Report Examines First-Year Impact of California’s New Drug Formulary

September 3, 2019

A new report shows that an evidence-based drug formulary put into effect by the California Division of Workers’ Compensation over a year ago may be working.

The formulary went into effect Jan. 1, 2018. It was intended to: reduce frictional costs in the workers’ compensation system; restrict inappropriate prescribing, especially those that relate to opioids; and ensure that injured workers receive medically necessary medications in a timely manner.

The Workers’ Compensation Insurance Rating Bureau of California reviewed the impact of the new drug formulary on prescribing patterns and pharmaceutical costs based on WCIRB pharmaceutical transaction information through the first year of implementation.

Findings include:

  • The share of prescriptions of drugs not subject to prospective utilization review in accordance with the formulary rose by 41% compared to the pre-2018 level, while that of drugs subject to prospective utilization review declined by 18%.
  • The use of opioids, compounded drugs, physician-dispensed drugs and brand name drugs with generic alternatives dropped sharply in 2018, the first year of the formulary.
  • While pharmaceutical costs had been declining prior to the implementation of the formulary, the decline accelerated during 2018 suggestive of the drug formulary impact.

The full report is available on WCIRB’s website.

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