Author: WorkCompAcademy

The Canadian government announced final regulations on Friday that should cut billions of dollars from patented drug prices that are among the highest in the world, overcoming heavy opposition from pharmaceutical companies who may eventually challenge the new rules in court.

The biggest reform to Canada’s drug price regime since 1987 would save Canadians C$13.2 billion ($10 billion) over a decade. The rules will save money for patients, employers and insurers including the government at the expense of drug company profits. They also could eventually cut the earnings of drugmakers in the United States, the world’s largest pharmaceutical market.

Minister of Health Ginette Petitpas Taylor said the new rules would lay the foundation for a new national drug program. Prime Minister Justin Trudeau’s government is expected to announce a program to cover the cost of prescription drugs for some or all Canadians, but the program’s scope is not yet clear.

Canada’s approach to drug pricing is unusual. Rather than bargaining prices down, the PMPRB declares that some prices are an illegal abuse of patent rights.

Drugmakers base their list prices on the agency’s published guidelines. When there is disagreement, PMPRB staff can challenge drugmakers at an internal tribunal. Most cases are settled, but appeals go to federal court and beyond.

In the past, drug companies have gone as far as the Supreme Court of Canada to challenge PMPRB guidelines. With new regulations come new guidelines, and the potential for fresh court challenges.

“We anticipate a considerable uptick in litigation, at least initially, as the industry patentees test the boundaries of the new regime,” said Douglas Clark, executive director of the PMPRB, on a call with reporters. “That’s to be expected any time you substantially change rules.”

Global drugmakers, including Johnson & Johnson , Merck & Co and Amgen Inc , argued against the draft plan.

While the government’s focus is on reducing domestic patented drug prices that are among the highest in the world, the new policy could eventually have consequences south of the border.

The Trump administration in July said it would allow U.S. states and other groups to start pilot programs related to importing drugs from Canada. It has also said it may start determining what the U.S. government healthcare program Medicare pays for certain medicines based on prices in some other countries, including Canada.

Reuters reported in February that pharmaceutical lobby groups had tried to head off the Canadian reforms with an offer to give up C$8.6 billion in revenue over 10 years, freeze prices or reduce the cost of treating rare diseases. Drugmakers argue the reforms could limit Canadians’ access to new medicines.

The government said many countries with lower prices have more pharmaceutical industry investment and access to drugs that meets or exceeds Canada’s.

An ex-physician pleaded guilty to federal criminal charges for illegally prescribing and distributing the semi-synthetic opioid painkiller oxycodone to undercover operatives who visited the physician’s Victorville medical office.

Wendell Mark Street, 67, of Las Vegas, pleaded guilty to two felony counts of illegally prescribing oxycodone to patients without a legitimate medical purpose. United States District Judge George H. Wu has scheduled a December 9 sentencing hearing, at which time Street will face a statutory maximum sentence of 40 years in federal prison.

Street admitted in court that, while he was a licensed anesthesiologist, on August 1, 2013, he sold two prescriptions for $300 each to a confidential informant and Ray Ephraim, an undercover investigator with the California Medical Board. He further admitted that he wrote the prescriptions without a legitimate medical purpose and intentionally acted outside the usual course of professional practice, including by failing to conduct a physical examination, establish diagnostic testing, provide a treatment plan, and create documentation to establish a medication indication for the prescriptions.

The investigation showed that Street prescribed 7,769 prescriptions for narcotics, including 437,000 doses of oxycodone, from November 2012 to November 2013.

Street was charged in a 10-count indictment returned by a federal grand jury in February 2018. During the investigation into Street, investigators executed a search warrant at his Victorville office in 2014. Street surrendered his California medical license in 2016.

This matter was investigated by the Drug Enforcement Administration – Riverside District Office Diversion Group.

This case is being prosecuted by Assistant United States Attorneys Bryant Y. Yang of the International Narcotics, Money Laundering, and Racketeering Section and Jason C. Pang of the General Crimes Section.

The Workers’ Compensation Insurance Rating Bureau of California will propose a 5.7% average reduction in pure premium rates for workers compensation insurers in 2020, the agency announced Wednesday.

If adopted, this would be the ninth consecutive pure premium rate decrease since 2015, with reductions totaling approximately 44% since, the Oakland, California-based agency said in a statement.

Continued downward loss development, acceleration in claim settlements, sharply declining pharmaceutical costs and continued decline in the number of liens being filed are among the reasons for the reduction over 2019 rates, Dave Bellusci, WCIRB’s executive vice president and chief actuary, said in a presentation to the rating agency’s governing committee Wednesday, according to the statement.

Despite these the downward trends, Mr. Bellusci cautioned that loss adjustment expenses remain high and that medical and indemnity average claim severities are beginning to rise at levels closer to their historical norms, according to the statement.

The agency expects to submit its filing to the California Department of Insurance later this month, according to the statement.

