Pharma Update: Opioid Use on the Decline, While Physician Dispensing Is Back with a Vengeance

CompPharma looked at current trends within the workers’ compensation pharmacy landscape and found payers are looking for more actionable data from their PBMs.
By: | May 11, 2023

CompPharma released the results of its 18th annual Survey of Prescription Drug Management in Workers’ Compensation, which probes payers’ concerns about pharmacy management.

Joe Paduda, president of CompPharma, noted that this year’s survey data revealed much lower concerns about the impact prescription drugs are having on overall medical spending.

CompPharma reports that respondents rated drug concerns at a 3.2 versus other medical concerns, the lowest score since 2009, but pharmacy spend is ticking up.

“The pharmacy spend issue doesn’t exist in a vacuum. Facility costs in comp are ramping up significantly, especially in states that didn’t expand Medicaid and had either bad or no fee schedules. Florida is a great example,” Paduda explained.

“Pharmacy costs have dropped about two-fifths over the last decade or so, even though they went up just a fraction. Folks understand that it used to be 15% of spend, and now it’s around eight.”

Good News in Opioids

After a seven-year decline, prescription drug costs rose slightly: Nearly one-third of the survey respondents reported an increase in pharmacy spend.

This slight uptick, though, is coupled with a big win for workers’ compensation pharmacy management that was a decade or more in the making — reducing opioid prescriptions.

The amount spent on opioids continued its downward trend with a 12.5% decrease between 2020 and 2021. Between 2019 and 2020, opioid spend went down 14.82%, and there was a huge 29.74% reduction between 2017 and 2018.

Opioids represented 13.4% of respondents’ pharmacy, which is the lowest figure in the history of the survey.

“There’s been a reduction in opioids, all credit to the workers’ comp industry for making that happen, and people are feeling good about that. We’re very good at reducing initial use of opioids, but have less success in reducing legacy claimant use of opioids,” Paduda said.

Findings on Alternative Approaches

In an effort to address the legacy use of opioids, some PBMs and their payer partners are turning to alternatives that are noninvasive and cutting-edge, like virtual reality.

Joe Paduda, president, CompPharma

However, the survey revealed a persistent belief that these solutions are better for a younger demographic, and only early in the claim.

“There is a misperception on the part of respondents that younger claimants are more receptive to these alternative therapies. In my experience, the adherence of older patients is equal to or in some cases better than younger patients,” Paduda said.

“My theory is that these folks reach a point in their life where they can’t go to the grocery store or visit their kids and finally say, ‘Yeah, if I have to put on a virtual reality headset or wear a device, I’m happy to do that.’ ”

However, industry leaders within pharmacy are embracing the benefits alternatives can bring. Nikki Wilson, senior director of clinical pharmacy services at Enlyte, explained that alternative pain management approaches remain a priority within Enlyte’s enterprise-wide opioid strategy.

“We are also exploring development of innovative options for pain management, such as those emerging within the digital therapeutics space via health apps, several of which combine prescription pharmaceutical and behavioral health support to address pain,” she said.

“This is one of these things that is a career-long effort to make a change happen. There’s no silver bullet,” Paduda said.

Back With a Vengeance

Also lacking a silver bullet is the issue of physician dispensing, which Paduda says is “back with a vengeance.”

“There was a real outbreak of physician dispensing 10 or 12 years ago, but companies, payers and states went after it and thought that they controlled it,” he said. “The reality is it just morphed into other ways of profiteering off of employers and taxpayers.”

According to Paduda, there are three primary reasons why physician dispensing is problematic: patient safety, cost and clinical outcomes.

“We have mail-order pharmacies prevalent in some states that are filling prescriptions and providing medications to work comp patients outside of what the payer, case manager and adjuster is doing, so there’s no awareness on the part of the payer or employer regarding what’s being dispensed until long after it’s dispensed,” he said.

“These aren’t being distributed using evidence-based clinical guidelines, and they are exponentially more expensive.”

Jean Tyrrell Feldman, senior director of managed care at Sentry Insurance, concurred.

“Controlling physician dispensed medications and private label topicals is a top priority,” she said. “The best way to combat these increasing costs, which can drive a financial incentive to the provider, is through the state legislature to close the loopholes in states where this is allowed.”

Paduda recently finished an audit of compound costs associated with the government’s workers’ comp program and found that the profit margin was over 95%.

“All of these things are driving up costs and inhibiting patient safety,” he said. “The reason that this is happening is that the industry has gotten complacent and lazy. Like anything else, the physician dispensing industry is focused 24/7 on how to hoover dollars out of employers and taxpayers, and employers and taxpayers aren’t paying attention.”

Ways to Improve

The PBM improvements section of the report, where respondent data regarding their PBM relationships is tabulated, found the typical emphasis on customer service and support, but a new emphasis also emerged: the need for PBMs to provide good actionable data rather than just mounds of numbers that adjusters need to sort.

“You’ll never have enough data,” Paduda said, explaining the respondents’ mood.

“For workers’ compensation people to think that they have enough data when work comp medical spend is three quarters of one percent of the total is laughable. However, you’ve got to work with the data you do have, and nothing is perfect. They should focus on what data they have, ensuring accuracy and consistency in gathering that data, and how it can be transformed into something that is usable.”

Paduda gave the example of a prior authorization for a new prescription unknown to the adjuster who then sends it to their PBM.

“The PBM should respond back and say, ‘Yes, this makes sense for the following reasons.’ And then the adjuster can approve or reject. That’s using the data resources of the PBM and the patient’s diagnosis and other characteristics to arrive at something actionable. Big data is useless; actionable data is what matters.” &

Nina Luckman is a business journalist based in New Orleans, focusing primarily on the workers' compensation industry. Over the last several years, Nina has served as Editor of Louisiana Comp Blog, a news site she started in 2014 under the auspices of a group self-insurance fund. She can be reached at [email protected].

More from Risk & Insurance