Tag Archives: FDA

Generic Abilify (Aripiprazole) Approved

Pills and DollarsOn April 28, 2015 the U.S. Food and Drug Administration (FDA) approved the generic formulation (Aripiprazole), of Otsuka America Pharmaceuticals’ brand Abilify®.

Aripiprazole is an atypical antipsychotic indicated for the treatment of bipolar depression and schizophrenia. It is also indicated as adjunct therapy in the treatment of depression when antidepressant monotherapy is inadequate. Non-bipolar depression with or without psychotic symptoms, is a common co-morbid condition in patients with chronic pain due to an industrial injury.   Four manufacturers had their generic formulations approved for release to the market. Alembic Pharmaceuticals, Ltd., Hetero Labs Ltd., Teva Pharmaceuticals and Torrent Pharmaceuticals Ltd. The generics are available in 2, 5, 10, 15, 20 and 30mg strengths. As of Thursday, April 30th, the AWP (Average Wholesale Price) for the generic formulation ranges from $32.07 to $45.41 per tablet depending on the strength and manufacturer in comparison to $35.67 to $50.45 for brand Abilify®.

The HELIOS 2015 Workers’ Compensation Drug Trends Report identified Abilify® as number 19 of the top 25 medications ranked by total spend. It also noted that the therapeutic class, antipsychotics, accounted for 2.3% of total drug spend in 2014, but only 0.7% of the total transactions. This disparity was attributed to the high cost of these medications which was heavily influenced by Abilify®. The report went on to say Abilify® accounted for 50% of total spend in this therapeutic class at an average cost of $1,017 per prescription. The availability of the new generic formulations will definitely impact prescription costs within the workers’ compensation industry as well as the Medicare Set Aside Allocations (MSA).

As prescription drug costs continue to rise dramatically, impacting the workers’ compensation industry, it is increasingly important for claim professionals to evaluate this exposure and mitigate costs when possible. HELIOS Settlement Solutions realizes the importance of keeping you up to date on new generic formulations as part of an overall approach to reduce overall claim costs and ultimately the prescription drug portion of the MSA.

DEA Classification Change for Hydrocodone Combination Products (HCPs)

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.

Zohydro™ ER Launch Date Approaches as the Public Petitions the FDA to Retract Approval

Following its approval by the Food and Drug Administration (FDA) on October 25, 2013, Zohydro™ ER became the first extended-release hydrocodone only pain reliever available in the United States. Previously in the United States hydrocodone was only available in combination products with non-opioid constituents (such as acetaminophen and ibuprofen).

Although the FDA appeared to be on a path of requiring all new opioid products to have abuse-resistant or deterrent features, Zohydro ER does not possess any abuse deterrent properties. This notwithstanding, the FDA does indicate that post-marketing surveillance studies regarding the medication’s susceptibility to abuse, addiction, and misuse will be required and a Risk Evaluation and Mitigation Strategy (REMS) will be required in accordance with their 2012 mandate. Zogenix, the manufacturer of Zohydro ER, also indicates that an External Safe-Use Board consisting of pain specialists and addictionologists has been developed to aid in this task and to ensure that all safety data are considered and presented to the manufacturer’s board of directors. The manufacturer further indicates that an abuse-deterrent formulation is currently being developed and will likely become available within the next three years pending FDA approval.

With release imminent, various consumer advocacy organizations, including Public Citizen’s Health Research Group, are urging the FDA to revoke the October 2013 approval citing concerns over public safety and potential misuse and abuse. We share the expressed concerns and have completed a comprehensive review of the medication relative to others currently available for the treatment of chronic pain (Zohydro ER is indicated for the treatment of pain severe enough to require around-the-clock analgesic coverage and for which alternative treatment options have not been adequate). Our position is that the risks associated with this new medication likely outweigh the benefit and we are strongly recommending that our customers either exclude this medication from their customized Medication Plans/Formularies or at a minimum require Prior Authorization, as is consistent with our standard approach.

