Trends in Workers’ Compensation Drug Payments

A report from the Workers Compensation Research Institute (WCRI) finds that in most states, dermatological agents and nonsteroidal anti-inflammatory drugs (NSAIDs) have become more important than other drug groups as a share of total prescription payments. In the typical state, dermatological agents and NSAIDs each accounted for about 20 percent of total prescription payments in the first quarter of 2020 (2020Q1).

“This study finds that prescription payments are decreasing in a majority of state workers’ compensation systems, but prescription payments continue to vary widely,” said John Ruser, president and CEO of WCRI. “This study breaks prescription drugs into groups (dermatological agents, NSAIDs, opioids, compounds, etc.) so you can see where workers’ compensation prescribing dollars are being spent and whether spending for those groups of drugs is going up or down.”

According to the FlashReport, Interstate Variation and Trends in Workers’ Compensation Drug Payments: 2017Q1 to 2020Q1, written by Dr. Vennela Thumula, Te-Chun Liu, and Dongchun Wang, prescription payments per medical claim decreased by 15 percent or more in 20 of the 28 states over the study period. As of 2020Q1, per claim payments in the highest state were more than eight times higher than in the lower state. While focused primarily on the time before COVID-19, the study also provides data at a high level on the impact of COVID-19 on prescription drug payments and opioids during the first quarter of the pandemic.

The following is an abbreviated list of the study’s other findings:

• Dermatological agents: Per-claim payments varied widely, from $7 per claim in Iowa to $181 per claim in Illinois and $190 per claim in Louisiana in 2020Q1. Physician dispensing accounted for the majority of payments for the drug group in 12 of the 28 study states. Between 2017Q1 and 2020Q1, payment shares increased by more than 10 percentage points in 5 states (Connecticut, Kansas, Louisiana, South Carolina, and Virginia) and physician dispensing contributed to the rapid growth.
• NSAIDS: Payment shares for this drug group changed little in many states, but per-claim payments varied widely in 2020Q1, from $21-$22 per claim in Delaware and Massachusetts to $126 per claim in Louisiana.
• Anticonvulsants: Both payment share and per-claim payment for this group decreased in many states over the study period. The decrease happened mostly between 2019Q2 and 2019Q3, when generic formulations of Lyrica® became available.
• Opioids: The substantial decline for opioids during the study period continues the declines seen in previous periods. The per-claim payments for opioids decreased by 56 percent in the typical state, and the rate of reduction ranged from 40 percent in Louisiana to 81 percent in California.

The 28 states in the study are Arkansas, California, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin. In each quarter, prescriptions that were dispensed for all medical claims with injuries occurring within three years of the prescription fill date and paid under workers’ compensation were included.

To learn more about this study or to download a copy, visit https://www.wcrinet.org/reports/wcri-flashreport-interstate-variation-and-trends-in-workers-compensation-drug-payments-2017q1-to-2020q1.