In the first half of 2019, NCCI tracked approximately 668 state and federal workers compensation bills. A total of 415 bills were in states where NCCI provides ratemaking services. As of the end of June, 84 bills were enacted.

Legislation impacting first responders continued to be a hot topic this year with 122 related bills considered in 2019. The first responder bills address compensability for certain cancers and other diseases, as well as compensability for post-traumatic stress disorder (PTSD).

In 2019, at least 26 states considered legislation addressing workers compensation coverage for mental-only injuries, such as PTSD, for first responders. To date, eight states (Connecticut, Idaho, Louisiana, Nevada, New Hampshire, New Mexico, Oregon, and Texas) passed legislation addressing benefits for first responders with PTSD in 2019. In addition, Utah passed legislation establishing a working group to study the compensability of mental stress claims from first responders.

Other legislative trends include bills addressing medical cost containment measures, such as fee schedules and treatment guidelines; and court/legal issues such as arbitration and subrogation. These trends are very similar to 2018’s legislative trends.

There are now 11 states, plus the District of Columbia, that have legalized the recreational use of marijuana. In addition, the majority of states (33 plus DC) have legalized the medical use of marijuana, while another 14 states have legalized the use of CBD oil/nonpsychoactive forms of marijuana under certain circumstances. As of June 30, only three states (Idaho, Kansas, and Nebraska) do not have any laws legalizing marijuana in some form.

During the 2019 legislative session, several states considered legislation to authorize the reimbursement of medical marijuana in workers compensation. Those states include Hawaii, Kansas, Maine, Maryland, New Jersey, New York, and Vermont. As of June 30, none of the bills passed.

Rhode Island passed legislation that does not prohibit reimbursement but provides that employers and workers compensation carriers are not required to pay for medical marijuana. The Rhode Island legislation also states that an employer may not refuse to employ or otherwise penalize a person solely for their status as a medical marijuana cardholder, with certain exceptions.

Nevada enacted legislation that prohibits an employer from denying employment because a prospective employee tests positive for marijuana in a preemployment drug screening test. The new law contains exceptions for certain prospective employees, including firefighters and emergency medical technicians.

Utah passed legislation that, in part, allows certain insurers to issue workers compensation coverage to a cannabis production establishment or a medical cannabis pharmacy in the state.

In 2019, nine states considered legislation addressing prescription drugs in workers compensation. At least two states, Illinois and Nebraska, proposed adopting an evidence-based drug formulary. Other states considered legislation to restrict the use of opioids in workers compensation. Legislation proposed in New York would include medical marijuana as a “prescription drug” for workers compensation purposes.

Expect workers’ compensation insurance rates in California to continue to fall, with total written premium expected to drop by $1 billion or more for 2019 despite the positive impacts of continued economic growth, a new report shows.

“We’re experiencing more than a $2 billion impact of lower rates,” said David Bellusci, executive vice president and chief actuary of the Workers’ Compensation Insurance Rating Bureau of California.

Bellusci on hosted a webinar – summarized in a report in the Insurance Journal – to give a rundown on the WCIRB’s just-released 2019 State of the System report.

Even with the falling written premium, the report portrays a healthy worker’s comp market in California that’s “very nonconcentrated,” with several hundred insurers participating, according to Bellusci.

Last year was the sixth consecutive year the industry has posted a combined loss and expense ratio below 100. The combined ratio was 90 in 2018. The ratio hit a high in 1999 of nearly 200 percent. “It’s been probably the most stable period we’ve seen,” Bellusci said. He expects the combined ratio to begin to go up, somewhat due to a modest rise in severity trends, but it will be largely due to declining rates. Bellusci said the ratio may get pushed into the mid- to higher-90s for 2019.

More than an additional $1 billion in payroll each year is being generated by economic growth. However, lower rates are reducing total written premium by more than $2 billion annually, according to Bellusci.

Written premium is expected to a total of $15.7 billion in 2019, down from $17 billion in 2018. Written premium has been on the decline since 2016 when it was $18.1 billion.

Reforms from SB 863 passed in 2012 have saved the workers’ comp system roughly $3 billion annually, with significant savings from lien cost, spinal surgeries and pharmaceutical costs, the report shows.

Despite recent rate decreases, California’s workers’ comp rates remain high compared with other states. Oregon does a state-by-state comparison every other year using Oregon’s industry mix as a control. The report last showed California’s workers’ comp rates at $2.87 per $100 of payroll compared with a nationwide average of $1.70. Bellusci attributed the state’s poor showing in that report to California’s high frequency of permanent disability claims, the long duration of medical payouts and high frictional costs.

Overall claim frequency in California has remained relatively flat, although the frequency of cumulative trauma claims continues to grow – particularly in the Los Angeles Basin and San Diego areas, the report shows. The L.A.-Long Beach area had a 32 percent higher frequency than the state average when controlled for industrial mix and wage levels, the report shows.