When the Controlled Substances Act was passed in 1970, pure hydrocodone was classified as Schedule II, while its combination products, HCPs, (those containing hydrocodone as well as specific amounts of other medications such as acetaminophen or ibuprofen) were classified as Schedule III. On Friday, August 22, 2014, the DEA published a final rule in the Federal Register moving hydrocodone combination products (HCPs) from Schedule III classification to the more restrictive Schedule II.
Controlled Substances are classified into “schedules,” Schedule I drugs are considered highly addictive with no medical purpose; Schedule II are those substances noted to have a medical purpose that have a greater potential for abuse and harm. This final rule imposes all regulatory sanctions and controls regarding a Schedule II medication on all those who handle (manufacture, distribute, dispense, prescribe, etc) HCPs and will go into effect October 6th, 2014.
How will this rescheduling of HCPs affect the worker’s compensation industry and ultimately Medicare Set Asides?
HCPs are among the top prescribed drugs within the workers’ compensation industry. The combination of the additional analgesic, such as acetaminophen, with the hydrocodone has been found to give additive analgesia as compared to the same doses of either agent alone; therefore, making the HCPs more popular for utilization for the treatment of moderate to moderately-severe pain. Some of the most common brand names for these combination medications are Norco, Vicodin and Lortab(Hydrocodone/Acetaminophen) along with Vicoprofen (Hydrocodone/Ibuprofen).
This reclassification will place more stringent requirements on the handling of HCPs. For the manufacturers as well as pharmacies this means changes must be implemented in the areas of distribution, dispensing, record keeping and storage. These changes will lead to increased costs for those handling the HCPs which will more than likely lead to an increase in AWP (average wholesale price) as well as the price at time of dispensing. We may also see a trend away from utilization of the HCPs which are relatively inexpensive to more costly brand name and generic medications in a less restrictive scheduled classification or even to a more expensive long acting hydrocodone such as the newly released Zohydro ER. This would lead to higher prescription costs within the workers’ compensation claim and ultimately the prescription allocation within MSAs.
The new requirements for HCPs as Schedule II medications will also set limitations on prescribing. Schedule II medications must be hand written and may not be faxed (the exception being for Hospice) or called into pharmacies thus making it more difficult for a claimant to obtain their medication. Many states will allow only a one month prescription to be written per visit while a few will allow up to a 90 day supply. Previously when under the schedule III classification, the prescriptions for HCPs were valid for up to 6 months. This will increase the number of office visits required, along with the expense of transportation if provided for claimant, as well as utilization of an interpreter when necessary, all of which will increase the medical cost incurred for the claimant to obtain the prescription for his or her HCP. This in turn will also increase the cost within the claim and ultimately the medical allocation within MSAs.
It remains to be seen how much the reclassification of HCPs to a schedule II will impact the treatment of pain management within the workers’ compensation industry. However, it just as important to see whether it will indeed reduce the abuse, diversion and addiction issues that prompted the DEA to adjust its classification in the first place.
Helios Settlement Solutions will continue to keep you informed concerning the HCPs and any other changes that will affect prescription drug costs within the claims and ultimately MSAs.