Soaring Drug Prices Affecting Cost of Treating Workers’ Compensation Claims
By: Paylocity, August 2015
Drug prices — especially the cost of specialty drugs — are on the rise. This trend affects all areas of health care, but especially workers’ compensation. Average drug costs related to workers’ comp claims are going up, Stephanie Goldberg writes for Business Insurance.
The average cost of a worker’s compensation claim increased in 2014, even while the number of prescriptions per worker went down, Goldberg writes, citing Coventry Workers’ Comp Services’ study, the 2014 First Script Drug Trends Analysis. “Due primarily to a 10 percent increase in the average wholesale price of medications commonly prescribed to injured workers, the overall average cost per claim rose 7.3 percent in 2014 compared with 2013,” Goldberg writes.
The average number of prescriptions per injured worker went down 5 percent last year, and the use of generic drugs increased almost 6 percent. Eighty-two percent of injured workers are treated with generic drugs. The increase in drug prices affects many more than those involved with workers’ comp. It’s a nation-wide trend, Liz Szabo writes for USA Today.
“Spending on prescription drugs last year reached a record-breaking $374 billion, up 13 percent from 2013, with the largest percentage increase in more than a decade,” Szabo writes, citing information from America’s Health Insurance Plans. “Almost half of that increase came from drugs launched in the past two years.”
Some of the most expensive are known as breakthrough drugs, Szabo writes. These are “fast-tracked by the Food and Drug Administration because of their potential to fill an unmet need,” Szabo writes. “Over the next decade, just 10 of these breakthrough drugs will cost the government nearly $50 billion.”
But these aren’t the only prices affecting workers’ comp, Sheena Harrison writes for a different Business Insurance story. “Higher generic drug prices are showing up in workers compensation claims and payers can have a tough time slowing those increases,” Harrison writes, citing information from a 2014 U.S. Senate subcommittee hearing on generic drug prices. “Certain generic medications used in comp claims — such as antibiotics, antidepressants and opioid painkillers — saw price increases ranging from 8.5 percent to nearly 2,050 percent in 2014 (from) 2013.”
Those administering workers’ comp benefits can try to alleviate the trend by carefully monitoring injured workers’ drug use, especially paying attention to dosage and time limits. They might also work to switch patients to more affordable drugs that are still effective, Harrison writes. “For now, experts recommend considering whether injured workers can be treated with medications that have similar therapeutic effects and cheaper costs,” Harrison writes.
“While it’s true that the price for some generics has increased,” Harrison writes, quoting PBM Express Scripts, “on the whole, generic medications continue to deliver significant cost savings by providing cost-effective alternatives to brand name medication.”
