Waste Adds $2.1 Billion to Workers' Compensation Pharmacy Costs, Express Scripts Reports

Unnecessary Use of Higher-Priced Medications Leading Cause of Waste; Lower-Cost, Clinically Equivalent Alternatives Would Save Billions for Workers' Compensation Payers

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Express Scripts

Apr 17, 2012, 08:00 ET

ST. LOUIS, April 17, 2012 /PRNewswire/ -- Unnecessary use of higher-priced medications resulted in nearly all of the $2.1 billion in wasted pharmacy-related spending last year for workers' compensation payers, according to research published in the 2011 Express Scripts Workers' Compensation Drug Trend Report. About 125 million workers are eligible for workers' compensation benefits in the U.S., and an estimated 4.2 million suffer from a work-related injury or illness each year.

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For the first time, the report identifies the different areas of waste and quantifies potential savings for payers that implement and optimize workers' compensation pharmacy benefit management programs.

The 2011 Express Scripts Workers' Compensation Drug Trend Report provides a comprehensive look at overall spending on prescription drugs for the top therapy classes and key issues facing the workers' compensation industry. The company's research found:

$2 billion of waste resulting from use of higher-cost medications when therapeutically equivalent, lower-cost alternatives are available.
$107 million of waste through use of out-of-network pharmacies and third-party billing.
$40 million of waste from use of higher-cost delivery channels such as retail pharmacies instead of home delivery for long-term medications used by injured workers.

Express Scripts workers' compensation clients saw drug trend fall 1.8 percent – the second consecutive annual decline – despite cost per prescription rising 1.5 percent in 2011. The company's effective utilization management programs helped reduce utilization 3.7 percent. Drug trend is overall pharmacy-related spending and includes cost per prescription and utilization.

"By applying clinical evidence and behavioral science insights to workers' compensation, we can save billions of dollars and improve health outcomes," said Tim Pokorney, pharmacist, and clinical director of workers' compensation at Express Scripts. "It is critical for employers and payers to get a handle on the costs associated with workers' compensation prescriptions, and we have the solutions to help them to do so, leading to better outcomes for injured workers with minimal disruption."

At $508, narcotic analgesics had the highest annual cost per user in 2011, accounting for about 38 percent of total drug spending and more than one-third – 34 percent – of total utilization. Cost per user for compounded prescriptions – those that are not available commercially in the strength, dosage, form or exact combination needed by the patient – increased 13.7 percent.

Other key findings of the Workers' Compensation Drug Trend Report include:

The top six therapy classes – which include anticonvulsants, anti-inflammatory and dermatological medication in addition to narcotic analgesics – represented 76.2 percent of total drug spending in 2011.
Oxycontin® had the highest per-user cost and accounted for 10 percent of the total drug spending in 2011.
Dermatological medication costs rose 7.4 percent, the highest increase of any therapy class.

Express Scripts provides pharmacy benefit management services to workers' compensation payers in all 50 states. The company leverages its advanced analytics capabilities and insights generated by its team of experienced researchers to develop innovative solutions that drive out waste.

"Our workers' compensation programs are guided by in-depth research into behavioral science and thoroughly tested through extensive pilot programs and studies," Pokorney said. "Through our research, we have developed and introduced novel programs to increase the use of generic medications and home delivery — both major drivers of cost savings."

Behaviors such as habit or lack of awareness can lead some physicians to continue to choose branded medications over more clinically equivalent, lower-cost generic alternatives. Injured workers may also request the more expensive medication. These behaviors drive up the cost of the workers' compensation pharmacy benefit. Express Scripts offers Step Therapy programs combined with physician outreach to optimize drug mix for maximum savings.

Express Scripts also provides effective network management strategies such as the ExpressComp® National Network, First Fill and Paper Bill Conversion program to reduce the cost of using out-of-network pharmacies and third-party billers. In addition, home delivery from the Express Scripts Pharmacy reduces costs while improving dispensing accuracy.

To download the 2011 Express Scripts Workers' Compensation Drug Trend Report, visit: http://www.express-scripts.com/research/research/dtr/.

About Express Scripts

Express Scripts Holding Company (NASDAQ: ESRX), one of the largest pharmacy benefit management companies in North America, is leading the way toward creating better health and value for patients through Consumerology®, the advanced application of the behavioral sciences to healthcare. This approach is helping millions of patients realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior. Headquartered in St. Louis, Express Scripts provides integrated PBM services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug-data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services. More information can be found at http://www.express-scripts.com/pressroom/ and http://www.consumerology.com/.