I love reading CWCI’s Bulletins – even if they make me want to tear my hair out and scream.
The latest from the brilliant analysts in Oakland is an update on 3 unnecessary-and-wildly expensive-drugs-with-no-purpose-other-than-Hoovering-millions-out-of-employers-and-taxpayers’-pockets… these three drugs account for 2% of anti-inflammatory scripts and almost half of anti-inflammatory drug costs.
these meds aren’t wonder drugs that grow hair while curing low back pain and strengthening joints and rejuvenating shoulder cartilage…they are similar to aspirin, ibuprofen, and naproxen.
OK, here’s how the scheme works.
Neither drug [Fenoprofen calcium and Ketoprofen] is on the California workers comp drug fee schedule, so employers and taxpayers have to pay 83% of the “average wholesale price”. AWP is a number made up by the drugs’ manufacturers, and can be anything they want it to be.
So, some smart schemers figured out that they could make a shipload of money by a) jacking up the price of a drug that costs pennies to make, and b) convincing a few docs to prescribe it to workers’ comp patients.
- Profiteers increased fenoprofen calcium’s reimbursement from $192 in 2016 to $1,479 five years later.
- in four years, ketoprofen went from $107 – $1,073 – a 1000% increase in four years.
- another drug – etanercept – went from $1,930 in 2012 to $7,716 in 2021.
So…what are you going to do about this? Wait, this is the first you’ve heard about it? Well, THIS IS NOT NEW NEWS.
CWCI first reported this two years ago.
WCRI did the same months ago.
What does this mean for you?
You have a fiduciary duty to stop this.
If you have ignored this to date, you should be embarrassed, ashamed, humiliated and
- Get a report from your payer/PBM about your spend on these three drugs over each of the last three years.
- Find out what’s been done – or attempted – to address this.
- If you – the payer – haven’t done your part, do not blame anyone else.
- Regardless…
- Identify the docs prescribing this stuff.
- Kick them out of your MPN.
- Require prior auth for these meds.
- Work with your PBM – it probably has an on-the-shelf plan – but do NOT just dump it on the PBM and tell it to fix the problem.
- Put a process in place to make sure you are on top of this stuff long before it hits some blog.
Oh, and the CWCI bulletin identifies a bunch of other drugs that are – at best – questionable.
Joe,
From an insurance perspective, this scam have a significant impact. A client of mine had a drug increase from $2.80 per pill to over $28. A claimant in his late 40’s was prescribed the drug. A $25 daily increase on a pill equals $9,125 per year time 30 year life expectancy equals $273,750 potential reserve increase. That is material for smaller risk bearers. In this case, rates established for the client certainly did not anticipate prescription costs of this magnitude so the cost is coming from surplus. The secondary question is how to reserve for the increase given the patent life and the propensity for drug manufacturers to change dosages to keep the proprietary nature of the drug.
I see there is a tough math problem below.
Thanks for the note Jeff. Increasing the price also increases plaintiff attorneys’ payouts upon settlement.
No question many plaintiff attorneys are focused on doing the right thing, but when state regs and laws peg attorney fees to costs there are some pretty inappropriate incentives.
I guess better the needed funds – in this case – came from surplus. In most cases the employer/taxpayer gets stuck with the bill.
Be well – Joe
Joe, congratulations (again) for lifting the lid on this horrific waste of money. I may be naïve, but how does a drug get approved by UR that’s not on the formulary and later paid for? For all the times requests for more conventional treatment are modified or denied because they are not listed under the ACOME Guidelines or the formulary and the tedious IMR process is invoked to gain approval – as often as that process takes place – how are these drug requests getting through? You’re right, how could this possibly happen without someone being asleep at the switch? This is not the opioid crisis by any means (maybe), but am I mistaken to say the delivery mechanism that aids and abets this problem is basically the same as that which allowed the opioid problem to get as far as it did? Probably lots of blame to go around, but how could these scripts get through UR in the first place? What documentation does the PBM receive that forces them to deliver such expensive medications?
Thanks for the note Steve and appreciate your kind words
The delivery mechanism that “allows” this to get through is fundamentally different from that in place during the early and subsequent years of the opioid crisis.
Fenoprofen calcium and ketoprofen are not subject to UR. Going out o a limb here – albeit a thick and robust one – this is precisely why prescribers and dispensers have been flooding the work comp payment system with scripts for those two drugs.
Etaneracept is subject to UR. The data seems to indicate it is much less of a problem than the two others as it only accounts for 4.3% of payments for anti-inflammatories.
Fenoprofen calcium and ketoprofen spend was ten times that.
Hope that clarifies.
be well Joe