Prescription Drugs & Your Workers’ Compensation Claim

Prescription Drugs and Your Workers’ Compensation Claim

Workers’ Compensation cost containment reforms that were implemented in California in 2004 and 2007 helped positively impact Pharmacy related costs by closing the loop on repackaged medications. However, Pharmacy costs have continued to run away largely due to increased utilization. The average number of prescriptions per claim has increased by almost 52% since 2002 (as reported by CWCI). Secondly, the average amount paid per prescription on a workers’ compensation claim increased by almost 72% during the same time period.
Below is a “Top Ten” list of the most prescribed drugs based on total dollars paid in the workers’ compensation system:*

Two Immediate Pain Relievers for Prescription Costs

Historically, Pharmaceutical companies have enjoyed one of the highest profit margins on their products versus all other industry segments. Often one industries gain can lead to a pain for another industry. In this instance Pharmaceutical gains have resulted in increasing cost pains for the workers’ compensation industry.

What can be done do to minimize exposure to increasing utilization and inflated drug costs?

One basic way to control and mitigate prescription costs is to mandate the utilization of generic drugs whenever possible. While the use of generic drugs may not be possible in 100% of the workers’ compensation cases, the market share and approval for generic drugs by the FDA is increasing as noted in the chart below:**

Another effective way to control your prescription costs is to implement a Pharmacy Benefit Management (PBM) program. PBM’s help to reduce Pharmacy costs in the following ways:

  • Generic Substitutions: Employer’s can experience savings of 20% to 30% simply by substituting generic drugs for name brands through your PBM.
  • Claimant Drug Utilization Patterns: Monitoring drug utilization patterns helps employers to efficiently identify individuals that may be inappropriately (over or under) utilizing drugs. Once these individuals are identified alternative expense impacting approaches can be taken to manage these claims.
  • Physician Utilization Management: PBM’s also monitor individual Physician’s prescription utilization tendencies. Armed with this information an employer can begin to direct Employees to Physician’s that treat more in accordance with your Companies philosophy. This move can have a major impact on the total dollars spent on drug costs for a workers’ compensation program.

How Athens Administrators Can Help

In these tough economic times, employers have had to stretch resources to unprecedented levels in order to save money. To help our clients run as cost efficient workers’ compensation program as possible, Athens Administrators has developed a PBM in partnership with ScripNet, a national workers’ compensation pharmacy benefit management company whose sole purpose is to reduce costs and to improve pharmacy related claim outcomes. The Athens PBM offers:

  • A 24/7 Help Desk to assist employers and their injured workers
  • Complete prospective, concurrent and retrospective utilization reviews of prescription usage
  • Drug Utilization Review (DUR) which assists in decreasing prescriptions that may be unnecessary or inappropriate
  • Athens PBM pharmacy cards issued to each injured employee within 24 hours of a reported injury
  • Online, flexible and detailed reporting
  • Direct contracts with pharmacies in all 50 states


* Based on NCCI Research 2010 – Annual Issues Symposium Presentation
** NCCI Research Brief – Fall 2008

Related Links

NCCI Holdings, Inc.:
California Workers’ Compensation Institute:
Athens Administrators: