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NCCI’s report on drugs in Workers comp

Workers’ Comp Insider has an excellent summary of NCCI’s recent report on prescription drug costs in workers’ comp. Author Jon Coppelman raises some interesting questions, including:
“why are doctors relying on brand names, when there are very powerful generic drugs available for pain? Why prescribe Oxycontin? Why is Neurontin so popular?
Is this what consumers want?”
Coppelman rightly cites the power of detailers, the armies of attractive, intelligent, well-dressed primarily young men and women who call on physicians to encourage them to write scripts for their particular drugs.
I would also note that PBMs make money only when scripts are filled through their contracted pharmacies. Therefore, while there is indeed an incentive to the PBM to drive network penetration, there is also no incentive to prevent scripts. Certainly some PBMs work hard to “do the right thing” and there are some notable successes, but when they are financially motivated to fill scripts, there is somewhat of a conflict of interest.
Moreover, some PBMs do not understand the WC business, but are jumping into the market because margins are much more attractive than those in group health.
What does this mean for you?
Watch drug utilization growth carefully, learn about this business, and start talking to your PBM about alternative fee structures. There is no quick answer but with drugs accounting for 12% of WC medical spend, it is well worth your time to look for a longer term solution.

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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