discussion; there is no evidence that physicians pay more for their drugs than drug stores do, so forcing employers and taxpayers to cough up millions to line the pockets of dispensers and their enablers is nothing more than extortion.

That said, it is clear that the Florida Medical Association has once again ignored their Hippocratic oath to do no harm; according to Mike Whitely’s piece in WorkCompCentral the FMA  got the bill’s sponsor, Rep. Mike Fasano R New Port Richey, to “drop a requirement that Florida physicians consult the PDMP before prescribing drugs on Schedules II and III of the US Drug Enforcement Administration’s controlled substances list.”

Notably Rep. Fasano appears to have removed that requirement in hopes that in so doing the bill would have a better chance of passage.  That said, the FMA’s position is short-sighted and self-serving.  According to the vice chair of the FL PDMP Foundation, it “makes sense for doctors to check the database and it takes 30 seconds.” [emphasis added].

So.  Thirty seconds is more important to the FMA – and their members – than preventing doctor-shopping, reducing criminal behavior, and saving lives.

Lest you think I’m being hyperbolic, doctor shopping kills people. And speaking about the Tennessee law requiring docs check the PDMP database before prescribing, “There’s no question the law there will reduce overprescribing and doctor-shopping, said Gary Zelizer, director of government affairs for the Tennessee Medical Association. Yet reducing over-prescribing, doctor-shopping, and the resulting deaths and injuries is less important than saving 30 seconds.

For those interested in doctor-shoppers’ views on PDMPs, read this.  Abusers hate PDMPs that mandate physician checks of the PDMP before prescribing.

Opioids’ long term impact on workers’ comp – WCRI reports

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Opioids will be the biggest problem the workers’ comp industry faces over the next few years.  WCRI’s hosting a webinar on the issue later this month, and I’d encourage you to sign up (do it fast, there’s a limit on attendees).

For those unaware of recent research on the issue, here are a few of the issues:

  • there’s huge variation among and between the states; according to WCRI’s latest research,  17% of Louisiana claimants who started using opioids were still using them 3-6 months later, compared to about 3 percent in Arizona.  Clearly the risk of addiction/dependency in LA is much higher than in AZ.
  • Less than a quarter of all long-term opioid users were tested for drugs via urine drug screening.  When you factor in drug testing data that indicates a substantial percentage of claimants prescribed opioids don’t have evidence they’re taking them, it is clear employers and insurers are paying millions for opioids that may not be used for the intended purpose (to be generous).
  • In California, claimants prescribed opioids are off work 3.6 times longer; litigation is 60 percent higher, and their claim costs are twice as high as claimants who don’t receive opioids.

If opioids aren’t on your radar, they soon will be.

If not, you must be in Arizona.

What does this mean for you?

Sign up for the webinar

Drug compounding’s continuing problems

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According to the NYTimes, the FDA’s ongoing investigation into compounding pharmacies:

“found numerous unsafe practices at about 30 compounding pharmacies, the same type of facility responsible for the tainted drug that caused a deadly meningitis outbreak last year.

Among the problems found were unidentified black particles floating in vials of supposedly sterile medicines, rust and mold in clean rooms where such drugs are made, improper air flow, and clothing that left workers’ skin exposed.” [emphasis added]

If they aren’t, workers’ comp payers and medical management firms should be paying very close attention to these inspections.  There are three problems with compounds – they tend to be very costly, there is zero evidence that they help the healing process, and there is a wealth of evidence (see above) that compounds can be very dangerous – if not lethal.

Workers’ comp claimants harmed by compounds will incur expenses to address that harm – expense that will have to be covered by the workers’ comp payer.

The payer may also have to provide death benefits for claimants killed by compounds.

States that currently have a compounding problem are likely to see it grow – as it has in California.  States enjoying a compound-free experience are almost certain to be targeted by compounders and their enablers.

The list of FDA-inspected compounders is here.

Rx drug abuse summit – who’s not here

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There are almost 900 people attending the second annual national Rx abuse summit, and many are workers comp stakeholders. There are PBMs, UR firms, testing companies, drug companies, a few clinicians from large payers: but no executives no C-suite residents, no actuaries.

That is precisely why opioids are the single biggest problem in workers comp.

Executives don’t grasp this. With a very few exceptions (Aig’s Benmosche is one, SCIF’s Tom Rowe another), the leadership the workers comp is not paying attention. I suppose this is understandable as they have yet to see the real impact of opioids on their financials. Sure they are aware of the growing influence of opioids and are sorta/kinda focused on drug costs, but most are much more cognizant of other more traditional issues: settlement rates, TRIA, admin expense ratios, market cycles. All important and significant, but I’d suggest nowhere near as important as opioids.

The reality is claimants on opioids for more than six months are at high risk for addiction, are not going back to work, and run up high medical costs. Many of these claimants have nothing more serious than back sprains and strains, conditions that should rarely – if ever – merit opioid treatment.

Until and unless those execs start paying attention, focusing their staffs and resources and government affairs people, the problem is going to get worse.

And until and unless actuaries tell them how much more costly these claims are that’s not going to happen.