Costly Prescriptions Jack Up WC Bills

A greater use of pricier painkillers and other prescriptiondrugs to treat employees hurt on the job is sending workerscompensation costs soaring, an insurer study has found.

Ken Martino, senior vice president of Specialty Risk Services, asubsidiary of The Hartford Financial Services Group, said that “theuse of drugs and a shift to more costly drugs,” was behind a 67percent cost increase his company has tracked over the past twoyears.

The Hartford said it has contracted with a pharmacy benefitsmanagement program, Tmesys, a service of the PMSI division ofPharMerica, as one of a number of steps to put a damper onprescription drug costs. “We think we are well on the way” toreducing expenses, said Mr. Martino.

In examining its drug costs, the company did a ranking of 25medications. The most money the company spent on prescriptions wasfor the time-released pain reliever Oxycontin, followed by twoanti-inflammatory drugs, Celebrex and Vioxx, according to Mr.Martino.

He noted that, in the past, two otherpainkillers–Relafen and Daypro–were among the top 10 on the list.They cost about $1.50 per dose, he said. Now, he pointed out thatRelafen ranks 22nd on the list, while Daypro has dropped offentirely. Celebrex and the other drugs that have taken their placecost from $2.50 to $3.00 a dose, he said.

The volume of Vioxx prescriptions, according to The Hartford,jumped 908 percent last year compared with 1999.

Zanaflex, an Elan Pharmaceuticals drug for muscle spasms, wasfound to have gone from 25th to 14th on the list–with volumeincreasing 567 percent.

Duragesic, a patch that delivers medication to relieve localizedchronic pain, jumped from 17th to eighth in the rankings followinga 169.2 percent cost increase over the past two years.

Mr. Martino said that The Hartford–by written premium theeighth-largest workers comp writer in the country–typically findspain medications being prescribed for workers' comp patients torelieve back, knee and shoulder problems.

The Hartford and Specialty Risk Services, which is a third-partyadministrator, said that high prescription costs should beaddressed on four fronts:

Analyze data to understand trends and improve outcomes.

Inform injured workers and healthcare service providers.

Enhance pharmacy utilization management.

Fight prescription fraud and abuse.

According to The Hartford, its analysis found that thehigher-priced drugs were being prescribed for conditionssuccessfully treated by other medications.

Providing information to injured workers and physicians aboutalternatives and implementing a pharmacy benefit managementprogram, Mr. Martino said, “are both crucial in helping to controlworkers' compensation costs.”

The Hartford said its pharmacy benefits management programoffers its workers' comp customers access to more than 90 percentof the nations retail pharmacies.

According to the company, besides saving workers' comp clientsmoney through retail pharmacy discounts and generic drugsubstitution when appropriate and permissible, a pharmacymanagement program can flag potential side effects or otherdangers, and bring these to the attention of the pharmacist orhealthcare providers.

As an example, the insurer said, a painkiller might causestomach problems or sleeplessness, requiring additional medication.Other medicines might be addictive and should only be used for ashort period.

A pharmacy benefits management program, the company said, coulduncover unusual usage patterns, which might indicate fraud, theinsurer warned.

The company said other solutions for reducing drug costs includeintroduction of new state legislation to increase generic drug useand implementation of more utilization controls.

According to Mr. Martino, prescription regiments are sometimesmore effective when coupled with other treatment modalities such asphysical therapy.

He noted that an increase in prescription drug volume ratherthan price has been a general market trend.

Reproduced from National Underwriter Property &Casualty/Risk & Benefits Management Edition, May 6, 2002.Copyright 2002 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.