Over the past several years, prescription drug costs related to workers’ compensation claims have risen dramatically, making it increasingly important for claims professionals to carefully evaluate this exposure and mitigate costs when possible. Optum Settlement Solutions understands that keeping up to date on new generic formulations is part of an overall strategic approach to reduce the cost of claims and ultimately the prescription allocation of a Medicare Set-Aside (MSA).
Every brand medication has a patent life that will ultimately expire. Once the patent expires, generic formulations become available on the market, typically at a lower cost. Although there is no set brand-versus-generic price differential upon generic entry, clinical analysis shows, on average, the generic has a 10% lower price at time of launch over its brand counterpart.
There were several brand name medications during 2016 and already in 2017, commonly prescribed in workers’ compensation claims, whose patents expired with their Food and Drug Administration (FDA) approved generic formulations released to the market.
Generics released in 2016 and first quarter of 2017:
Intermezzo (Zolpidem sublingual tablet): Sedative/hypnotic which is FDA approved for the treatment of insomnia. This is the only indication The Centers for Medicare and Medicaid Services (CMS) currently accepts for inclusion of Intermezzo (Zolpidem) in an MSA. Brand: $13.60/tab* Generic: $10.03/tab* (all strengths)
Frova (Frovatriptan 2.5mg): Central serotonin-receptor 1B and 1D agonist which is FDA approved for the treatment of acute migraine attacks with or without aura. This is the only indication CMS currently accepts for inclusion of Frova (Frovatriptan) in an MSA. Brand: $88.35/tab* Generic: $72.27/tab*
Nasonex (Mometasone Furoate 50mcg/actuation nasal spray): Medium –potency synthetic corticosteroid with anti-inflammatory, antipruritic, and vasoconstrictive properties which is FDA approved for the treatment of allergic rhinitis and allergic rhinitis prophylaxis. These are the only indications CMS currently accepts for inclusion of Nasonex (Mometasone Furoate) in an MSA. Brand: $16.74/gm* Generic: $15.07/gm*
Voltaren Gel 1% (Diclofenac Gel): Topical non-steroidal anti-inflammatory which is FDA approved for the treatment of osteoarthritis of the feet, ankles, knees, wrists, hands, and elbows. It is utilized most often in workers’ compensation claims for the treatment of inflammation and mild to moderate pain. While not FDA approved indications, CMS recognizes these as “medically accepted” indications for use on the body parts listed above and will include Voltaren Gel (Diclofenac Gel) in an MSA. It is considered to be utilized off-label when applied to other body parts such as the neck, shoulder or back and CMS will exclude this medication from the MSA. Brand: $0.49/gm* Generic: $0.54/gm* (Note: currently the generic formulation is more expensive, but as more manufacturers release their generic products the cost should become more competitive and decrease).
Nuvigil (Armodafinil): A psychostimulant which is FDA approved for the treatment of circadian rhythm disruption, narcolepsy, and sleep apnea. It is utilized most often in workers’ compensation claims off-label for daytime somnolence or fatigue due to the utilization of narcotic pain medications which is not recognized by CMS as an accepted indication (FDA or “medically accepted”); therefore, it would be excluded from the MSA for this diagnosis. Brand: 50mg, $8.86/tab, 150,200, & 250mg, $26.60/tab* Generic: 50mg, $7.26/tab, 150,200,250mg $21.86/tab*.
Seroquel XR (Quetiapine Fumarate Extended Release): Atypical antipsychotic which is FDA approved for the treatment of bipolar disorder, schizophrenia, and depression. These are the only indications CMS currently accepts for inclusion of Seroquel XR (Quetiapine Fumarate Extended Release) in an MSA. It is most often utilized in workers’ compensation claims for the treatment of depression. Brand: e.g., 200mg strength, $19.47/tab* Generic: 200mg, $15.52/tab* (Note: All strengths are available in generic formulation).
Pristiq (Desvenlafaxine Succinate): Serotonin-norepinephrine reuptake inhibitor which is FDA approved for the treatment of depression. This is the only indication CMS currently accepts for inclusion of Pristiq (Desvenlafaxine Succinate) in an MSA. Recently released in March 2017, no generic price available for comparison at this time.
*Current pricing based on lowest Redbook AWP
Generics to be released later in 2017:
Relpax (Eletriptan): Serotonin agonist which is FDA approved for the treatment of acute migraine attacks with or without aura. This is the only indication CMS currently accepts for inclusion of Relpax (Eletriptan) in an MSA.
Proair HFA (Albuterol Sulfate inhaler): Moderately selective short-acting beta -2 receptor agonist which is FDA approved for the treatment of acute bronchospasm and exercise-induced bronchospasm prophylaxis. These are the only indications CMS currently accepts for the inclusion of Proair HFA (Albuterol Sulfate) in an MSA.
Viagra (Sildenafil): Phosphodiesterase type 5 inhibitor which is FDA approved for the treatment of erectile dysfunction (ED) and pulmonary hypertension. CMS accepts the indication of pulmonary hypertension for inclusion of Viagra (Sildenafil) in an MSA; however, Viagra (Sildenafil) is Part D excluded for treatment of erectile dysfunction and would not be included by CMS in the MSA for this diagnosis.
Generics can help to lower the cost of the claim:
As healthcare expenditures continue to climb, the effect has been felt in the workers’ compensation industry. Generic medications play a key role in helping to lower costs. It is important, as an industry, we keep up to date on generic availability and intercede when necessary if generics are not being utilized by the treating physician. Optum, being a leader in the industry, has products and programs which can assist clients with managing and mitigating prescription drug costs. These include identification of claims where generic options are available (based on availability of data) and, when applicable, reaching out to the treating physician to discuss conversion to lower cost prescription drug alternatives.
For questions, please contact our Settlement Solutions Division at 888-672-7674 or firstname.lastname@example.org