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State caps on prescription drug prices reduce workers comp costs: WCRI

State caps on prescription drug prices reduce workers comp costs: WCRI

State regulations that cap the prices doctors can charge when dispensing pharmaceutical drugs work effectively to reduce workers compensation costs, yet they do not limit patient access to pharmaceuticals, a study released Thursday reports.

The study from the Cambridge, Mass.-based Workers Compensation Research Institute examined results from a 2007 California law that caps the price doctors can charge for pharmaceuticals they dispense.

The California law has become a model for many other states, according to the WCRI. But critics contend such price regulations may discourage doctors from dispensing drugs and discourage patients from getting the prescription drugs they need.

But California's post-reform experience shows physicians continued to dispense pharmaceuticals even when prices decreased. Before the reforms, 55% of all prescriptions were dispensed from physicians' offices and three years later 53% of all prescriptions were physician-dispensed.

“So patients had similar access to physician-dispensed medications, but at a much lower cost,” WCRI concluded.

For example, for the commonly prescribed drug Vicodin, California doctors were paid 85 cents per pill before the 2007 reforms while pharmacies were paid 43 cents per pill. After the reforms, doctors received 52 cents per pill.

The study, “Physician Dispensing in Workers' Compensation,” relied on data from 5.7 million prescriptions paid under 758,000 workers comp claims in 23 states. More information is available here.