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Closed-drug formulary bill heads to California governor

Posted On: Sep. 14, 2015 12:00 AM CST

A bill mandating a closed drug formulary for California's workers comp system is heading to Gov. Jerry Brown's desk.

A.B. 1124 was adopted by the state legislature in the final moments of its 2015 session Friday. The bill, introduced and shepherded through the legislative process by Assemblymember Henry Perea, D-Fresno, would establish an evidence-based prescription drug formulary for California's workers comp system, the largest in the United States, by July 1, 2017.

Such a formulary would be designed to curb the abuse and overprescribing of certain medications, particularly opioids.

“The central purpose of our workers' comp system is to ensure injured workers regain health and get back to work,” Mr. Perea said in a statement. “When workers get addicted to dangerous medications, goals of the program are not met.”

A closed drug formulary could save California from $124 million to $420 million, according to a study published in October 2014 by the California Workers' Compensation Institute. States such as Texas and Washington have already adopted such formularies and have experienced significant prescribing and payment reductions in their workers comp programs.

The California bill would require the administrative director of the Division of Workers' Compensation to update the formulary at least quarterly to allow for all appropriate medications, including new ones, and the establishment of an independent pharmacy and therapeutics committee. The committee would comprise physicians and pharmacists to keep political interference out of the process of evaluating new science or new uses of medications, said Mark Pew, senior vice president at PRIUM, a Duluth, Georgia-based medical management company.

It would also require the administrative director to meet and consult with stakeholders, employers and doctors before adoption of the formulary and to publish two interim reports on the division's website describing the status of the formulary.

"The development of the rules and regulations and the definitions of the drug list is going to be an extremely transparent, public process,” Mr. Pew said. “Everybody that has a stake in workers compensation is going to have the ability to participate in that process.”

And there will be a yet-to-be-determined transition period for injured workers to be weaned off medications not considered preferred drugs under the new formulary, addressing a key concern that injured workers could be forced into withdrawal because they could not get access to their prescribed medications beginning July 1, 2017.

"What I envision is smart payers, employers and physicians will get started ASAP on addressing those claims,” he said.

It is now up to Gov. Brown to sign or veto the bill, but given his administration's participation in the process, particularly at the latter stages, "it's a 99% chance Gov. Brown will sign the bill,” Mr. Pew said.