WCRI Study of Penn., Md. Finds Vicodin Much Costlier When Dispensed by Doctors

September 9, 2013

A new study from the Workers Compensation Research Institute (WCRI) says the average price paid for physician-dispensed Vicodin — a commonly dispensed narcotic pain medication in Pennsylvania and Maryland — was approximately three times as high as the price paid for the same drug dispensed at a pharmacy.

“In many states across the country, policymakers are debating whether doctors should be paid significantly more than pharmacies for dispensing the same drug,” said Dr. Richard Victor, WCRI’s executive director.

“One question for policymakers is whether the large price difference paid when physicians dispense is justified by the benefits of physician dispensing.”

The WCRI said that in Pennsylvania, the average price of the physician-dispensed Vicodin was $1.22 per pill, versus $0.37 when dispensed at a pharmacy. In Maryland, the average price of the physician-dispensed Vicodin was $1.46 per pill, versus $0.37 when dispensed at a pharmacy.

Chart courtesy of the Workers Compensation Research Institute

The WCRI said physician dispensing has been growing rapidly in Pennsylvania. In 2011, physicians dispensed 23 percent of workers’ comp prescriptions and were paid 38 percent of what was spent for all prescriptions for injured workers. This was an increase from 17 percent of all prescriptions and 18 percent of total prescription costs three years earlier.

The WCRI said prices paid to physician-dispensers for many common drugs also rose over the study period in Pennsylvania — while prices paid to pharmacies for the same drugs changed little or decreased.

For example, the average price paid for physician-dispensed Vicodin rose 47 percent in three years in Pennsylvania. Over the same period, the average price paid for the same drug dispensed at pharmacies changed little at 2 percent in the state. Similar patterns were seen for many common drugs, according to the WCRI.

The WCRI ‘s study also found that a number of drugs with over-the-counter strength were commonly dispensed by Pennsylvania physicians at a higher price compared with the price at a pharmacy for the same drug. One such drug was Prilosec OTC, which costs about $0.67 per pill at Walgreens. However, the WCRI said, when Pennsylvania physicians dispensed the drug, they were paid an average of $7.43 per pill.

The data used for the WCRI’s report came from payors in Pennsylvania that represented 41 percent of the claims in the state workers’ comp system. There were 40,470 claims included that had more than seven days of lost time with injuries arising from October 1, 2007, to September 30, 2011, and prescriptions filled through March 31, 2012.

The WCRI study found similar trends in Maryland, where the average prices paid to physician-dispensers were often more than double the prices paid for the same drugs dispensed at a pharmacy.

Chart courtesy of the Workers Compensation Research Institute

The WCRI also found that in Maryland, prices paid to physician-dispensers for many common drugs increased over the study period while prices paid to pharmacies for the same drugs typically fell over the same period.

For example, in Maryland, the average price paid for physician-dispensed Flexeril, a common muscle relaxant, rose by 16 percent in three years. Over the same period, the average price paid for the same drug dispensed at pharmacies decreased by 15 percent in Maryland, the WCRI said.

The study also found that a number of drugs with over-the-counter strength were commonly dispensed by Maryland physicians at a higher price compared with the price at a pharmacy for the same drug. One such drug was Zantac, which costs about $0.35 per pill at Walgreens. However, the WCRI said, when dispensed by Maryland physicians, the same drug costs $3.40 per pill.

The data used for the report on Maryland came from payors in Maryland that represented 37 percent of the claims in the state workers’ compensation system. There were 16,860 claims included that had more than seven days of lost time with injuries arising from October 1, 2007, to September 30, 2011, and prescriptions filled through March 31, 2012.

The Cambridge, Mass.-based WCRI is an independent, not-for-profit research organization dedicated to public policy issues involving workers’ compensation systems.

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