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States that enacted reforms to rein in the high cost of drugs dispensed by physicians to injured workers face an uphill battle as some doctors find loopholes in the regulations.
These loopholes mean that workers compensation prescription costs remain stagnant or are rising in some states, leading to calls for additional restrictions on physician dispensing, experts say.
Take the case of cyclobenzaprine, a common muscle relaxer that had been on the market since late 2011 and usually prescribed in 5-milligram and 10-milligram doses. In the arena of injured workers, it’s among the most commonly prescribed medications, data shows.
The drug fell under price-control regulations in some states that aimed to reduce the cost-per-pill at the doctor’s office, historically much costlier — as high as five times the cost — than what is packaged at a retail pharmacy.
Enter cyclobenzaprine’s new strength in late 2011: 7.5 milligrams.
The new strength fell outside the scope of the pricing regulations, meaning doctors could prescribe it and still collect at the higher price.
That’s what happened in Florida by 2014, where researchers with the Cambridge, Massachusetts-based Workers Compensation Research Institute found that 41% of the physician-dispensed cyclobenzaprine prescriptions were for the 7.5-milligram strength, per the institute’s most recent examination of the trend.
The new strength is seen by some as a benefit to those who found the weaker dose ineffective and the 10 milligrams too strong, said Fred Ganjian, Burbank, California-based director of sales and marketing at BRP Pharmaceuticals at Bryant Ranch Prepack Inc., which helps physicians dispense medications directly to patients.
“I have doctors saying that 150 milligrams (of tramadol) works better,” he said of another medication — an extended-release painkiller — whose latest strength also falls outside the scope of pricing reforms on the traditional, lower 50-milligram strength of tramadol.
As of June 2017, 22 states have parameters for physician dispensing, with most of the reforms targeting repackaged wholesale pricing of certain drugs and strengths. Eight states, including Texas, do not allow the practice of physician dispensing.
While the new strengths are seen as progress for patients, others suggest something more sinister is at play.
Dongchun Wang, author of the WCRI’s latest study highlighting the newer, more expensive strengths of existing drugs, said doctors lost income with state reforms. She acknowledged that in some cases the newer doses can be prescribed as a convenience to a patient who had been cutting pills in half. But that’s not always the scenario, she added.
“Some of the physician dispensers are trying to dispense in a way that they can maintain their income (by way of) new strengths of the drugs,” she said. “(Pharmaceutical companies) provided a vehicle to dispense those new strengths. … By doing this, doctors can bypass the new rules,” added Ms. Wang, whose study was released in July.
Attempts to reach several pharmaceutical firms were unsuccessful. The Washingtonbased Pharmaceutical Research and Manufacturers of America, which represents biopharmaceutical research companies, declined an interview.
The WCRI study found that three states — California, Florida and Illinois — saw no reduction in the physician share of prescription costs despite a considerable reduction in the frequency of physician dispensing. Other states saw minimal change.
Ms. Wang and other researchers analyzed data from 2011 to 2014 for 26 states and found physicians dispensed fewer prescriptions after states enacted reforms that regulated the prices for drugs dispensed by physicians. Yet physician dispensing was still common in post-reform states, with California, Florida, Illinois, Maryland and Pennsylvania still seeing a large portion — 54% to 64% — of pharmaceutical costs coming from doctors who dispense drugs.
Richard Victor, Boston-based senior fellow at the Sedgwick Institute and former president of the WCRI, said the reforms were “well intended” but fell short of the goals of reducing costs because “whatever the price regulations do there will be other ways to get around it.”
“The underlying problem here is (doctors) are facing a conflict of interest … the more they dispense the more (money) they receive,” he said. “There’s creativity in the supply chain. … It’s clear that regulating prices is readily evaded by the supply chain.” Mr. Victor added that opioids dispensed out of the doctor’s office led to “unnecessary prescribing. Some patients are harmed by physician dispensing.”
Other workers comp experts shared in the frustration of gaining control of drug costs and maintaining better control of what is prescribed.
“Pharma is looking to increase their revenue; physicians are looking to increase their revenue,” said Silvia Sacalis, a Tampa, Florida-based licensed pharmacist and vice president of clinical services for Healthesystems L.L.C., who questions any doctor who prescribes a stronger dose of medication that can be dispensed at a higher cost in their office. “Where’s the ‘do-no-harm?’”
“It’s a pure-profit motive,” said Joe Paduda, Skaneateles, New York-based president of CompPharma L.L.C., who has spoken out against the practice. He said the answer is for states to mandate better control of where injured workers can obtain prescriptions.
“The single most powerful thing states can do would be to allow employers to direct injured workers to use contracted pharmacies,” he said.
Mr. Victor agrees, with reservations.
“That’s one of the options (yet) that’s not an easy thing to get enacted,” he said. “Worker advocates feel very strongly about patients’ freedom to choose doctors and pharmacies that they prefer.”
The practice of patients getting their prescriptions filled at their doctors’ offices fell under scrutiny more than a decade ago, as workers compensation payers noticed how the medications were costing significantly more than what was doled out at a traditional pharmacy.