Pharmacy Paper

.compInsights

Published by CorVel Corporation Winter 2012

Pharmacy Management Report

Pharmacy costs continue to drive a larger percentage of workers’ compensation costs. Pharmaceutical price increases, increase in narcotics, prescribing patterns, and an increase in physician dispensing are all contributors. A recent NCCI study reported that 19% of total workers’ compensation claims costs are for pharmacy claims. As part of an ongoing effort to understand the issues affecting pharmacy programs, CorVel surveyed claims professionals about their pharmacy management programs and the following is a summary of the findings. This report also contains comparisons from a compInsights report published in November 2009.

As noted above, NCCI reported that pharmacy accounts for 19% of total workers’ compensation claims costs. They measure pharmacy spend over the life of claim, therefore annual costs will be actually lower with an average of 8-12% of total medical spend. This survey began by asking the respondents for the estimated transactional percentage of pharmacy costs as compared to the total workers’ compensation medical spend.

Pharmacy Costs

The next question asked if overall pharmacy costs were expected to change in 2012. Of the respondents, 36% said they expect an increase and only 6% indicated they expected a decrease. Written comments about cost contributors included: “Continued increase in narcotics.” and “Failure of state legislation to manage pharmacy.” The following chart is a 2009 to 2011 comparison.

Pharmacy Program Cost Changes

2011 Pharmacy Costs as a Percentage of Total Medical

Pharmacy Cost Changes

2009 2011

60%

Less than 4% 4%-8% 9%-11% 11%-15% More than 15% Unknown

58%

9% 20% 22% 20% 22% 7%

10% 6%

Increase About the Same Decrease

36% 30%

© 2012 CorVel Corporation. All rights reserved.

Annual Pharmacy Costs

To gain insight into the causes of high pharmacy costs, the respondents were asked to select from a...