Texas Workers' Compensation Drug Costs 44% Higher Than Typical State

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New state program targets high utilization of prescription drugs in Texas's workers' compensation system, says new WCRI study.

Percentage of Rx for Brand Names  with Generic Alternatives Available

Percentage of Rx for Brand Names with Generic Alternatives Available

Utilization and use of brand name drugs are driving workers’ compensation prescription costs higher in Texas. However, the implementation of a new closed formulary may help address these two issues.

A recent study by the Workers Compensation Research Institute (WCRI) says that the cost of prescription drugs per workers’ compensation claim in Texas was among the highest of 17 states.

The study, Prescription Benchmarks, 2nd Edition: Trends and Interstate Comparisons, found that the prescription cost per claim with prescriptions in the Texas workers’ compensation system was $736, which was 44 percent higher than the 17-state median of $512.

The two key drivers for the higher prescription costs per workers’ compensation claim in Texas were (1) injured workers in Texas received 30 percent more pills per claim compared to the median state in the study, and (2) more brand names were dispensed when generic alternatives were available – 20 percent in Texas versus 14 percent in the 17-state median.

The report summarizes state policies used in some states to help lower workers’ compensation drug costs, including a closed formulary in Texas slated to take effect on September 1, 2011. The formulary will encourage use of generic drugs and help eliminate certain medications considered ineffective, such as a muscle relaxant named Carisoprodol.

“Utilization and use of brand name drugs are driving workers’ compensation prescription costs higher in Texas,” said Dr. Richard Victor, WCRI’s Executive Director. “However, the implementation of a new closed formulary may help address these two issues.”

WCRI is based in Cambridge, MA and is a nonpartisan, not-for-profit public policy research organization supported by employers, insurers, insurance regulators, state regulatory agencies, managed care companies, and health care providers, as well as several state labor organizations. For more information, visit: http://www.wcrinet.org.

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Andrew Kenneally
Workers Compensation Research Institute
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