Workers’ Compensation Prescription Drug Study: Costs Stabilizing

There are some signs that the workers’ compensation prescription drug share of total medical costs is leveling off – at least temporarily, according to a National Council on Compensation Insurance study updated this year.

Changes in utilization are the most significant driving force behind changes in total workers’ compensation prescription drug cost, while some states’ workers’ compensation prescription drug costs per claim vary significantly from average, the NCCI study pointed out.

Even though the growth rate in prescription drugs has slowed, overall workers’ compensation medical expenditures continue to rise and prescription drug expenditures are growing at least as rapidly as overall medical costs, the report showed.

Anti-inflammatory drugs and analgesics represent about half of the total amount paid for drugs in workers’ compensation in 2005, and comprise 6 of the top 10 drugs

Additional savings of about 12 percent of total workers’ compensation prescription drug costs could have been realized from using generic equivalents for the 2005 service year

In service year 2005, drugs with no generic equivalent accounted for 31 percent of prescription drug costs. This is down sharply from the 53 percent for service year 2002 that NCCI reported in 2004.

In addition, the withdrawal of some major drugs from the marketplace that were used often in workers’ compensation claims may have significantly impacted workers’ compensation medical costs, NCCI said.

Newly approved generic versions of popular drugs and a slowdown in the number of new drugs introduced also contribute to the overall picture.

NCCI reported a significant slowdown in the growth of the prescription drug share of medical costs in the latest year. Whether this is a temporary slowdown or the beginning of a period of moderating trends in workers’ compensation prescription drug costs remains to be seen, the organization said.

The entire report titled “November 2007 Drug Study” can be viewed at www.ncci.com.

Source: NCCI