WCRI Releases 24-State Reference Book about the Prevalence and Costs of Physician-Dispensed Drugs

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In many states across the country, policymakers are debating whether doctors should be paid significantly more than pharmacies for dispensing the same drug. This 24-state reference book will allow policymakers to see how their state compares with other states as well as what actions other states have taken with regard to this issue.

Doctor writing a prescription.

Doctor writing a prescription.

This reference book will allow policymakers to see how their state compares to other states as well as what actions other states have taken with regard to this issue.

The Workers Compensation Research Institute (WCRI) released a reference book today that describes the prevalence, prices, and costs of physician-dispensed drugs in 24 study states, which represent 70 percent of the total workers’ compensation benefits paid in the United States. It also compares prices paid for physician- and pharmacy-dispensed prescriptions for the same drugs and tracks changes in prices, for drugs commonly dispensed by physicians to injured workers.

“In many states across the country, policymakers are debating whether doctors should be paid significantly more than pharmacies for dispensing the same drug,” said Dr. Richard Victor, WCRI’s executive director. “This reference book will allow policymakers to see how their state compares to other states as well as what actions other states have taken with regard to this issue.”

According to the WCRI study, The Prevalence and Costs of Physician-Dispensed Drugs, most states allow physicians to dispense prescription drugs at their offices directly to the patient. Previous WCRI studies reported considerably higher prices paid for physician-dispensed prescriptions when compared with prices paid to pharmacies for the same drug. These studies also reported rapid growth of physician dispensing in several study states.

In 2007, California became the first state to change reimbursement rules with the intention of equalizing the prices paid for physician- and pharmacy-dispensed prescriptions. A 2012 WCRI study found that the 2007 change in California reduced the average prices paid for physician-dispensed prescriptions to close to the prices paid to pharmacies for the same drug. After the reform, many physicians continued to dispense in California—nearly half of all prescriptions were dispensed at doctors’ offices in post-reform California.

Since then, a number of states have adopted reforms similar to those in California. As of July 2013, at least 13 other states have made law or rule changes with the intention of reducing the prices paid for physician-dispensed drugs while continuing to allow physicians to dispense drugs directly to their patients. These states include Alabama, Arizona, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Michigan, Mississippi, Oklahoma, South Carolina, and Tennessee. Florida also made law changes, effective July 2011, that were aimed at eliminating so-called pill mills by prohibiting all Florida physicians from dispensing Schedules II and III narcotics.

Few states have sought to prohibit or severely limit physicians from dispensing prescription drugs directly to their patients. In the United States, six states prohibit physician dispensing in general; three of them are included in this study (Massachusetts, New York, and Texas). The other states that prohibit physician dispensing are Montana, Utah, and Wyoming. Louisiana limits physician dispensing of narcotics to a 48-hour supply.

The data used for this reference book came from 24 states with more than 600,000 claims and 4.8 million prescriptions, focusing on claims with more than seven days of lost time with prescriptions filled and paid for by a workers’ compensation payor. The data collected from the payors represented 26–58 percent of the claims in each state. The study covers claims with injuries arising from October 1, 2007, to September 30, 2011, with prescriptions filled through March 31, 2012.

The following states are included in this study: Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

Click on the following link to purchase this reference book:
http://www.wcrinet.org/result/phys_disp_multistate_result.html.

The Cambridge-based WCRI is recognized as a leader in providing objective, credible, and high-quality information about public policy issues involving workers’ compensation systems.

ABOUT WCRI

WCRI is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, WCRI does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI’s diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand. For more information, visit: http://www.wcrinet.org.

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