Officials Say Texas’ Closed Formulary Is Lowering Workers’ Comp Costs

August 17, 2016

A recent analysis by researchers at the Texas Department of Insurance shows that the Texas pharmacy closed formulary is lowering costs and reducing the use of opioids in the workers’ compensation system, the department announced.

“Other states are interested in the success we’re having in Texas,” said Workers’ Compensation Commissioner Ryan Brannan. “We’re hopeful the closed formulary will continue to be a meaningful tool to reduce costs and decrease the use of drugs that may affect an employee’s ability to return to work.”

Texas’ closed formulary requires prior approval before a doctor can prescribe certain drugs, also known as N drugs. These include 25 brands of opioid pain relievers, muscle relaxants, antidepressants, and cannabinoids.

An extensive analysis of pharmacy data before and after the closed formulary went into effect found that:

  • Total drug costs fell 15 percent.
  • Costs for drugs that are not recommended, so called N drugs, fell by 80 percent.
  • Prescriptions for opioids on the N-drug list dropped 81 percent, and the use of other opioids fell by 8 percent.

The results were a welcome change in the pharmacy trends noted before the move to the closed formulary in September 2011.

A 2007 study by TDI’s Research and Evaluation Group found that about $130 million dollars was being spent annually on prescriptions, half of which was for opioids and certain anti-inflammatories. Drug costs consumed a substantial portion of workers’ compensation medical costs, with growing evidence that these prescriptions might not be the best choice to help employees recovering from injury or illness.

Source: Texas Department of Insurance

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