Workers’ Comp PBMs Grapple with Physician Dispensing by Lobbying State Regulators, Reports Drug Benefit News

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The latest issue of Drug Benefit News reports on the lobbying efforts PBMs are focusing on state policymakers in an attempt to restrict the practice of physician dispensing of workers’ compensation prescription drugs and to put a cap on reimbursement.

Employers, insurance companies, PBMs and other payers of workers’ compensation prescription drug claims are up in arms about the practice of physician dispensing, through which prescribers dispense these same drugs directly to patients and charge an average wholesale price (AWP) that is in many cases significantly higher than the price paid to a retail pharmacy. The Sept. 16 issue of Atlantic Information Services’s Drug Benefit News reports on the lobbying efforts PBMs are focusing on state policymakers in an attempt to restrict the practice and to put a cap on reimbursement.

According to new research from the Workers Compensation Research Institute (WCRI), Pennsylvania doctors who are directly dispensing medications to injured workers are charging workers’ compensation payers an average of $1.22 per pill for Vicodin (hydrocodone-acetaminophen), more than three times the 37 cents average per-pill reimbursement to retail pharmacies. In Maryland, WCRI found that the average per-pill cost of Percocet (oxycodone/acetaminophen) dispensed by a Maryland physician is $3.29, estimated by the research institute to be nearly five times the typical 67 cents charged by pharmacies. Moreover, physicians in that state charged an average of $5.87 per pill of Prilosec (omeprazole), which was available over-the-counter for 67 cents per pill at Walgreen Co. stores during the study period ending March 31, 2012.

“It’s such a scam, it’s beyond belief,” opines Joseph Paduda, president of CompPharma, LLC, a consortium of workers’ compensation PBMs that recently identified physician-dispensed drugs as the second-largest driver of workers’ compensation prescription drug costs after the use of opioids. But attempts at the state level to resolve this issue through legislation have achieved mixed results. “In Maryland, for example, the physician dispensing community has lobbied very hard, has donated a lot of money to political campaigns and has been able to co-opt the legislative process through applying large sums of money,” Paduda continues. “And that’s because they’re making so much money from physician dispensing; they have a lot of cash to disperse.”

Visit to read the article in its entirety, which also reports on state regulatory efforts, including price control and dispensing time limits.

About Drug Benefit News
Published biweekly, Drug Benefit News delivers timely news, proven cost management strategies and unique data gathered in AIS's own surveys of PBMs and pharmacy benefit vendors. Coverage includes news and strategies related to the use of generics and OTC drugs, formulary decisions, evidence-based medicine, changes in drug pricing, PBM transparency, changes in Part D and other federal initiatives, and much more. Visit for more information.

About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at

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Jill Brown
Atlantic Information Services
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