As we start to see this medication prescribed in our population, rest assured we have a comprehensive suite of clinical tools equipped to proactively and effectively manage utilization and cost from first fill through settlement; including but not limited to formulary management, clinical alerts, urinary drug testing, and a comprehensive review of the medical and pharmacy records by clinical pharmacists trained in pain management and workers’ compensation.  In addition, we continue to watch this medication closely and will keep you informed of developments as appropriate. Should you have any questions please do not hesitate to reach out to our Clinical Services team or your Account Manager.

To learn more about PMSI’s proven solutions for cost containment, visit our website at PMSIonline.com. You can also access extensive industry information and thought leadership through our Knowledge Center, which includes other recent industry updates and more.

For further information, please contact your PMSI Sales Representative directly, or
call 877.ASK.PMSI.

Physician Dispensing and Workers’ Compensation

Physician dispensing of repackaged drugs continues to be a major contributor to the growing cost of prescription drug treatment within the workers’ compensation industry. In the 2012 Survey of Prescription Drug Management released by CompPharma and authored by Joseph Paduda in January of 2013, it was noted that physician dispensed medications were second only to the use of opioids as the largest driver of workers’ compensation prescription drug costs.

Physician dispensing is not a new practice among physicians. It became popular in the late 19th and early 20th centuries and was first seen in workers’ compensation in California in the middle of the last decade. At that time, physicians began to partner with companies who marketed repackaged drugs for resale as an opportunity for offsetting practice revenue losses due to reimbursement cuts made by government, commercial and workers’ compensation payers.

Repackaged drugs are usually purchased in large quantities from the original manufacturer by companies who then repackage them into smaller quantities for resale. The repackaged drugs are usually sold at a profit by physicians who dispense them to the patient at time of treatment. The FDA requires the company that is repackaging and relabeling the drugs to assign a new NDC number (different from the original manufacturer’s NDC) and at that time it is common for the company to set a new AWP (average wholesale price) that is generally higher than the original. This new AWP is also typically higher than the AWP utilized by retail and mail order pharmacies and is often not controlled by state fee schedules.

From a workers’ compensation payer’s perspective, arguably there are numerous “Pros” and “Cons” concerning physician dispensing.


*Allows the physician the opportunity to ensure the patient has the medication to begin treatment immediately as it is dispensed at the time of service. Additionally, physician dispensing makes it more convenient for those patients who may have difficulty finding transportation to a retail pharmacy. Those patients that may not otherwise have reliable transportation may postpone filling the medication or never obtain the medication for treatment at all.

* Beneficial for specific medications that require physician monitoring such as those dispensed within a drug rehabilitation program.


*Patient Safety:  Since the medication is being dispensed by the physician without the oversight of the pharmacy benefit manager or pharmacist, an important safety check is bypassed.  Since the physician must depend on the injured worker to provide the medication history in order to perform drug utilization review, drug therapy problems may go undetected.  This leads to possible missed drug interactions, duplicate or excessive drug therapy, as well as other high risk medication concerns.

* Inflated costs:  The majority of medications dispensed by physicians are associated with an increased cost per unit because of the creation of a new NDC and AWP.  In many cases this AWP is much higher (in some cases as much as 400% higher) than the same drug dispensed through the retail or mail order pharmacy setting.

*Administrative inefficiency:  It is difficult for bill review systems to identify physician dispensed drugs as they are often simply included in the physician’s treatment bill and the reviewer is unable to separate the cost of treatment from that for drugs.  As these transactions are often billed on paper, this drives additional cost for payers compared to PBM-billed transactions that tend to be billed electronically.  This also makes it very difficult for the payer to build a complete data picture of the magnitude and amount of physician dispensed drugs.

As the practice of physician dispensing continues to gain in popularity, it will remain a concern for payers of worker’s compensation claims.  Due to the financial benefits as well as aggressive marketing by the repackaging companies, it is estimated that the percentage of physicians dispensing drugs is growing well over 10% per year.  In response to this, many, but not all of the states, have begun to  change regulations monitoring physician dispensing in an attempt to help control the inflated cost due to this type of dispensing.

In order to control rising costs, it is important that the workers’ compensation industry work with state legislators to provide insight into this issue. It is equally important for the industry to remain informed on how physician dispensing is being handled by each individual state.  Payers should also discuss with their PBMs their approach to controlling physician dispensing and to ensure sure that it is being actively managed and monitored.