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Introduction of drug formularies sheds light on comp costs

Posted On: Mar. 30, 2023 12:48 PM CST

drug formularies

Studies released Thursday by the Workers Compensation Research Institute show how the adoption of drug formularies in five states affected workers compensation costs.

The studies looked at the effect of formularies on prescription drug utilization and associated costs in the Arkansas, California, Indiana, Kentucky and New York comp systems.

All five states adopted prescription drug formularies between 2018 and 2019. They are now among a total of 17 states across the U.S. that have drug formularies in comp, which are a list of brand name and generic drugs approved to treat work-related injuries.

In all five studies, WCRI researchers used data from prescriptions filled between January 2016 and March 2021, by workers within 12 months of injury.

In Arkansas, quarterly trends in prescription utilization and payments show steady declines occurred throughout 2017 and 2018, the timeframe during which the state established its formulary, although researchers said comp system changes could also be attributed to other prescription drug policies implemented around the same time.

Still, Arkansas, during the study period, saw larger reductions in prescriptions and drug payments per claim compared with states with no drug formularies.

In New York, prescription payments per claim decreased by 34 percent in the third quarter of 2019, and quarterly trends in drug utilization and costs in that state “provide clear evidence of the impact of the drug formulary,” researchers wrote.

In California, drug payments per medical claim decreased by 39 percent between 2017 and 2018, which was attributed to the implementation of the formulary.

In Indiana and Kentucky, researchers said drug formularies had smaller effects on prescription utilization and payments.