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CWCI Study Examines California Workers Comp Pharmaceutical Trends

Oakland, CA – A California Workers’ Compensation Institute (CWCI) study finds that nonsteroidal anti-inflammatories (NSAIDs) now account for more than a third of all drugs dispensed to injured workers in California, triple the proportion noted for opioids.  The study also reveals that although most NSAIDs that are used are inexpensive, and utilization has been flat since the state’s evidence-based prescription drug formulary took effect in 2018, NSAIDs’ share of the total drug spend has soared from 14.2% to 23.5%, largely driven by increased payments for two low-volume, high-priced drugs that are exempt from prospective utilization review (UR) and that lack price controls. 

The CWCI analysis of changes in the distribution of California workers’ compensation prescriptions and prescription payments over the past decade uses data on 5.85 million prescriptions dispensed to injured workers, resulting in payments totaling $623 million.  The data show that opioids accounted for 11.6% of the prescriptions filled in the first half of 2020, down from 31.0% in 2011 – a relative decline of 62.6% during the study period. NSAIDs, often used as non-opioid alternatives to treat pain, surpassed opioids as the number one drug group in 2015, and in both 2019 and the first half of 2020 they accounted for more than a third of all prescriptions dispensed to injured workers, twice the proportion noted a decade earlier.  Ranking behind opioids in terms of utilization are anticonvulsants, dermatologicals, and antidepressants, which round out the top 5 drug groups.  Musculoskeletal drugs (muscle relaxants), which were the third most heavily used workers’ comp drug group until the formulary took effect, saw their share of the prescriptions fall sharply beginning in 2018 as under the formulary they are subject to prospective UR, with the exception of special fill or perioperative uses, where the quantity of the drug that can be dispensed is limited.

Total payments for a drug group reflect several factors besides the volume of prescriptions, including allowable fees under the pharmacy fee schedule, average quantities and dosages, mode of delivery, and the availability of generics.  While opioids still rank second in workers’ comp prescription volume, the study found their share of the prescription payments fell from 30.7% in 2011 to 7.0% in the first half of 2020, so they now rank fourth in terms of total drug spend, behind NSAIDs (23.5%), dermatological drugs (14.1%), and anticonvulsants (13.1%).  NSAIDs have seen the biggest increase in their share of the total drug spend since the formulary took effect, as their share rose from 14.2% to 23.5% in less than two years, a relative increase of 65.5%, even though two inexpensive drugs, ibuprofen and naproxen, account for two-thirds of all NSAID prescriptions.  The study pinpointed much of the recent growth in NSAID payments to two low-volume, extremely high-priced NSAIDs -- fenoprofen calcium and ketoprofen -- both of which are used to treat arthritis and pain.  Both drugs are on the formulary’s “Exempt” drug list, so they are not subject to prospective UR, and neither is in the national Medicaid database, so they have no Federal Upper Limit (FUL) -- a maximum fee allowed under Medicaid, which also provides a price control in the Medi-Cal and the California workers’ comp pharmacy fee schedules.  Instead, these drugs, like others not listed in the Medi-Cal fee schedule, are paid at 83% of their average wholesale price set by the drug manufacturers.  

The combined effect of the Exempt status of these drugs and the lack of an FUL is evident in the payment data.  For example, the study found that the average amount paid for a fenoprofen calcium prescription rose from $201 in 2016 to $1,479 in the first half of 2020 (+636%), which drove its share of the NSAID payments from 0.1% in 2016 to 25.5% in the first half of 2020, when it surpassed naproxen to become the number one NSAID in terms of total drug spend, even though it represented only 1.0% of NSAID prescriptions.  Furthermore, the authors found that the average amounts paid for generic fenoprofen calcium were much higher than for the brand versions of the drug, underscoring that generic availability alone does not necessarily reduce the total amount paid for a drug.  At the same time that the average amounts paid for fenoprofen calcium were increasing, the average reimbursement for a ketoprofen prescription was also on the rise, climbing from $99 in 2016 to $1,097 in the first half of 2020 – a 10-fold increase.  As a result, ketoprofen became the third most costly NSAID in California workers’ compensation, consuming 14.7% of all NSAID dollars in the first half of 2020, even though it only represented 0.8% of NSAID prescriptions.  These examples show that while a high proportion of low-priced drugs like naproxen and ibuprofen in a drug group can have a moderating effect on that group’s share of the total drug spend, the presence of low-volume but high-priced drugs that are exempt from prospective UR and that lack price controls have just the opposite effect and can drive up overall reimbursements for the entire group.

CWCI has released its study in a Research Update report, “California Workers’ Compensation Prescription Drug Trends.”  In addition to showing the changing distributions of prescriptions and prescription payments among the top 20 therapeutic drug groups over the past decade, the report quantifies changes in opioid utilization based on four different metrics at 24 months post injury, as well as regional variations in opioid prescribing patterns, and measures changes in the mix of prescriptions and payments broken out by formulary category.  The report is free to CWCI members and research subscribers, while others can order a copy for $22 here. 

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