Brand medication increases and generics for release in 2019

As an established Medicare Secondary Payer (MSP) compliance services provider, one of our goals is to keep clients, and the property and casualty insurance industry, informed of changes affecting MSP compliance and Workers’ Compensation Medicare Set Asides (WCMSAs).

As part of our best business practices, we continually monitor the RED BOOK® Average Wholesale Price (AWP) changes of the most common medications in WCMSAs as well as generic medications that come to market. This practice assists in identifying price changes that affect WCMSAs.

Brand name drug manufacturers increase prices regularly at the beginning of the year and in July. In January a number of price increases of brand medications occurred affecting workers compensation claims. The price increases for the most common medications used in workers’ compensation claims average seven percent (confirmed through the February update of pricing on the WCMSA portal). Lyrica® (an anti-epileptic drug used for neuropathic pain) is the most common brand name drug seen in WCMSAs and increased from $8.91/capsule to $9.36/capsule (approximate five percent increase). Fortunately, several commonly prescribed brand name medications are expected to have generic equivalents available in the market. These new generics approved by the Food and Drug Administration may provide an approximate 20 percent decrease once they arrive to market. And, as competition impacts market forces, there will be even greater decreases over time.

Generic equivalents can provide significant savings

We have already seen several generic equivalents come to market which help reduce workers’ compensation costs/settlements. The following chart lists commonly prescribed brand name medications with generics released in late 2018 and early 2019.

Brand (Manufacturer) Generic name Drug usage Generic AWP price per unit Brand AWP
price per unit
Percent decrease
Androgel 1.62% Testosterone Anabolic steroid $8.93 $9.93 11%
Butrans (Purdue) Buprenorphine TD patch Opioid analgesic LA $64.42-$171.09 $88.81-$234.18 37%
Cialis (Eli Lilly) Tadalafil Erectile dysfunction $9.84-$72.06 $13.68-$80.16 39%
Viagra (Pfizer) Sildenafil Erectile dysfunction $13.29 $84.85 538%
Suboxone (Indivior) Buprenorphine/NaloxoneSL film Opioid analgesic $4.96-$17.58 $5.73-$20.53 16%

Generic equivalents can reduce medication costs significantly.

It is our recommendation that carriers, TPAs and claim handlers review cases where the medications listed above are utilized to determine if the generic version is being used. If the prescriber has not yet tried the generic formulation of the above noted medications, it is recommended that proactive outreach be conducted to request consideration of the use of the generic.

Looking forward in 2019

We expect to see significant savings as these brand name medication patents expire and generics come to market:

Brand (Manufacturer) Generic name Drug usage Brand AWP
price per unit
Expected availability
Advair Disks (GlaxoSmithKline) Fluticasone/salmeterol Inhaler for Asthma and COPD $380.46-$621.72 Late February 2019
Staxyn (Bayer) Vardenafil (oral disintegrating tab) Erectile dysfunction $38.59 March 2019
Restasis (Allergan) Cyclosporine (opth emulsion) Dry eyes $11.15 March 2019
Latuda (Sunovion) Lurasidone Depression/schizophrenia $48.93-73.05 Generic approved unclear release date
Vesicare Solifenicin succinate Urinary incontinence $15.42 May 2019
Lyrica (Pfizer) Pregabalin AED for Neuropathic pain 9.36 July 2019

Optum will continue to monitor future medication pricing changes and generic equivalents introduced to the market affecting workers’ compensation claims and will keep the industry informed.