PMSI recently released its 5th Annual Drug Trends Report, an analysis of 5.1 million retail and mail order transactions which highlights various insightful trends in workers’ compensation. The report focuses on ten notable areas influencing pharmacy spend within PMSI’s customer base and the industry as a whole, such as Average Wholesale Price (AWP), Brand and Generic Mix, Mail Order Utilization, and Narcotics Utilization. These specific issues of pharmacy spend have proven to greatly affect overall claims costs as well as the ability to settle claims.
A few of the issues addressed in this years report include:
- Average spend per injured worker increased only 3.2% in 2011. Of interest is that this rate of increase was far less than the 2011 average AWP increase of 6.3%.
- AWP continued to be a major driver of pharmacy cost increases, with an average brand AWP increase of 3.9% and a generic AWP increase of 8.3%.
- PMSI notes an increase in the overall average duration of injury to 4.9 years.
- PMSI clients saw a slight decrease in the number of prescriptions per injured worker but an increase in the average spend per injured worker.
Typically, as the duration of an injury increases, the average cost and number of prescriptions increase due to higher utilization of brand medications later in the claim. The increase in the duration of injury, coupled with the increase in the average spend per injured worker, impacts the potential for settlement. If settlement is possible, MSA allocations may be much higher than expected, potentially hindering the ability to settle claims at a reasonable amount. Leaving claims open inevitably results in increased administrative costs as claims continue to linger.
Dr. Maria Sciame discusses her findings in this year’s report on PMSI-TV. PMSI is also offering a 2012 Annual Drug Trends Webinar Series where one of the webinar topics will be on Medications and MSAs.