Helios has just released their drug trend report covering spend, trends, and influencers for 2013 and 2014.  As the largest – and oldest – WC PBM, Helios has perhaps the broadest and “longest” perspective, able to draw on several decades of data to identify, parse, and analyze trends.

The PBM also has quite the stable of researchers, PharmDs, and technical writers who have combined to produce a report that is both readable and relevant.

A few key takeaways:

• Drug costs on a per-claim basis are going up, driven by increases in AWP pricing.  The impact of manufacturers’ price increases is dramatic;
  • Generic AWP was up 10 percent in 2014
  • Brand increased 12.5 percent
• Opioid utilization is trending downwards by almost every measure; fewer claimants are prescribed opioids; the average Morphine Equivalent Dosage has declined; and the number of MEDs per claimant has dropped as well.
• Meanwhile, compounds now account for 5.6 percent of spend, an increase of almost 37 percent over 2013.

There is a wealth of additional information in the hundred-odd pages from updates on legislative and regulatory initiatives to an explanation of future cost drivers and external factors influencing utilization.

I’d also note that the Report in and of itself is revealing; the professionalism, graphics, attention to detail and broad coverage of all things work comp pharmacy show just how much work comp PBMs have matured.  While the first drug trend reports from a decade ago were helpful, there’s just no comparison.

Kudos to Helios.

Three weeks ago a group of stakeholders in Maryland decided physician dispensing wasn’t that bad [scroll down in link].

These stakeholders agreed to not do anything legislatively to address doc dispensing for another two years because their own analysis had indicated physician dispensing in MD was not changing.  Now, a lobbyist for physician dispensing “technology” firm Automated Healthcare Solutions has penned an opinion piece that can only be described as a hit job on WCRI, a highly respected research organization.

There are two related problems here.

• It’s obvious the doc dispensers’ strategy is to try to discredit WCRI – no other reason to publish an editorial in a paper in a state that you’ve already won.
• The stakeholders that signed the letter agreeing to forgo any legislation ignored research from Johns Hopkins University (located in Maryland) proving physician dispensing is associated with much worse patient outcomes.

I won’t dignify the lobbyist’s moronic prattling with a point-by-point rebuttal; WCRI already has in the measured, professional, and very precise way that is the hallmark of academic research. Suffice it to say that the lobbyist’s own writing shows he is even less knowledgeable about statistics, research standards, and data analytics than our Newfies are.

This guy calling out WCRI on statistical analysis is akin to me telling Blake Shelton he doesn’t know the music business.

Next, in a letter citing the Maryland Workers’ Compensation Commission, the stakeholders asserted “contrary to previous trends reported by the Workers’ Compensation Research Institute, Maryland claimants received a smaller proportion of prescription drugs dispensed directly from their physicians, as compared with prescriptions dispensed from pharmacies.”  After much review, my conclusion is this – there are differences in the methodologies used by the MWCC and WCRI – but those differences do NOT mean WCRI’s work is wrong.

First, the data collection process the stakeholders used to come up with their conclusion is not as rigorous as it could – and likely should – have been. For example, they asked multiple sources for data on physician dispensing, but failed to provide tight criteria or definitions for these sources to categorize the data. As a result, the findings are questionable because the sources may well have:

• used different criteria to identify “physician dispensers”
• used different definitions of “repackaged” drugs
• differing ability to identify what entity dispensed a drug
• differing ability to differentiate between physician-owned “pharmacies” and retail pharmacies
• different definitions of “generic” and “branded” drugs

Second, the MWCC analysis used an entirely different methodology than WCRI, a methodology that, among other factors, included different time periods and a different set of claims.  It is NOT surprising that different data sets, different methodologies, different time lines yield different results.

On its own initiative, WCRI used the stakeholders’ methodology in an attempt to understand the discrepancy, with the following result:

When we replicate the data and methods used by the Commission on the data used in our Maryland draft study, we get 16.7 percent where the Commission reported that 15.7 percent of prescriptions were dispensed at physicians’ offices. Hence, when we use similar methods on different data sets, we get similar results.

Ignored in the lobbyist’s “editorial”, and by the stakeholders as well, is this:

In the last published WCRI study on this topic, Maryland was compared to 20 other larger than average states. We found that physician dispensing in Maryland was more frequent than in 17 of these 20 states—twice as common as in the median state, [emphasis added] and four times more frequent than in the neighboring state of Virginia. 

Rather than get into a “mine’s better than your’s” conversation, here’s what we know.

There’s no question Maryland has a very large physician dispensing problem – one that all the research indicates is likely driving worse outcomes for patients and higher costs for employers and taxpayers.  The really troubling thing here is the stakeholders know, or should have known outcomes may be significantly and adversely affected by doc-dispensed drugs, yet went along with the deal.

In conversations with stakeholders, I asked why they didn’t consider this, and got no answer.  When I pressed and asked if they were going to work with JHU’s researchers to look at outcomes, I was told they “may have to think about that.”

Think about…what?

I don’t think these stakeholders are bad people or ill-intentioned; they do have a lot on their collective plate.

I do think they have – for their own reasons, which may make sense to them – given up the fight against physician dispensing.

In so doing, they are missing out on an opportunity to help Maryland employers, taxpayers, and injured workers.

They are also empowering the dispensers in other states.

What does this mean for you?

All the research indicates physician dispensing increases disability duration, indemnity expense and medical costs.  THAT is what Maryland should study.

