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Increased use of generics could eliminate $2 billion in wasted spending for workers' compensation payers, report states

Friday, April 20 2012 | Comments
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Nearly all of the $2.1 billion in wasted pharmacy-related spending for workers' compensation payers last year could have been avoided if generic alternatives had been used instead of brand-name prescription drugs, a new Express Scripts Inc. report indicates.

Express Scripts used its internal data pertaining to waste per injured worker to extrapolate pharmacy-related waste to the entire country based on the estimated number of injured workers eligible to receive workers' compensation benefits. The analysis did not include prescriptions dispensed in hospitals, long-term care facilities or other institutional settings.

Of the $2.1 billion total in wasted spending, $2 billion resulted from the use of branded prescription drugs when less-expensive generic equivalents were available. The remainder included $107 million resulting from the use of out-of-network pharmacies and third-party billing and $40 million resulting from the use of higher-cost delivery channels (i.e., retail pharmacies and physician offices vs. home delivery) for long-term prescription drugs.

The overall drug trend for Express Scripts' workers' compensation clients decreased 1.8 percent in 2011, reflecting a 1.5 percent increase in cost per prescription and a 3.7 percent decrease in utilization.

Among the top six therapy classes, which collectively represented 76.2 percent of total drug spending in 2011, narcotic analgesics had a much higher per-user-per-year (PUPY) cost than did any of the others, at $508.38. This drug class accounted for 38.1 percent of the cost and 34 percent of the utilization for all workers' compensation prescription drug claims among Express Scripts' clients.

The remaining five classes, in descending order by PUPY cost, were anticonvulsants ($120.50), nonsteroidal anti-inflammatory drugs (NSAIDs; $101.90), dermatologic agents ($101.49), antidepressants ($100.25) and skeletal muscle relaxants ($85.03).

Even though narcotic analgesics were the most expensive therapy class, the overall trend for the class decreased 3.6 percent, driven by a 4.2 percent decrease in utilization. Purdue Pharma LP's OxyContin (oxycodone hydrochloride), an extended-release (ER) opioid pain reliever, had the highest PUPY cost ($134.49) among the top 15 drugs ranked according to PUPY spend for 2011 and accounted for 10.1 percent of total workers' compensation drug spend for the year. Even so, the trends for both cost per prescription and utilization for OxyContin were down from the previous year. As a result, the overall trend for the drug was down 6.2 percent relative to 2010.

The overall trend for generic oxycodone also was down from 2010, by 28.6 percent. However, the overall trend for another narcotic analgesic, Endo Pharmaceuticals Inc.'s Opana ER (oxymorphone), increased 52.3 percent in 2011 and had the greatest amount of PUPY spend change from 2010 of any of the top 15 drugs ranked by PUPY spend. A new, tamper-resistant formulation of Opana ER was approved in December.

Skeletal muscle relaxants showed the largest overall decrease in trend, at 10.9 percent, resulting from lower trends in utilization and cost. By contrast, dermatologic therapies had the sharpest increase in overall trend, at 7.4 percent, driven predominantly by higher costs for several commonly prescribed drugs in that class.

Among the dermatologic drugs, Endo's Lidoderm (lidocaine) patch, which averaged $342.37 per prescription in 2011, accounted for almost half of the utilization and more than two thirds of the total cost in the class.

Gabapentin was the most highly used drug among the anticonvulsants, with a 7.2 percent increase in utilization. A reduction in cost per prescription of 4.9 percent offset the increased utilization, resulting in an increase in overall trend of 2 percent. Pfizer Inc.'s Lyrica (pregabalin) had the highest PUPY cost in this class ($209.25), reflecting an 11.7 percent increase from 2010.

Two brand-name antidepressants, Eli Lilly and Co.'s Cymbalta (duloxetine hydrochloride) and Forest Laboratories Inc.'s Lexapro (escitalopram oxalate), claimed more than a third of the market share for that class. The average cost per prescription for the drugs was $217.38 and $134.32, respectively, reflecting corresponding increases of 8.6 percent and 13 percent from 2010.

Cymbalta, Opana ER and Pfizer's Celebrex (celecoxib), an NSAID, collectively accounted for more than 10 percent of the overall PUPY spend in 2011. Express Scripts noted that all three drugs are slated to lose patent exclusivity in the next few years.

"It is critical for employers and payers to get a handle on the costs associated with workers' compensation prescriptions ...," said Tim Pokorney, clinical director of workers' compensation at Express Scripts.

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