NCCI Study Examines Formulary Implementations and Impact on Workers’ Comp

June 17, 2019 by WorkCompWire

Boca Raton, FL – NCCI recently released a new research brief that takes a deeper look at critical factors that are influencing pharmacy experience in workers compensation.

As states grapple with high prescription drug costs and an ongoing opioid crisis, regulation of prescription drug prices and utilization has become a focus of legislative activity in workers compensation.

Closed drug formularies have recently gained increased attention among states as a pharmacy utilization management tool to provide evidence‐based guidance to physicians when prescribing drug treatments for injured workers. One such formulary, which has been implemented in several states is the Official Disability Guidelines Workers’ Compensation Drug Formulary (ODG Formulary).

The new report investigates post‐implementation prescription drug experience in two states which have recently adopted mandatory use of the ODG Formulary: Arizona and Tennessee. Various metrics are used to trace prescription drug utilization and cost trends in each state’s WC system before and after formulary implementation. Utilization trends among certain types of medical procedures, which may complement or substitute for prescription drugs, are also examined.

Key findings included:

  • Prescription drug utilization decreased across all categories of drugs throughout the time period studied, regardless of whether they required prior authorization. Utilization declined in Arizona and Tennessee, and also in states not adopting a closed formulary. N‐drug utilization after adoption of the ODG Formulary decreased at a rate of approximately 7% to 14% beyond the utilization decreases observed in relative benchmarks.
  • Changes in N‐drug utilization were driven by a decrease in the share of active claims receiving at least one N‐drug in Tennessee; whereas Arizona experienced a decrease in N‐drug scripts per claim with an N‐drug.
  • Utilization of topical and compound drugs in Tennessee4 decreased dramatically after formulary implementation.
  • Approximately 80% of opioid scripts prior to formulary implementation already involved Y‐drugs.
  • The ODG Formulary had a limited observed impact on opioid utilization in the early period after implementation.

Read the free brief: NCCI: Formulary Implementations and Initial Impacts onWorkers Compensation (PDF)