After 18 states enacted reforms to limit the prices paid to doctors for prescriptions they write and dispense, this WCRI study finds that physician-dispensers in Illinois and California discovered a new way to continue charging and to get paid two to three times the price of a drug when compared with pharmacies. The study identifies the mechanism that allows doctors in Illinois and California to dispense drugs from their offices at much higher prices when compared with pharmacies. Although this study uses data from two large states, it raises questions for all states where physician-dispensing prices are regulated.

The data used for this report came from payors that represented 46 and 51 percent of all medical claims, respectively, for California and Illinois. The detailed prescription transaction data were organized by calendar quarter so that for each quarter, all prescriptions filled for claims with dates of injury within 24 months of the observation quarter were included. On average for each of the quarters reported, WCRI included 219,572 prescriptions paid for 60,448 claims in California. The same figures were 43,034 prescriptions paid for 12,714 claims in Illinois. The detailed prescription data cover calendar quarters from the first quarter of 2010 though the first quarter of 2013.