Studies link higher cost of prescription drugs to doctor dispensing

Two studies released Wednesday by the Cambridge, Mass.-based Workers Compensation Research Institute document the high cost of physician-dispensed prescriptions.

In Pennsylvania, for example, the WCRI found that doctor-dispensed Vicodin cost three times more than when the narcotic pain medication is prescribed to injured workers by a pharmacy. On average, doctors charged $1.22 per pill compared with $0.37 per pill charged by pharmacies.

“In many states across the country, policymakers are debating whether doctors should be paid significantly more than pharmacies for dispensing the same drug,” Richard Victor, the WCRI executive director, said in a statement. “One question for policymakers is whether the large price difference paid when physicians dispense is justified by the benefits of physician dispensing.”

The WCRI also documented the growth of physician dispensing in Pennsylvania, saying the state's doctors dispensed 23% of workers comp prescriptions in 2011 while receiving 38% of all pharmacy spend on work comp prescriptions.

Three years earlier, Pennsylvania doctors had dispensed 17% of all workers comp prescriptions, totaling 18% of all workers comp pharmacy spend, according to the study titled “Physician Dispensing in the Pennsylvania Workers' Compensation System.”.

In Maryland, meanwhile, the WCRI found that, on average, doctor-dispensed Vicodin cost $1.46 per pill versus the $0.37 per pill charged by pharmacies.

Overall, claims data shows that physician-dispensed drugs in Maryland often cost more than double the price paid for the same medications purchased from pharmacies, according to WCRI's study titled “Physician Dispensing in the Maryland Workers' Compensation System.”.

The studies also found doctors charged significantly more for over the counter medications.

For instance, Prilosec OTC costs about $0.67 per pill at a drugstore but costs $7.43 when dispensed by Pennsylvania physicians, according to the WCRI's findings.

More information about the studies is available here.