Overall, generic drugs still offer the best cost savings for payers while ensuring injured workers get the medications they need. Surprisingly, not everyone is as focused on generic fills as you might think.
For reference, the average generic fill rate among Express Scripts’ workers’ comp payers in 2016 was 84.4 percent. But that average is not necessarily true for all payers. Brand name drugs are commonly prescribed for many reasons including habit, lack of awareness of available alternatives, or patient request.
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Clearly there are instances when a brand-name drug is more appropriate for a particular injured worker. But by and large generics offer the same outcomes and at lower costs.
“From the base price of $100.00 set in January 2008, in December 2016, prices for the most commonly used generic medications decreased to $26.27 (74% decrease),” the Index explained, “and prices for the most commonly used brand medications increased to $307.86 (208% increase).”
The news begs the question, are you doing all you can to ramp up your generic fill rate? If not, it may be time to turn to your pharmacy benefit manager for help.
PBM Advantage
A good PBM has an inherent advantage over individual payers in getting the best quality for the lowest costs. They typically have large client bases, giving them better leverage to negotiate for reduced generic prescription drug prices. That creates competition and pressure among manufacturers of generic drugs to provider better pricing.
Work with your PBM to get a higher generic fill rate with the following:
- Educate providers. Prescribers may choose a brand name over the generic drug out of habit. Or they may be unaware of an available generic. You need to inform providers about the generics that are available, especially for the most commonly used medications.
- Inform employees. Injured workers may believe they need a brand-name drug — even if they have never tried the generic version. Employees need to understand more about the workers’ compensation process than they typically do. They should understand, for example, how unnecessary costs impact the entire organization, including for pay raises and/or additional help. Informed employees who become injured are more engaged in their own recoveries if they have a good understanding of the system.
- Praise & reward. Generic medications have the same clinical outcomes as their more expense brand name counterparts. Providers that turn first to generics over brand-name drugs should be praised and rewarded.
- Create programs. Work with your PBM to develop strategies that will improve the generic fill rate, while still ensuring injured workers get the most appropriate medications and treatments.
Conclusion
If your medical spend seems higher than it should, it’s time to find out why and what you can do about it. Pharmaceuticals are among the biggest cost drivers in the workers’ compensation system. By working with a PBM, you can cut wasteful spending while still ensuring your injured workers get the very best medical care.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center.
Contact: [email protected].
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