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Physician dispensing in comp – two small victories

Yesterday the Illinois Workers Comp Commission voted in favor of a regulation that would tie reimbursement of physician dispensed drugs to the price set by the original manufacturer. While this regulation has to pass thru a legislative committee before it can be implemented, that was good news indeed for Illinois’ work comp claimants, employers, and taxpayers.
The meeting was well-attended, and included representatives from the insurance industry, health care providers, PBMs (yours truly and others) and industry trade groups.
Noticeably absent were the drug chains, including Walgreens. I’m at a loss to understand this, as the WCRI report released last week showed 62% of pharmacy costs in IL are from physician-dispensed drugs. Those patients are NOT going to their corner pharmacy if they are getting their meds from their docs.
When patients get their medications from their doctors, they are at greater risk as the doc likely isn’t fully aware of the other medications the patient is taking, a risk that would be substantially reduced if they went to their pharmacy, where the pharmacist likely knows if there’s going to be a problem due to an interaction between the new drug and the patient’s current medications. Walgreens et al knows this is one of their big value propositions – the added safety inherent in going to your pharmacist.
From a purely financial point of view, the chain drug stores are missing out on thousands of store visits as well, where the claimant picks up their meds and likely some toiletries and perhaps milk too.
There are over 1900 pharmacies operating in Illinois; if one was at the meeting they didn’t announce themselves.
On a broader front, the Federal work comp program implemented an almost-identical requirement about a month ago in a move undoubtedly applauded by everyone who pays income tax to the Feds. No longer will physicians dispensing drugs to Federal workers be able to inflate costs by using repackaged medications costing several times more than the same drug bought at a retail pharmacy.
There’s bad news as well, but we’ll save that for another time.

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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