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Unlisted drugs cause price spikes in Calif. comp system

Posted On: Mar. 27, 2019 7:00 AM CST


(Correction: the below article has been corrected to reflect that the cost of unlisted drugs is increasing rather than overall prescription drug costs in the California workers comp system).

Topical pain-relief creams, brand-name pharmaceuticals and other drugs that have yet to make it into the California formulary are among those responsible for a spike in the cost of unlisted drugs being prescribed to injured workers, experts say.

Specifically, 38.9% of drug payments for injured workers in the first half of 2018 were for “not listed” drugs, representing an 11.5% increase year-over-year and since the state initiated its medical treatment guidelines on Jan. 1, 2018, according to a study released on March 20 by the California Workers’ Compensation Research Institute. But those drugs made up only 16.4% of the overall number of drugs prescribed, according to the study by the Oakland, California-based research organization.

“It is a cause for further attention,” said Alex Swedlow, president of the institute.

Like most formularies, California is focused on including medications typically prescribed for a workers compensation injury and little outside of that, said Dr. Paul Peak, assistant vice president of clinical pharmacy for Memphis, Tennessee-based Sedgwick Claims Management Services Inc.

Drugs listed in the formulary are either exempt or nonexempt. Exempt drugs call for utilization reviews — all opioids fall into this category — whereas nonexempt drugs are free to prescribe under the system and must be covered. 

But the unlisted drugs making their way into the system are complicating this equation, experts say.

And these drugs can be extremely expensive, said Dr. Peak. For instance, in the event of a needlestick injury, a worker may be prescribed a few months of HIV antiretroviral Truvada, which averages about $2,000 a month, according to the National Institutes of Health.

And there’s a “fair amount” of dermatological medicine for pain management being prescribed, but such compound drugs are “controversial,” said Mr. Swedlow.

Private-label topicals are troublesome, according to Dr. Robert Goldberg, chief medical officer and senior vice president for Healthesystems LLC in Tampa, Florida. The formulary substantially reduced the use of compounds, which previously made up a significant amount of the spend, but these topicals have moved into this space, he said. These products, which are rebranded over-the-counter agents like Icy Hot or Bengay prescribed for soft-tissue injuries, he said.

But compound or mail-order pharmacies are taking these over-the-counter products, often combining them with another readily available ingredient, and rebranding them with names like Medrox, Terocin or Medi-Derm to create private-label topicals they then market to physicians to prescribe, he said.

“They’re legal products, but they haven’t been (U.S. Food and Drug Administration) approved and they’re really expensive,” he said. “This item is a new bulge in the pharmacy balloon spending, and until something gets done by the state or the FDA, these are going to be an issue for payers to have to deal with.”

In addition, some unlisted drugs are “either not appropriate, new or unique” to the injured worker’s diagnosis, said Dr. Steven Feinberg, a pain expert and founder of the Palo Alto, California-based Feinberg Medical Group who also sits on the California Division of Workers’ Compensation Pharmacy and Therapeutics Committee.

But some unlisted drugs make sense as injury treatments such as cardiovascular drugs not routinely prescribed in workers comp or branded antianxiety medications, said Dr. Goldberg.

Drugs not mentioned in the formulary can still be prescribed and filled with the doctor requesting authorization “as long as the treating physician can state that the use of that drug is supported by evidence-based literature,” Mr. Swedlow said.

Meanwhile, the formulary is constantly changing, with the committee meeting quarterly. Unlisted drugs could eventually be added to the formulary and some drugs have already gone from unlisted to listed, said Mr. Swedlow. For example, the top not-listed drug prescribed – a sedative called zolpidem tartrate — is now on the formulary as of March 2019. 

Researchers for the report examined 658,057 prescriptions in the workers comp system from Jan. 1 to June 30 for 2016, 2017 and 2018 to gauge the impact of the formulary that went into effect on Jan. 1, 2018 — not including the latest prescribing patterns.