The Fifth Annual Survey of Prescription Drug Management in Workers Comp has been completed, and copies of the Public version of the report are available at no charge. (email infoAThealthstrategyassocDOTcom)
A few late respondents contributed significantly to the report, and their data also moved the figures around a bit. Here are a few key statistics.
Drug inflation for 2007 was 4.9% (looking at the increase in total dollars for 2007 over 2006).
Generic utilization was in the high seventies, with generic efficiency in the ninety-percent range.
Essentially all larger payers are now using PBMs, although are many are not using them as effectively as they could be. PBMs’ clinical, reporting, outreach, paper bill processing, and related capabilities are not being utilized to their fullest by all but a very few payers.
The use of home delivery has jumped and is close to 5% across all respondents. This is a major improvement over a couple years ago, when it was in the 2% range for most payers.
And finally, the first fill capture rate is in the low twenties – although half of the respondents did not have the figure readily available.
Copies of past surveys are available here.
Jun
9
Can you explain how Pharma gets a drug, or several drugs, added to managed care formularies? Do they supply supportive data to P&T committees of these companies? Are they required to contract their products at a certain price? How do rebates fit in here? If a local pharmacy fills the perscription, does the PBM or HMO pay them at a contacted price or the commercial price of the drug? How does the process work and how does the money flow from one entity to another? I’m lost!
Joe,
Your study states, “in 2007 national figures indicate drug price increases were almost negligible at 1%…” However, your March 5, 2008 post clearly states “Brand drug prices went up yet again last year, by over 7%”. Even AARP showed a 7.4% increase in cost of brand name drugs in 2007 (http://assets.aarp.org/rgcenter/health/2008_05_watchdog_q407.pdf).
Additionally, AWP, which is still the primary benchmark for workers comp prices, has not decreased for nearly any generic drug.
I’m confused by the discrepancy in your paper and the other resources….
Scanner – good observation, and one I puzzled over for quite some time. It looks like the discrepancy results from several factors.
The AARP study is focused on a subset of brand drugs, while most scripts in WC are for generics.
All the payers surveyed use PBMs, and the PBM deals are for less than FS. This may well reduce the net price paid per script.
AWP is universally and accurately derided as ‘ain’t what’s paid’; while it may be the basis for pricing there are other financial flows that obscure its impact.
While AWP may be the basis for many WC fee schedules, that is not the case in California or NY (where Medicaid is used). These are two big states with potentially significant impact on prices paid.
Lastly, the citation has the underlying data – here is pharma’s dissection of that report, and a wealth of other data. http://www.phrma.org/files/Drug%20Spending%20Brochure%20Final.pdf
And finally I’d note that I need to be more diligent in my research.
Joe