Drug Costs Send Workers' Comp Bills Soaring

Increased use of costly prescription pharmaceuticals has been having a greater financial impact on the workers' compensation system than rising drug prices, but that trend could be ending, a leading data group reports.

The research by the Boca Raton-based National Council on Compensation Insurance also revealed that the recently recalled anti-inflammatory drug Vioxx was third among the top-10 most costly prescribed drugs paid for by workers' comp insurers from 1997 to 2002.

Among different varieties of drugs, the workers' comp system spent more on painkillers-54 percent- than any other type, the study found. Muscle relaxants accounted for 18 percent of payments for prescriptions, and antidepressants another 15 percent.

NCCI said that prescription drugs' share of workers' comp medical costs rose from 10.1 percent in 1997 to 12.1 percent in 2002, but that between 1997 and 2001, "utilization had a greater impact on WC drug costs than price."

Although from 2001 to 2002 drug price hikes slightly outpaced the impact of utilization on overall drug cost, "most knowledgeable observers agree that utilization is the more important driver of medical costs." the study's authors wrote.

According to NCCI, the workers' comp system is already prescribing generic drugs when available, so there is little opportunity for savings by increasing their usage. Generic drugs as prescriptions, when they are available as a non-brand alternative, rose from 79 percent in 2001 to 86 percent in 2002, the survey found.

Source: NU, October 11, 2004