Workers Compensation Prescription Drug Study - 2004 Update

Posted Date: October 2004

NCCI’s 2003 study—“Prescription Drugs: Comparison of Drug Costs and Patterns of Use in Workers Compensation and Group Health Plans”—examined the cost and use of prescription drugs in workers compensation (WC).

Key Findings

  • Payment patterns by accident year show continued growth in WC prescription drugs’ share of total medical costs (estimated ultimate share rising from 10.1% in 1997 to 12.1% in 2002)
  • Drug price increases had a slightly greater impact on WC drug costs than utilization increases for 2002 over 2001
  • Twenty-eight states were identified as having prescription drug fee schedules—all use average wholesale price (AWP) as a mechanism for reimbursement
  • Although creating pharmacy benefit managers (PBMs) initially looks promising as a cost containment strategy, additional factors will need to be assessed and addressed