CompPharma offers retrospective and real-time pharmacy benefit management (PBM) audits along with a range of consulting services to workers’ compensation payers.
The company just published its 17th Annual Survey of Prescription Drug Management in Workers’ Compensation.
The survey results indicate that workers’ compensation prescription drug costs have decreased by approximately $1.8 billion or 38% over the last decade. Several drivers contributed to this decline:
– – Massive decrease in opioid utilization and impact on co-prescribing;
– – Significant reduction in California’s pharmacy fee schedule;
– – A very competitive PBM market; and
– – Consolidated PBM industry providing greater buying power.
The structural decline in drug costs we have seen for the last nine years continued in 2020 as workers’ compensation pharmacy costs decreased 12.3% across all 28 payers surveyed. This follows 2018’s 10.1% and 2017’s 9.8% decline.
While the double-digit drop is quite significant, it is important to note that there was wide variation among the respondents with changes ranging from a decrease of 27.9% to a 10% increase. There was more variation this year than in any recent survey, likely due to the broad range of respondents, e.g., public entities, state funds, and payers of last resort and their exposure to COVID-19. Four respondents reported declines greater than 20%.
Fully half of all respondents attributed the drop in spend to fewer claims and/or the impact of COVID. Another key contributor was the continuation of significant year-over-year reductions in opioid spend.
Here are the five top takeaways from this year’s survey:
1. Total workers’ comp drug spend was approximately $3 billion in 2020.
2. Opioid spend in 2020 dropped to 17% of total drug spend across all respondents.
3. There was a significant decrease in opioid utilization in 2020.
4. There is no consensus regarding the most problematic issues in workers’ comp, rather an abiding concern that the industry is still challenged by physician dispensing, mail-order pharmacies, and over-prescribing physicians.
5. Respondents expect a lot out of their PBMs, including a more proactive approach, more useful and actionable data, and more transparency on pricing. Some – but by no means all – respondents acknowledge their own staff must do a much better job to support their PBMs’ clinical management efforts.