Tag Archives: Prescription Drugs

Drug Update: Generic Nexium, Esomeprazole Released

WhittemoreKayAnother highly utilized medication within the workers’ compensation industry has had its patent expire and the generic equivalent approved for release onto the market. On January 26, 2015, the U.S. Food and Drug Administration (FDA) approved the generic version of brand Nexium, Esomeprazole. Nexium (Esomeprazole) is a proton pump inhibitor most often utilized in the workers’ compensation industry to reduce stomach acid in the treatment of gastroesophageal reflux disease or GERD. It will be available in both the 20mg and 40mg strengths.

Over 2013 and 2014 the Average Wholesale Price (AWP) of brand Nexium increased more than 11%; presumably because of the expiration of its patent as well as the release of the OTC formulation. Availability of the generic has the potential to lower the Part D aspect of your Medicare Set-Aside allocation if the generic is utilized.

Per HELIOS 2014 Workers’ Compensation Drug Trend Report, gastrointestinal medications, such as Nexium, were noted to be in the top ten categories of specialty drugs prescribed within the workers’ compensation claim. It is often added to a claimant’s drug regimen when they are on other medications such as non streroidal anti-inflammatory drugs (NSAIDS) which can cause stomach irritation and upset. The report also ranked brand Nexium #10 out of the top 25 Brand medications in percentage of total spend.

A launch date for the generic formulation has not been set as of today, therefore there is no price available at this time. However, clinical analysis has shown that on average the generic formulation has a 10% lower price when launched over its brand counterpart and over time can create savings. The FDA recently revoked a tentative approval for Ranbaxy Laboratories’ six-month exclusivity for their generic which will now allow other manufacturers to launch their products resulting in a more competitive price at the time they are released.

HELIOS Settlement Solutions hopes that you will find this information beneficial in helping to control costs both within the worker’s compensation claim and the MSA. As 2015 progresses, HELIOS will continue to keep the industry informed of prescription updates and changes.

CMS Comments on Hydrocodone Combination Product Coverage Changes in Relation to WCMSAs

Brenda SmithAs of October 6th, 2014, the rescheduling of all hydrocodone combination products to the Schedule II classification went into effect. As previously discussed in our September 15, 2014, “DEA Classification Change for Hydrocodone Combination Products (HCPs)” blog, there were restrictions and changes related to the reclassification that could possibly lead to increase costs and ultimately have an impact on both the medical and the prescription allocations within the MSA.

It was noted that due to more stringent requirements in the areas of distribution, dispensing, record keeping and storage and the changes needed to meet these requirements that there would more than likely be an increase in the costs of the HCPs. We have already seen a rise in costs according to Redbook pricing noted via the CMS portal. For example, in August 2014 when the DEA ruled on the reclassification of the HCPs, generic Norco (Hydrocodone/Acetaminophen 5/325), was $0.342 per tablet. As of October it is now $0.459 per tablet. This is an increase of almost .12 per tablet in 2 months and is already leading to higher prescription costs within the workers’ compensation claim and MSA allocations.

It was also noted the new requirements for HCPs as Schedule II medications would 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 others will allow up to a 90 day supply. Previously when under the schedule III classification, the HCPs were valid for up to 6 months. Due to these prescribing limitations it was noted there would be more visits required. As a result, on November 17, 2014, CMS issued a “Notice of Hydrocodone Combination Product coverage changes in Medicare Part D Effective for WCMSA Proposals Submitted on or after January 1, 2015”. It stated that “at a minimum, allocate four healthcare provider visits per year when Schedule II controlled substances (including hydrocodone combination products) are used continuously unless healthcare provider visits are more frequent per medical documentation”. This confirms our previous assumption that there would be an increase in claims costs due to prescribing limitations.

CMS has also indicated that WCMSA cases submitted to CMS before January 1, 2015 that are closed due to missing, incomplete and/or inadequate supporting documentation (or any other reason), and subsequently re-opened after January 1, 2015, will also be subject to a review that includes the C-III controlled substances changes due to rescheduling by the DEA.

