The Workers’ Compensation Insurance Rating Bureau (WCRIB) in California released a report titled “Patterns of Drug Dispensing in California Workers’ Compensation” that analyzed pharmaceutical payments in the states between 2012 and 2015. They found that overall drug spending per claim decreased, which may be partly because physician dispensing decreased significantly as well.

Researchers analyzed $500 million in work comp pharmaceutical payments between July 2012 and December 2015. The data represented over 90 percent of the state’s work comp market. Overall drug spending per claim decreased 28 percent, and payments made directly to physicians dispensing drugs declined by 20 percent. The decline was across all drug categories, particularly for opioids and base substances in compound medications, for which payments declined by 50 percent. The decline in payment was attributed to a decline in overall prescriptions given out, and not necessarily because of a decrease in prescription prices. When physicians were dispensing certain opiate analgesics and stomach discomfort medications, they were receiving higher payments than when those drugs were distributed at pharmacies.

Other notable findings were that the Los Angeles area accounted for 86 percent of compound drug payments, and 60 percent of non-compound drug payments.

California is a state with long claims durations, and with long claims come more pharmaceutical costs. For claims going on ten years or more, pharmeuticals represented 37 percent of their total medical costs. Between 2008 and 2011 the National Council on Compensation Insurance (NCCI) found that physician dispensing had doubled, and drug payments to physicians increased by 150 percent during that time while drug payments to pharmacies increased by 23 percent. This latest report from WCRIB shows some positive improvements in reducing the costs of physician dispensing.

Here is the full report.