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Paduda: Drug Price Fixing's Impact on Workers' Comp

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The generic drug manufacturers’ price-fixing scheme raised prices by up to 1,000%. But there’s good news for workers’ comp payers, as the impact has been minimal.

Joe Paduda

Joe Paduda

Here’s why.

Workers’ comp is mostly about trauma treatment and pain management; relatively few drugs are involved. Contrast that to Medicaid, Medicare and health insurance, which cover all conditions and have a much broader formulary.

Contrary to what others have opined, this didn’t have any significant impact on workers' comp, because there were very few “work comp” drugs affected by the price fixing.

Here’s some of my conversation with Jim Andrews, of Clinical Consulting:

MCM: In your view, how did the alleged price fixing affect workers’ comp payers?

Andrews: Since WC utilizes specific drug classes, the impact of these 100 drugs could/would be significantly less than that of the commercial and governmental markets (especially Medicare and Medicaid). A quick scan of these drugs (without reviewing the larger WC pharmacy benefits manager annual drug trends) reveals that there are blood pressure medications, antibiotics, birth control, dermatological, blood thinners, etc. I do not see (might have missed it) narcotic pain medications.

So the overall cost impact from these companies' activities do not significantly impact WC by themselves.

MCM: What medications commonly used in workers’ comp may have been involved?

Andrews: Generic Celebrex (celecoxib), generic Neurontin (gabapentin) and generic ketoprofen represent some of the more commonly prescribed drugs utilized today.

[These drugs] didn’t seem to detail the same level of price support that some of the other drugs had, e.g., pharmacy and group purchasing organization involvement.

[MCM: Note data from workers’ comp PBMs indicate the these three drugs account for about 7% of total drug spend].

MCM: There’s a difference between drug reference price (average wholesale price, etc.) and the actual price paid. Does the report provide any insight into whether the price fixing actually affected the price paid?

Andrews: It is unclear to me whether the purchase price for these channels actually increased or whether the drug reference price, e.g., AWP, increased.

What does this mean for you?

Yes, the price fixing affected workers’ comp, but not much.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.

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