Prescription Medication Loophole Expensive for Pennsylvania Workers' Compensation Stakeholders

09.24.14

Prescription medication is standardized.  Percocet is Percocet, whether you get it from CVS, Walgreens or a doctor.  No one with common sense would pay $3.55 for one Percocet when you can receive the same exact Percocet for 64 cents from another source. But as a result of a disturbingly expensive and problematic loophole in the law, insurers are forced to pay that increased price to a tune of $33 million per year.

The Workers Compensation Research Institute (WCRI) released a report concerning physician dispensing of medications in Pennsylvania on September 22.  Pennsylvania is part of a dwindling group of states whose workers’ compensation system allows a doctor to dispense prescriptions directly to a patient.  Not only do many other states limit this practice, but in Pennsylvania, it’s only allowed in the workers’ compensation context. If your injury is unrelated to work, you go to a doctor, the doctor writes a prescription and the pharmacy fills the prescription. If the prescription is for Percocet, the Percocet at a pharmacy will cost about 64 cents per pill. If you sustain the same exact injury, but at work, you’ll go to a doctor, and the doctor has the option to cut the pharmacy out, and dispense the medication directly.  Same injury, same medication, but because the doctor is the one dispensing the medication, the Percocet costs nearly $3 more per pill. There is simply no rationale for the higher price and no justifiable reason that the medication should not be dispensed by a pharmacy in a workers’ compensation setting.

Doctor’s dispensing medications at a higher price than a pharmacy is by no means rare.  Half of all prescription drug costs associated with the workers’ compensation system are paid to doctors–not pharmacies.  The amount is staggering, representing 1 percent of the cost of the entire system.  The practice has also been increasing significantly over the last few years.  The current total of $33 million represents an 11 percent increase in just the last year.

The WCRI report breaks down the price differential for the top 10 medications prescribed in workers’ compensation cases and the numbers are startling.  For example, Soma, a common muscle relaxer, when dispensed by a physician, costs the carrier $4.84 per pill.  When the identical prescription is filled by a pharmacy, it costs only 51 cents.

Furthermore, it is not only the carriers who bear the costs of physician-dispensed medication.  According to the WCRI report, patients in the workers’ compensation system receiving prescription narcotics dispensed directly by doctors have a higher risk of abusing and becoming dependent on those narcotics.

The unnecessary price, and possible detrimental health effects of physician dispensed medication is starting to be noticed by the Pennsylvania Legislature.  State Rep. Marguerite Quinn sponsored House Bill 1846, which limits the costs associated with physician dispensed medications. The bill is aimed at closing the loophole that has created “a myriad of undesirable effects including inflated workers’ compensation premiums for taxpaying businesses; the proven expansion of price differentials between physician-dispensed medications and pharmacy-dispensed medications; and in extremely sad instances, narcotics abuse and addiction,” according to Representative Quinn.

House Bill 1846 is currently pending before the State Senate.  If approved, the amendments to the Workers’ Compensation Act will have an immediate impact on the amount paid for medications.

For more information, please contact Peter M. Harrison at pharrison@wglaw.com or 267.765.4133 or Joseph Gentilcore at jgentilcore@wglaw.com or 215-972-7932.

Media Contacts

Sara L. De Long
267.295.3377
sdelong@wglaw.com

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