CMS methodology continues to highlight that payers that work with Helios Settlement Solutions are well positioned to mitigate pharmacy and their associated costs prior to settlement negotiations and creation of their MSA.

Helios Settlement Solutions will continue to keep you informed of any further changes concerning the HCPs and other medications that will affect drug costs as well as medical costs within the claim and ultimately the allocations within 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.

DEA Classification Change for Tramadol

Tramadol (brand name Ultram) is a centrally-acting “opioid-like” analgesic. It was approved by the FDA in 1995.  Since then, generic, combination, and extended release formulations have also been approved.   Per the PMSI 2013 Annual Drug Trends Report for Workers’ Compensation, tramadol (brand name Ultram and Ultram ER) was ranked number 3 under the top 20 medications by total transactions and number 12  under the top 20 medications by total spend. When it was initially approved by the FDA, it was classified as a non-scheduled medication as it was considered a “safe opioid.”  However, on July 2, 2014, the Drug Enforcement Administration (DEA) published its Final Rule in the Federal Register which reclassified all medications containing Tramadol as a Schedule IV controlled substance due to evidence presented of possible abuse, dependence and diversion.  The Final Rule can be found here.

What are Controlled Substances and How are They Classified?

Controlled Substances are categorized into “schedules.” Schedule I drugs are considered highly addictive with no medicinal purpose, whereas a schedule IV drug has a relatively low potential for abuse, as well as dependence and is recognized for its accepted medicinal use. Prior to the DEA ruling, several states had already taken the initiative to classify tramadol as a schedule IV controlled substance at the state level due to its potential for abuse and addictive properties.  Consequently, the reclassification of this drug to a controlled substance on the federal level is not surprising.

How Will the Reclassification of Tramadol Impact Medicare Set Asides (MSAs)? 

As a controlled substance, prescriptions for tramadol will now have restrictions on the length of time the prescription remains valid and on the number of refills allowed during this time frame.  Previously, a prescription for tramadol was valid for one year from the date it was written with no limitation on the number of refills.  As a controlled substance, prescriptions will be valid for only 6 months from the date they are written with 6 total fills allowed (original & 5 refills).  If only 4 fills are used in 6 months, the prescription is no longer valid and the patient would not be allowed to obtain the remaining two refills.

Due to this change, claimants may need to increase office visits to maintain use of this medication. Urine toxicology screens may also be required to monitor for compliance, abuse, and possible diversion of tramadol. Both will ultimately result in increased costs to insurance carriers as well as the medical portion of MSAs.

The industry may also see a decrease in the number of prescriptions written for tramadol (ex.,tramadol 50mg, $0.08/tab) as it was most often utilized when a physician wished to avoid the prescribing of a scheduled, controlled substance or narcotic medication.  This may lead to the prescribing of alternative medications, which had previously been avoided, to increase.  This could include the different hydrocodone/APAP formulations (ex.,generic Norco 5/325 $0.19/tab or Vicodin 5/300 $1.97/tab, etc) as well as the  buprenorphine tab (ex., 2mg, $4.14/tab) and buprenorphine/naloxone (8mg-2mg, $10.01/tab) products  which are often utilized off-label for pain due to less potential for abuse. There may also be increased utilization of NSAIDs (non-steroidal anti-inflammatory drugs such as Celebrex 200mg, $8.42/cap) to continue to avoid the use of narcotic medications for treatment of pain and whose long-term use could lead to other health issues such as GERD. If this occurs, insurance carriers could see an increase in prescription as well as medical costs depending on which alternative medication is prescribed, which again would lead to an increase in the medical portion as well as the prescription allocation within the MSA.

Due to tramadol’s change in status to a scheduled IV controlled substance, the manufacturers of all products containing tramadol will have to implement changes required for the proper labeling, handling, and storage of tramadol. The DEA has acknowledged they are aware these changes will take time to implement and have given the manufacturers until August 18, 2014 to comply.

PMSI and Progressive Medical will continue to follow any further changes to tramadol’s use and classifications as well as other common drugs in workers’ compensation claims.  As a leader in providing solutions for cost containment, we understand that these changes could greatly impact prescription drug costs in claims.