And to kick it off, here are quick facts about work comp pharmacy…
Total workers’ comp drug spend was about $4 billion last year. Others will argue it’s much higher, after 15 years of digging into the data I’m quite comfortable that figure is accurate.
That’s about 13% of total work comp medical spend of $31 billion (using NASI’s industry-standard report as the source).
Work comp drug spend has been steadily – and significantly – decreasing for the last eight+ years; my best estimate is drug costs are down about $1.1 billion since 2010.
This remarkable drop has been driven by dramatic decreases in opioid usage and fee schedule changes; PBM consolidation has also been a driver as PBM pricing has declined over the last several years.
Today there are two major WC PBMs, two mid-tier ones, and a host of much smaller companies with little market share.
In 2017, opioid spend declined to less than a quarter of total drug costs, driven by a 30% drop over the previous two years. The even-better news is patients not taking opioids also don’t need to take drugs to mitigate the side effects; insomnia, depression, constipation, erectile dysfunction, etc. And, the knock-on effects on claim duration and settlements are positive indeed.
Tomorrow we’ll dig into pricing and what’s real – and what isn’t – in the media’s coverage of drug pricing.