Tampa, FL – Healthesystems, a workers’ compensation pharmacy and ancillary benefits management provider, recently published outcome results from their repackaged drug and physician dispensing management program. Repackaged drugs and physician dispensing are practices contributing to the fast growing costs of prescription drug treatments in the workers’ compensation industry.
Healthesystems has remained at the forefront of innovative solutions to address this challenging issue and developed one of the industry’s first repackaged drug and physician dispensing management programs in 2008. The program specifically targets lowering the costs and utilization of this practice. Since then, results have been outstanding with savings exceeding 80% in certain states and over 60% nationally.
Physician dispensed repackaged drugs are concerning because the process bypasses the real time drug review and formulary edits that are usually applied to drugs filled at a retail pharmacy. Elimination of this process raises concern for patient safety. In addition, Healthesystems has identified frequent instances in which excessive price markups are applied to the repackaged drugs, with drugs often billed in excess of 300% compared to the cost of the same drug at a retail pharmacy. Examples in a Healthesystems report illustrate a 400% inflation of physician dispensed ibuprofen and Hydrocodone/APAP (500 mg) – two of the most frequently dispensed repackaged drugs.
A majority of the drug repackaging process is performed by repackaged drug companies/manufacturers which remove drugs from the original container, repackage them in a new form, assign a new National Drug Code (NDC) and frequently inflate the average wholesale price (AWP) – in some cases upwards of 800%. In turn, other entities such as physician dispensing organizations provide doctors with the services necessary to perform an in-office drug dispensing program.
“This is a complex issue which requires a multi-faceted approach to solving it,” stated Daryl Corr, president of Healthesystems. “The solution must be highly integrated into payers’ pharmacy benefit management and medical bill processing programs, and it involves a deep dive into the data.” In order to achieve this level of analysis and cost savings, Healthesystems developed a proprietary drug analytics and forensics tool capable of identifying the origination and cost for each repackaged drug in order to adjudicate it to the lowest allowable amount.
“Other solutions have solely focused on establishing agreements with physician’s groups or drug repackaging companies in an effort to incorporate some sort of contracted rate. But usually those rates are still based off of an already inflated AWP,” Corr stated. “The question is whether you want to continue to incentivize this type of practice or maintain the same drug therapy reviews and cost controls that are in place with prescriptions filled at a retail pharmacy.” In the right circumstances, the dispensing practice may be beneficial for the patient and solutions could combine both approaches; but at a minimum it is critical to ensure the appropriate fee schedule rules are being applied.
To read the full report, download the company’s white paper here: Healthesystems Repackaging & Physician Dispensed Drugs in Workers’ Compensation: Proven Strategies.