Note – in the interest of full disclosure, I am (as most of you already know) president of CompPharma LLC, a consortium of workers’ compensation PBMs. It’s also important for readers to know that it matters not one iota to me financially if physician dispensing increases or decreases.

It does matter to me personally as it is flat out wrong. It is bad policy that is damaging the many to enrich a very few.

Is up and available for your downloading pleasure here.

Among the highlights are the following…

• drug spend for the 25 respondents declined year-over-year, marking the fourth year of flat or decreasing spend
• despite that good news, payers remain more concerned about drug costs than other medical cost areas
• opioids and related issues again dominated the conversation (the survey was telephonic and took about 20 minutes) with respondents noting issues related to addiction, drug testing, fraud/waste/abuse/diversion, cost, delayed recovery and increased indemnity expense as concerns
• compound drugs were identified as the biggest emerging issue
• respondents also noted that regulations and legislation have not kept pace with developments in work comp pharma such as the growth of physician dispensing

The report contains a host of statistics, data, and insights from the respondents, along with perspective gained from doing the survey for over a decade.

Happy reading!

Controlling drug usage in workers’ comp is – far too often – the proverbial pushing on the rope.

Sure, PBMs and payers have done a remarkable job constraining costs and reducing the initial inappropriate use of opioids. Virtually all payers use PBMs and benefit greatly from PBMs’ clinical management and pricing that is almost always significantly lower than the state fee schedule or retail price.

However…the explosive growth of compounding, the fact that a quarter of drug costs are for opioids and a third for physician-dispensed drugs, the inability of clinical staff to get many prescribing physicians to discuss potential alternative treatments, and the frustration experienced by adjusters and employers unable to resolve claims due to long-term, highly-dangerous, and counterproductive use of drugs all argue for more regulatory help.

There are two valuable and too-little used tools in the box; evidence-based guidelines backed up by strong UR and formularies. While many jurisdictions dabble in guidelines, the litigious nature of comp coupled with the imprecise and nebulous wording of regulations often results in more problems, less clarity, and more delays.

In contrast, formularies established in regulation, whether the very tight version used in Washington State or the loose one in Texas, are clear, precise, and incontrovertible.  Drugs are either allowed or not.

CWCI’s just-released study analyzes the potential impact on work comp of those two formularies.  By comparing the drugs dispensed in the Golden State to what would have been allowed by Texas or Washington, Swedlow et al have determined that employers and taxpayers are overpaying somewhere between $102 million and $541 million annually – with no negative effects.

Before some naysayer starts screaming about the unfairness of payers influencing doctors’ treatment decisions, that naysayer should understand that formularies are in place in every group health, Medicare, Medicaid, and individual health plan.  Moreover, said naysayer should READ the CWCI study, and note that a “formulary” may be “set” to require dispensing of the drug that is the lowest-cost but otherwise identical drug instead of a higher-priced-but-otherwise-identical medication – or use any one of several other “levels” to establish a somewhat more restrictive formulary.

Formularies provide better care and tighter control without compromising.  And, a major benefit would be the huge reduction in the contentious and generally pointless UR dealing with drugs…a third of California’s IMRs are for drugs.

An excellent review is in this am’s WorkCompCentral – Greg Jones has penned a thorough, detailed, and well-researched piece that should be required reading.

The cost of physician dispensing is far above the outrageous premiums the dispensers charge.  The real cost includes:

• longer disability duration
• higher medical expense – over and above the excess cost of drugs
• higher indemnity expense
• more and longer use of opioids

Lost in the conversation, ignored in legislation, and pooh-poohed by dispensers and their enablers, the research – real research by real scientists, not anecdotal BS by dispensers – proves dispensing is having cost implications far and above the cost of the drugs.

In addition to the ground-breaking work done by Alex Swedlow et al at CWCI, the folks at Accident Fund (kudos to Jeffrey Austin White) teamed up with Johns Hopkins to analyze the impact of dispensing on their claims.

The results – which will be discussed next week in an IAIABC-sponsored webinar – are striking.

Slots for the webinar are still available – it will be held next Wednesday, September 10 from 1-2 Central Time.

Kudos to IAIABC for their leadership on this.

 

 

This is the eleventh (!) year I’ve been involved in surveying workers’ comp payers to get their take on pharmacy management.  Now that Yvonne Guibert (thank you Yvonne) has finished collecting the data, I’m working on the report.  It’s going to take a week or so, but I’ve pulled a couple highlights to whet your appetite.

• Overall, drug spend declined for most of the 25 respondents, with some seeing percentage decreases in the double-digits.
• In addition, total spending (across all respondents) declined as well – by about the same margin.
• Top problem? close between opioids and physician dispensing, same as last year.
• Biggest emerging problem? Compounds, without a doubt.
• 21 of 25 respondents said prescription drug costs were more or much more important than other medical cost issues at their organization.
• 88% of the 25 respondents (large, mid-sized, and small WC TPAs, state funds, and carriers) have a urine drug monitoring program in place today or will by the end of the year.

Much more to come – the data geek in me is getting all fired up about what we’re going to learn.

Thanks to the 25 organizations who spent time collecting their data, then sharing it with Yvonne.  This is not an easy task, but one that really helps all of us understand what is going on with pharmacy programs, utilization, solutions and cost drivers and how payers are addressing the issue.

Stay tuned…