Lynch Ryan's weblog about workers' compensation, risk management, business insurance, workplace health & safety, occupational medicine, injured workers, insurance webtools & technology and related topics

October 23, 2003

Ouch! Pain drugs or drug pains?

The Bloviator points us to the fifth article in an excellent series on prescription drugs that ran in the Washington Post. This article deals with the millions of Americans who are turning to Mexico to curb rising drug costs - a practice not limited to consumers. In their quest to secure prices that are 20 to 70% cheaper, some municipalities are virtually turning into international drug cartels. Today, Boston announced its intent to buy its drugs in Canada.

The prescription drug headaches are even more severe in the workers comp sector than the group health side. NCCI recently compared WC to group health and found that under WC, buyers pay 74% more...some of the report's key findings:

*Prescription drug share of medical costs by accident year in Workers Compensation (WC) grew from 6.5% in 1997 to 9.6% in 2001.

*Utilization has a greater impact on WC drug costs than price.

*WC pays roughly 125% of the Average Wholesale Price (AWP) of prescription drugs; Group Health (GH) pays only 72%. Therefore, WC paid 74% more than GH for the same drugs.

*Generic equivalents are prescribed when available 79% of the time for WC claims. A total of 56% of WC costs are associated with drugs that have no generic equivalent. Therefore, savings opportunities from using generic equivalents are only available for approximately 8% of total WC drug costs.

*Painkillers represent 55% of the cost of prescriptions in WC.

Posted by Julie Ferguson at 11:39 PM Link to, Comment (0), or E-mail this post
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