How to fix the spiraling cost and utilization of compound drugs
By sedgwickconnection On · Add Commen
Recent reports about the cost and utilization of compounded drugs in workers’ compensation programs have many people in the industry concerned and talking – and for good reasons.Various studies have shown that the average cost per compounded medication prescription increased 29.8% from the previous year. Perhaps even more astounding is that the California Workers’ Compensation Institute (CWCI) reports that the use of compounded medications increased by 71.9% from 2012 to 2013, with per user, per year costs rising 126% over 2012.
At Sedgwick, we started reporting on excessive utilization of compounds a few years ago. While compounds still represent less than 5% of the total pharmacy costs, they can pose risks to employee health safety. With this in mind, last October – well ahead of the most recent published studies on compounding utilization – we introduced a comprehensive program specifically aimed at helping our clients better control this spiraling trend.
We developed our program by first asking why compounding was increasing so rapidly. Was it because there was a real need? Were compounds helping patients? Were they better therapeutic options? We looked to industry guidelines and evidence-based medicine as a foundation in developing our program.
Why payers are concernedCompounded medications were initially created to address supply needs, or to provide therapies for rare conditions or, in extreme instances, for use when traditional medications were not working. However, the most common medication categories for compounded drugs today are anti- inflammatories, muscle relaxants, anesthetics and pain blockers. These medications are often provided as creams. Coincidentally, these are the same therapeutic categories we see most frequently in workers’ compensation, often resulting in duplications of therapy for both oral and topical use.
What’s troubling about current utilization patterns is that the vast majority of injuries currently using expensive compounds could be better treated with lower-cost generics or even over-the-counter medications. In addition, many payers are concerned about safety, as these drugs are not subject to FDA approval and efficacy; there is very little peer-reviewed or clinical evidence to support their use. Many of the compounded drugs dispensed as topical creams and used for pain cannot be absorbed through the skin, meaning that payers are wasting money and patients are not getting the relief they need.
continue to read here
At Sedgwick, we started reporting on excessive utilization of compounds a few years ago. While compounds still represent less than 5% of the total pharmacy costs, they can pose risks to employee health safety. With this in mind, last October – well ahead of the most recent published studies on compounding utilization – we introduced a comprehensive program specifically aimed at helping our clients better control this spiraling trend.
We developed our program by first asking why compounding was increasing so rapidly. Was it because there was a real need? Were compounds helping patients? Were they better therapeutic options? We looked to industry guidelines and evidence-based medicine as a foundation in developing our program.
Why payers are concernedCompounded medications were initially created to address supply needs, or to provide therapies for rare conditions or, in extreme instances, for use when traditional medications were not working. However, the most common medication categories for compounded drugs today are anti- inflammatories, muscle relaxants, anesthetics and pain blockers. These medications are often provided as creams. Coincidentally, these are the same therapeutic categories we see most frequently in workers’ compensation, often resulting in duplications of therapy for both oral and topical use.
What’s troubling about current utilization patterns is that the vast majority of injuries currently using expensive compounds could be better treated with lower-cost generics or even over-the-counter medications. In addition, many payers are concerned about safety, as these drugs are not subject to FDA approval and efficacy; there is very little peer-reviewed or clinical evidence to support their use. Many of the compounded drugs dispensed as topical creams and used for pain cannot be absorbed through the skin, meaning that payers are wasting money and patients are not getting the relief they need.
continue to read here
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