Express Scripts Tackles Physician-Dispensed Drug Costs Under Workers’ Compensation

Express Scripts, a nationwide prescription manager of more than a billion prescriptions each year, has created a new program to help workers’ compensation payers save money on medications.

The new product is based on the findings of a pilot study designed to encourage injured workers to use clinically equivalent generic medications. For example, the pilot found that injured workers who were sent a “social responsibility” letter — which explained how their prescription drug choices could help control the rising cost of healthcare — were 60 percent more likely to choose a generic equivalent.

In the same way, the new letter program will inform injured workers about the higher costs associated with physician-dispensed medications.

“We use principles of behavioral science to help injured workers make better decisions about their prescription drug treatment and save payers money,” says Jennifer Kaburick, director, workers’ compensation product management & strategy. “People have the best intentions, but sometimes, inertia and inaction lead to poor decisions, which add needless costs to our nation’s prescription drug bill.”

Kaburick says their workers’ compensation clients want a way to address the issue of physician dispensing and help control their pharmacy costs.

Physicians who repackage and dispense medication to workers receiving treatment for on-the-job injuries are often paid from 60 percent to 300 percent more for the same medication, according to industry research. When comparing workers’ compensation claims from 2007-2008, to those from 2010-2011, the Workers’ Compensation Research Institute (WCRI) found that the cost of physician-dispensed medications rose rapidly from 2007 to 2011 in many states while the prices paid to pharmacies for the same drugs changed little or fell. This can add a significant amount of waste to pharmacy spending for workers’ compensation payers and contributes to rising treatment costs.

The Cost of Physician Dispensing

When examining the impact of physician dispensing, WCRI research showed that:

• Illinois saw the fastest growth in physician dispensing — from 22 percent to 63 percent of all workers’ compensation pharmacy spend.
• In Florida, the share of cost for these drugs grew from 43 percent to 62 percent.
• The average price per pill paid for hydrocodone, a commonly used narcotic prescribed for pain management, increased 78 percent in Maryland, 48 percent in Wisconsin and 23 percent in Pennsylvania when dispensed from a physician’s office.
• Some physician dispensers wrote prescriptions for drugs that were available at pharmacies over the counter and were paid prices 5 to 15 times higher.

Topics Workers' Compensation Talent