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Specialty drugs drive up workers compensation costs

New hepatitis C treatment puts focus on price, usage of medications

Specialty drugs drive up workers compensation costs

With a new hepatitis C drug entering the market at a cost of $1,000 a day and costs rising for other breakthrough pharmaceutical treatments, employers are seeing dramatic cost increases in workers compensation cases where the drugs are used.

“The cases are very rare but can be very expensive,” said Dr. Teresa Bartlett, Troy, Mich.-based senior vice president of medical quality for Sedgwick Claims Management Services Inc.

The U.S. Food and Drug Administration granted approval last month to Sovaldi, a once-daily tablet prescribed to treat and cure hepatitis C. A 28-day supply of the pill carries a wholesale price of $28,000, Foster City, Calif.-based Gilead Sciences Inc., maker of Sovaldi, said in a statement.

Experts expect Sovaldi to be used in workers comp cases for workers exposed to bloodborne pathogens, such as health care providers injured by used needles and first responders exposed to blood at accident scenes.

“I would be very surprised if we don't see it” in comp cases, said Phil Walls, chief clinical and compliance officer at Matrix Healthcare Services Inc., a Tampa, Fla.-based pharmacy benefit manager.

Definitions of what is considered a specialty drug differ, but they typically include prescriptions considered high-cost, treat chronic or complex medical conditions, and sometimes require special handling. The Centers for Medicare and Medicaid Services defines the cost threshold as at least $600 a month. These drugs represent the biggest growth area in the pharmaceutical industry.


In addition to hepatitis risks faced by medical professionals, contact with blood also puts such workers at risk of HIV exposure, which is treated by specialty antiviral drugs such as Truvada and Kaletra, experts say.

Other occupational conditions sometimes are treated with specialty drugs, such as anticoagulants to prevent blood clots in beridden patients, injections for osteoarthritis knee pain and injectable antibiotics for chronic Lyme disease — something to which outdoor workers such as landscapers or park employees could be exposed.

Specialty asthma treatments also can be prescribed for workers who deal with occupation-related respiratory conditions, such as black lung disease for coal miners, said Mark Pew, senior vice president of product development at Prium, a Duluth, Ga.-based medical management company.

While experts estimate that specialty drugs account for 1% of workers comp drug costs, Mr. Walls said they are becoming more prevalent.

The FDA approved 39 new medications in 2012, of which 25 fell into the specialty category, he said.

“We've gone from a period of years ago where no one had heard of specialty (medications) to it being the fastest-growing segment in pharmaceuticals today,” Mr. Walls said. “So as that develops, more and more conditions will be treated by specialty” drugs.


Specialty medications also are becoming costlier, said Tim Pokorney, Tempe, Ariz.-based vice president of clinical services for pharmacy benefit manager Express Scripts Inc. Such drugs cost 11 times more than traditional medications in 2013, compared with being nine times pricier than traditional medications in 2012, he said.

“Specialty medications, although holding great promise for improved health, continue to increase in cost,” Mr. Pokorney said in a statement to Business Insurance.

Experts say employers can help manage the cost of these costly prescriptions if they show up in workers comp claims.

Specialty prescriptions should be reviewed to make sure they are medically necessary, said Joseph Paduda, principal of Madison, Conn.-based consulting firm Health Strategy Associates L.L.C.

“You want to be very sure that the treatment is appropriate and that there's a solid clinical reason for that treatment,” he said.

Employers can work with pharmacy benefit managers on cases involving specialty drugs to be aware of how much they cost and take advantage of volume discounts, experts say.


Sedgwick's Dr. Bartlett recommends that employers establish a workers comp medication formulary to specify drugs that are approved for use by injured workers. By leaving specialty drugs off the formulary, those medications would automatically be subject to review by case managers, clinical pharmacists or doctors who can determine if a medication is necessary and discuss treatment protocols with the claimant's treating physician, she said.

For medical conditions that can be cured, Mr. Paduda recommends having discussions with treating doctors about how long specialty drugs will be used for a patient and what alternatives will be used if the medication isn't effective.

Ask “what happens if this doesn't work, how do you know if it is working and what's the measurement process” for determining effectiveness, Mr. Paduda said.