What Physician Dispensing Costs Workers' Comp

Oct 18, 2012
Express Scripts will send injured workers letters informing them of how much money is wasted when their medication is dispensed by a physician.
  • Workers' Compensation Insurance

Rudyard Kipling once said that words are the most powerful drug used by mankind. Along those same lines, Express Scripts is using the power of words to help injured workers make more cost-effective decisions about the medications they take. 

As part of a new workers’ compensation offering that we announced today, Express Scripts will send injured workers letters informing them of how much more their medication costs when dispensed by a physician and how choosing to go to an in-network pharmacy can significantly help cut down on waste.

The Cost of Physician Dispensing

According to the Workers' Compensation Research Institute, when comparing claims from 2007 to 2008 to those from 2010 to 2011:

  • Drugs commonly dispensed by physicians often cost 60% to 300% more than those dispensed at a retail pharmacy.
  • Prices for physician-dispensed medications rose rapidly during that timeframe, while the prices paid to pharmacies for the same drugs changed little or fell.
  • Illinois saw the fastest growth in physician dispensing, which accounted for 22% of workers' compensation pharmacy costs in 2008 and 63% in 2011.
  • In Florida, physician dispensing accounted for 43% of workers’ compensation pharmacy costs in 2008 and 62% in 2011.
  • The average price per pill paid for hydrocodone-acetaminophen — a commonly used narcotic prescribed for pain management — increased 78% in Maryland, 48% in Wisconsin and 23% in Pennsylvania, when the drug was dispensed by a physician. At retail pharmacies, the price for the same drug fell between 2% and 11%.
  • Some physician-dispensers wrote prescriptions for drugs that were available at pharmacies over the counter and were paid five times to 15 times higher prices.

Lack of Visibility Into Drug-Drug Interactions

In addition to the waste resulting from higher prices charged by physician-dispensers, there are safety concerns related to negative drug-drug interactions:

  • The physician may not be aware of the injured worker’s prescription history.
  • Prescriptions obtained through a physician’s office may not get included in the injured worker’s prescription history.

The Express Scripts Solution

The letter that Express Scripts will send injured workers receiving physician-dispensed medication is based on findings from a recent pilot study. The pilot, designed to encourage injured workers to use clinically equivalent generic medications, found that injured workers who were sent a letter containing “social responsibility” messaging were 60% more likely to choose a generic equivalent. The letter explained that, although injured workers do not have to pay out of pocket for their medications, that their decision to use more affordable options could help control the rising cost of healthcare.

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